Auto loan provider United PanAm Financial Corp. said that it will restate three years of financial statements due to a programming error in its accounting system that led it to fail to properly reverse $3.1 million in accrued interest on certain charged-off accounts since 1998.

The error, which the company said resulted from a 1998 programming error in its computerized accounting systems, was uncovered during a review of the company's internal controls for Sarbanes-Oxley compliance.

The company said that it will restate its financial statements for the years ended Dec. 31, 2001, 2002 and 2003, and subsequent interim periods to correct the impact of the unreversed accrued interest of the charged-off accounts. The company expects the changes to reduce net income after taxes by approximately $389,000 in 2001, $690,000 in 2002, $1.1 million in 2003 and $650,000 for the first two quarters of 2004. It said that the impact for years prior to 2001 will be an aggregate reduction to retained earnings totaling about $271,000. These estimates are still subject to audit.

The company said that the error occurred when it reprogrammed its accounting systems in 1998 when it expanded its operations outside California and began purchasing simple interest automobile installment sales contracts.

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