This excerpt taken from the PLCC 8-K filed Nov 23, 2005.
Item 4.01 Changes in Registrants Certifying Accountant.
Effective November 17, 2005, the Audit Committee of the Board of Directors of Paulson Capital Corp. (the Company) approved the engagement of McGladrey & Pullen, LLP (McGladrey & Pullen) as the Companys independent auditors for the fiscal year ending December 31, 2005, to replace Grant Thornton LLP (Grant Thornton), who were dismissed as the Companys auditors as of the same date. This action followed the Audit Committees determination that the Companys audit and tax services should be separated. The Company intends to continue its relationship with Grant Thornton for tax services.
Grant Thorntons audit reports on the Companys financial statements as of and for the two most recent fiscal years, which ended December 31, 2003 and 2004, did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.
During the Companys two most recent fiscal years and the subsequent interim periods through September 30, 2005:
(i) there was no disagreement between the Company and Grant Thornton on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreement, if not resolved to Grant Thorntons satisfaction, would have caused Grant Thornton to make reference thereto in their report on the financial statements;
(ii) none of the reportable events described under Item 304(a)(1)(v) of Regulation S-K occurred; and
(iii) the Company did not consult with McGladrey & Pullen regarding any of the matters or events described in Item 304(a)(2)(i) and (ii) of Regulation S-K.
The Company provided Grant Thornton with a copy of the foregoing statement. A letter from Grant Thornton, dated November 23, 2005, stating its agreement with such statement is attached as Exhibit 16.1 to this report.