<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>auditors8k.txt
<DESCRIPTION>LEVI STRAUSS AND COMPANY
<TEXT>
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                     --------------------------------------

                                    FORM 8-K

                                CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

          Date of Report (date of earliest event reported): May 6, 2002

                               Levi Strauss & Co.
             (Exact name of registrant as specified in its charter)


        DELAWARE                      333-36234                 94-0905160
(State of Incorporation)      (Commission File Number)         (IRS Employer
                                                          Identification Number)

         1155 Battery Street
      San Francisco, California                                     94111
(Address of principal executive offices)                          (Zip Code)

       Registrant's telephone number, including area code: (415) 501-6000


<PAGE>


ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT

   (a) Previous independent accountants

       (i) On May 2, 2002, Levi  Strauss & Co.  (the "Company")  terminated  the
       engagement of Arthur Andersen LLP as  its  independent  accountants.  The
       Company's Board of Directors participated in and approved the decision to
       change independent accountants.

       (ii) The  reports  of Arthur Andersen LLP on the financial statements for
       the past two fiscal years contained no adverse  opinion or  disclaimer of
       opinion and were not qualified or modified as to uncertainty, audit scope
       or accounting principle.

       (iii) In connection with its audits for the two most recent fiscal  years
       and through  May 2, 2002, there  have  been no  disagreements with Arthur
       Andersen  LLP  on  any  matter  of  accounting  principles  or practices,
       financial statement disclosure, or auditing  scope  or  procedure,  which
       disagreements if not resolved to the satisfaction of Arthur Andersen  LLP
       would have caused them to make reference thereto in their report  on  the
       financial statements for such years.

       (iv) During  the  two  most  recent fiscal years and through May 2, 2002,
       there have been no  reportable  events (as defined in Regulation S-K Item
       304(a)(1)(v)).

       (v) The Company has requested that Arthur Andersen LLP furnish it with  a
       letter  addressed  to  the  SEC stating whether or not it agrees with the
       above statements. A copy of such letter, dated May 6, 2002  is  filed  as
       Exhibit 16 to this Form 8-K.

   (b) New independent accountants

       (i) The Company engaged KPMG LLP as its new independent accountants as of
       May 2, 2002. During the two most recent fiscal  years and  through May 2,
       2002, the Company has not consulted with KPMG LLP regarding either:

           a. the  application  of  accounting   principles   to   a   specified
              transaction,  either  completed  or proposed; or the type of audit
              opinion  that  might  be  rendered  on  the  Company's   financial
              statements,  and  either  a  written  report  was  provided to the
              Company or oral advice was provided that KPMG LLP concluded was an
              important factor considered by the Company in reaching a  decision
              as to the accounting, auditing or financial reporting issue; or

           b. any matter that was either the subject of a disagreement, as  that
              term is defined in Item 304(a)(1)(iv) of Regulation  S-K  and  the
              related  instructions  to  Item  304  of  Regulation  S-K,  or   a
              reportable event, as that term is defined in Item 304(a)(1)(v)  of
              Regulation S-K.

<PAGE>


ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE

As described in the Company's Quarterly Report on Form 10-Q for the period ended
February  24,  2002,  the  Company  under  its U.S.  receivables  securitization
arrangement  is  required  to  maintain  the level of net  eligible  U.S.  trade
receivables  at a certain  targeted  amount.  As a result of the amount of sales
incentives  recorded and the manner in which those sales incentives were treated
in the calculation, the Company foresaw a decline in net eligible receivables as
well as an increase of the targeted amount during the first quarter of 2002.

In response,  the Company requested that the trustee under the arrangement begin
retaining cash  collections in an amount covering the deficiency.  This retained
cash was reported as restricted cash on the Company's balance sheet. The Company
indicated  in its Form 10-Q that it was  seeking an  amendment  to  address  the
treatment of sales  incentives and reduce their impact on the  calculations  and
the potential need for cash retention arising from incentive programs.

The Company  obtained this amendment on April 25, 2002.  The amendment  provides
for  different  treatment  of sales- and  promotions-related  items and dilutive
items.  As a result,  the Company  has greater  flexibility  in  designing  sale
incentives  without  affecting  the  securitization  calculations.  This  change
reduces the  likelihood  and amount of cash being  retained as a result of sales
incentive programs under the securitization  agreements. A copy of the amendment
document is filed as Exhibit 10 to this Form 8-K.

Statement Regarding Forward-Looking Disclosure:
This  report  includes  forward-looking  statements  about  the  Company's  U.S.
receivables securitization arrangement and its impact on the Company's liquidity
and sales incentives.  The Company has based these forward-looking statements on
the Company's  current  assumptions,  expectations and projections  about future
events. When used in this report, the words "believe,"  "anticipate,"  "intend,"
"estimate," "expect," "project" and similar expressions are intended to identify
forward-looking statements,  although not all forward-looking statements contain
these words.

These  forward-looking   statements  are  subject  to  risks  and  uncertainties
including,  without limitation,  risks related to the nature and amount of sales
incentives,  the amount of dilutive items, the net eligible  receivables balance
and the credit  quality of the  receivables  in any one period,  and other risks
detailed in the Company's  annual report on Form 10-K,  registration  statements
and other filings with the  Securities  and Exchange  Commission.  The Company's
actual results might differ  materially from  historical  performance or current
expectations.  The Company does not undertake any obligation to update or revise
publicly any forward-looking statements, whether as a result of new information,
future events or otherwise.

ITEM 7.  EXHIBITS

10    Amendment  No.1  dated as of  April 24, 2002, to  Master Indenture  Series
      2001-A Indenture Supplement and Receivables Purchase Agreement each  dated
      as of  July 31, 2001, by and among Levi Strauss  Receivables Funding, LLC,
      as  Issuer, Citibank, N.A. as  Indenture Trustee, Levi  Strauss  Financial
      Center Corporation as Servicer and Seller, and Registrar.

16    Letter from Arthur Andersen LLP to the Securities and Exchange Commission,
      dated May 6, 2002.

<PAGE>



                                    SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

Date:  May 6, 2002

                              LEVI STRAUSS & CO.


                              By /s/ William B. Chiasson
                                     -------------------
                                     William B. Chiasson
                                     Title:  Senior Vice President and
                                             Chief Financial Officer


<PAGE>

                                  EXHIBIT INDEX

Exhibit Number                                     Description
--------------                                     -----------

10       Amendment No. 1 dated as of April 24, 2002, to Master Indenture Series
         2001-A Indenture Supplement and Receivables Purchase Agreement each
         dated as of July 31, 2001, by and among Levi Strauss Receivables
         Funding, LLC, as Issuer, Citibank, N.A. as Indenture Trustee, Levi
         Strauss Financial Center Corporation as Servicer and Seller, and
         Registrar.

16       Letter from Arthur Andersen LLP to the Securities and Exchange
         Commission, dated May 6, 2002.

<PAGE>

                                                                      EXHIBIT 10

                                                                  EXECUTION COPY

                                 AMENDMENT NO. 1
                           dated as of April 24, 2002
                                       to
                                MASTER INDENTURE
                     SERIES 2001-A INDENTURE SUPPLEMENT AND
                         RECEIVABLES PURCHASE AGREEMENT
                         each dated as of July 31, 2001

         THIS AMENDMENT (this "Amendment") is  entered into as of April 24, 2002
                               ---------
by and among:

         (i)    LEVI STRAUSS RECEIVABLES FUNDING, LLC (the "Issuer"), a Delaware
                                                            ------
                limited  liability  company,  as  Issuer  under  the "Indenture"
                (defined below);

         (ii)   CITIBANK, N.A., a  national  banking association, as  "Indenture
                Trustee"  (in such capacity, the "Indenture Trustee");
                                                  -----------------

         (iii)  LEVI  STRAUSS  FINANCIAL  CENTER   CORPORATION,   a   California
                corporation  ("LS Financial"),  in its capacity as Servicer  and
                               ------------
                Seller  under  the  "Receivables  Purchase  Agreement"  (defined
                below) and as Servicer (in such capacity, the "Servicer")  under
                the "Indenture Supplement"; and

         (iv)   LEVI STRAUSS & CO., ("LS&CO."), a Delaware corporation.
                                      -------

                             PRELIMINARY STATEMENTS

         (A) Reference is hereby made to that certain Master Indenture dated  as
of July 31,  2001  between  the  Issuer  and  Citibank,  N.A.,  in its  separate
capacities as Indenture Trustee,  paying agent,  authentication  agent, transfer
agent and registrar (as amended, restated, supplemented or otherwise or modified
from time to time,  the  "Indenture";  terms  defined in the  Indenture  and not
                          ---------
otherwise defined herein are used herein as therein defined).

         (B) The Issuer, the Servicer and the Indenture  Trustee  are parties to
that certain Series 2001-A  Indenture  Supplement  dated as of July 31, 2001 (as
amended,  restated,  supplemented  or otherwise  modified from time to time, the
"Indenture Supplement").
 --------------------

         (C) The Issuer and LS Financial are parties to that certain Receivables
Purchase  Agreement,   dated  as  of  July  31,  2001  (as  amended,   restated,
supplemented  or  otherwise  or  modified  from time to time,  the  "Receivables
                                                                     -----------
Purchase Agreement"); and
------------------

         (D) LS&CO.  has  executed  in  favor of  the Issuer that certain Parent
Undertaking  dated as of July 31, 2001 (as amended,  restated,  supplemented  or
otherwise or modified from time to time, the "Parent Undertaking").
                                              ------------------
<PAGE>

         (E) For good and valuable consideration, the receipt and sufficiency of
which are hereby  acknowledged,  the  parties  hereto  have  agreed to amend the
Indenture, Indenture Supplement, and Receivables Purchase Agreement on the terms
and conditions hereinafter set forth.

         SECTION 1. Amendments to the Indenture. The Indenture is,  effective as
                    ---------------------------
of  the  date  first  written  above  and  subject  to the  satisfaction  of the
conditions precedent set forth in Section 4 hereof, hereby amended as follows:
                                  ---------

               1.1 The  definition of "Aggregate Adjustment Amount"  in  Section
                                       ---------------------------
         1.01 is amended to delete therefrom the phrase "plus (e) the  Marketing
         Allowance Reserve".

               1.2 The  definition  of  "Asset  Deficiency"  in  Section 1.01 is
                                         -----------------
         amended  to  delete  the  phrase  "Net Eligible  Receivables   Balance"
         contained therein and to substitute therefor the phrase  "Adjusted  Net
         Eligible Receivables Balance".

               1.3 The definition of "Series Floating Allocation Percentage"  in
                                      -------------------------------------
         Section 1.01 is amended to delete the phrase "Net Eligible  Receivables
         Balance"  contained  therein  and  to  substitute  therefor  the phrase
         "Adjusted Net Eligible Receivables Balance".

               1.4 Section 1.01 is further amended to add thereto  the following
         definitions in alphabetical order:

               "Accrued  Allowance  Amount"  shall  mean,  as  of  any  date  of
                --------------------------
         determination, for each  Eligible  Obligor,  an  amount  equal  to  the
         greater of (x) zero and (y) the amount by which all Incentive  Payments
         earned by such Obligor (whether or not due  and  owing  on  such  date)
         exceeds the Overconcentration Amount, if any, for such Obligor.

               "Adjusted Net Eligible Receivables Balance" shall mean, as of any
                -----------------------------------------
         date of determination, (x) the Net Eligible Receivables Balance  as  of
         such date minus (y) the sum of the Incentive Allowance Reserve and  the
                   -----
         Marketing Allowance Reserve as of such date".

               "Approved Sales  Program"  shall  mean  the  Originator's  rebate
                -----------------------
         program currently known as VIP Squared and  any  other  rebate  program
         initiated  by  the  Originator  which   other   program,   subject   to
         satisfaction of the Rating Agency Condition, is identified  in  writing
         to the Indenture Trustee as an "Approved Sales Program" for purposes of
         calculating the Incentive Allowance Reserve.

               "Incentive  Allowance  Reserve"  shall mean, as of  any  date  of
                -----------------------------

         determination, an amount equal to the sum of (x) the sum of the Accrued
         Allowance Amounts for each Eligible Obligor plus (y)  the  sum  of  the
         Projected Allowance Amounts for each Eligible Obligor.

               "Incentive Payments" shall mean, for any Obligor at any time, any
                ------------------
         discounts offered to such Obligor at the time  a  Receivable  is  first
         invoiced, any

                                       2
<PAGE>

         markdown or similar sales allowances granted to such Obligor,  and  any
         other amounts (whether or not due and owing at such  time)  offered  to
         such  Obligor by the Originator or the Servicer  under the Originator's
         Approved  Sales  Programs  on  account  of  rebates, incentive payments
         and similar adjustments.

               "Projected  Allowance  Amount"  shall  mean,  as  of  any date of
                ----------------------------
         determination during any calendar quarter, for each  Eligible  Obligor,
         an amount equal to the dollar number of  sales  to  such  Obligor  made
         during the same  calendar  quarter  of  the  previous  year  and  which
         qualified for incentive rebates times 105% (or such lower percentage as
         may satisfy the Rating Agency Condition) times the Projected  Allowance
         Percentage for such Obligor.

               "Projected Allowance Percentage" shall mean, as of  any  date  of
                ------------------------------
         determination during any calendar quarter, for each  Eligible  Obligor,
         the greatest of the following:

               (a) the percentage corresponding to the second  incentive  rebate
         percentage level offered to Obligors under  the  Originator's  Approval
         Sales Programs (which level is currently three percent (3%)),  or  such
         lower percentage as may satisfy the Rating Agency Condition;

               (b) the  incentive  rebate  percentage earned by such Obligor for
                   sales made during such calendar quarter;

               (c) the  greatest  incentive  rebate  percentage  earned by  such
         Obligor for sales made during any of the prior four  calendar  quarters
         (provided that, if the Rating Agency Condition has been  satisfied with
          --------
         respect thereto, the Servicer and the  Issuer  may  exclude  from  such
         calculations any sales made prior to  the second  calendar  quarter  of
         2002); and

               (d) if such Obligor has achieved 90% of the sales required during
         such  calendar  quarter  to  earn  a higher incentive rebate percentage
         level,  then the next higher incentive  rebate  percentage  above  that
         actually earned by the relevant Obligor."

               1.6 Section 2.10(b) is amended to delete  the  reference  to  the
                   ---------------
         phrase "Net Eligible Receivables Balance" contained in clause (viii)
         thereof and to substitute therefor the phrase "Adjusted Net Eligible
         Receivables Balance".

         SECTION 2.  Amendments  to  the  Indenture  Supplement.  The  Indenture
                     ------------------------------------------
Supplement  is,  effective as of the date first written above and subject to the
satisfaction of the conditions  precedent set forth in Section 4 hereof,  hereby
                                                       ---------
amended as follows:

               2.1 The definition of "Dilution Ratio" in Section 2.01 is  hereby
                                      --------------
         amended by adding, after the words "Dilutive Credits"  in  clause  (a),
         the  phrase "(exclusive  of  any Dilutive Credits relating to Incentive
         Payments)".

                                       3
<PAGE>

               2.2 The   definition  of  "Series  2001-A  Allocated  Receivables
                                          --------------------------------------
         Amount" in Section 2.01 is hereby amended to  delete  the  phrase  "Net
         ------
         Eligible  Receivables  Balance"  contained  therein  and  to substitute
         therefor the phrase "Adjusted Net Eligible Receivables Balance".

               2.3 Section 7.01(b) is hereby amended to delete the  phrase  "Net
         Eligible Receivables  Balance"  contained  therein  and  to  substitute
         therefor the phrase "Adjusted Net Eligible Receivables Balance".

               2.4 The form of Monthly Statement (Monthly  Receivables  Activity
         Report) attached to the Indenture Supplement  as  Exhibit C  is  hereby
         deleted and replaced in its entirety with the form of Monthly Statement
         attached to this Amendment as Exhibit A-1.

               2.5 The  parties  hereto  acknowledge  that  the  above-described
         amendment  to  the  definition  of  Dilution  Ratio  shall  be  applied
         retroactively for all calculations of the Dilution  Ratio  made  during
         calendar year 2002 and that future calculations of the Dilution Reserve
         Ratio, to the extent such calculations depend  on  calculations of  the
         Dilution Ratio at any  time  during  the  period  from January 1,  2002
         through the effective  date  hereof,  shall  be  calculated  using  the
         revised definition set forth herein.

               2.6 Concurrently with the effectiveness of  this  Amendment,  the
         Servicer shall recalculate on a pro forma basis the most recent Monthly
         Statement in  accordance with the revised definitions  set forth herein
         and  all  future  Daily  Receivables   Activity  Reports  incorporating
         calculations from the most  recent  Monthly  Statement  shall  use  the
         revised calculations set forth in such pro forma statement.

         SECTION 3.  Amendments  to  the  Receivables  Purchase  Agreement.  The
                     -----------------------------------------------------
Receivables  Purchase Agreement is, effective as of the date first written above
and  subject  to  the  satisfaction  of  the  conditions  precedent set forth in
Section 4 hereof, hereby amended as follows:
---------

         3.1 The definition of "Allocated Receivables Amount" in Section 1.01 is
                                ----------------------------
hereby amended to delete the phrase "Net Eligible Receivables Balance" contained
therein and to substitute therefor the phrase "Adjusted Net Eligible Receivables
Balance".

         3.2 The form of Daily  Receivables  Activity  Report  attached  to  the
Receivables  Purchase  Agreement as Exhibit D is hereby  deleted and replaced in
its entirety with the form of Daily Receivables Activity Report attached to this
Amendment as Exhibit A-2.

         3.3 The  form  of  Credit  and  Collection  Policy  attached   to   the
Receivables  Purchase  Agreement as Exhibit F is hereby  deleted and replaced in
its  entirety  with the form of Credit and  Collection  Policy  attached to this
Amendment as Exhibit A-3.

         3.4 The Servicer hereby acknowledges that its reporting and calculation
obligations  under the Receivables  Purchase  Agreement shall give effect to the
above-described  modifications  and  amendments  to the  Indenture and Indenture
Supplement.

                                       4
<PAGE>

         SECTION 4. Conditions Precedent. This Amendment shall become  effective
                    --------------------
as of the date first  written  above upon  receipt by the  Indenture  Trustee of
counterpart  signature  pages to this Amendment  executed by each of the parties
hereto and evidence satisfactory to the Indenture Trustee that the Rating Agency
Condition has been  satisfied and that the substance of this  Amendment has been
consented to by the Majority Investors.

         SECTION 5. Covenants, Representations and Warranties.
                    -----------------------------------------

              5.l Upon the effectiveness of this Amendment, (i) the  Issuer  and
         the  Servicer  hereby  reaffirm  all  covenants,  representations   and
         warranties made by them in the Indenture and  Indenture  Supplement  to
         the extent the same are not amended hereby  and  agree  that  all  such
         covenants, representations and warranties shall be deemed to have  been
         re-made as of the effective date of this Amendment, (ii) the Issuer and
         LS   Financial  hereby  reaffirm  all  covenants,  representations  and
         warranties made by them in the Receivables Purchase  Agreement  to  the
         extent the same  are  not  amended  hereby  and  agree  that  all  such
         covenants, representations and warranties shall be deemed to have  been
         re-made as of the effective date of  this  Amendment, and  (iii) LS&CO.
         hereby reaffirms all covenants, representations and  warranties made by
         it in the Parent  Undertaking  and  agrees  that  all  such  covenants,
         representations  and warranties shall be deemed to have been re-made as
         of the effective date of this Amendment.

              5.2 Each party to this Amendment hereby  represents  and  warrants
         that   this   Amendment   constitutes  its  legal,  valid  and  binding
         obligation, enforceable against  such  party  in  accordance  with  its
         terms.

         SECTION 6.  Reference to and Effect on the Agreements.
                     -----------------------------------------

              6.l Upon the effectiveness of this Amendment, (i)  each  reference
         in the Indenture or the Indenture Supplement to "this Indenture", "this
         Indenture Supplement", "hereunder", "hereof", "herein" or words of like
         import  shall  mean  and  be  a  reference  to the Indenture as amended
         hereby, and each reference to the Indenture and/or Indenture Supplement
         in  any  other  document,  instrument  or  agreement   executed  and/or
         delivered in connection therewith shall mean and be a reference to  the
         Indenture  and/or Indenture Supplement as amended hereby and (ii)  each
         reference  in  the  Receivables Purchase Agreement to "this Agreement",
         "hereunder", "hereof", "herein" or words of like import shall mean  and
         be a reference to the Receivables Purchase Agreement as amended hereby,
         and each  reference  to  the  Note  Purchase  Agreement  in  any  other
         document,  instrument  or  agreement  executed  and/or   delivered   in
         connection therewith shall mean and be a reference to the Note Purchase
         Agreement as amended hereby.

              6.2 Except as specifically amended above, the Indenture, Indenture
         Supplement  and  the  Receivables  Purchase  Agreement  and  all  other
         documents, instruments and  agreements  executed  and/or  delivered  in
         connection  therewith  shall  remain  in  full force and effect and are
         hereby ratified and confirmed.

                                       5
<PAGE>

              6.3 The execution, delivery and effectiveness  of  this  Amendment
         shall  not operate  as a  waiver  of  any right, power or remedy of the
         Issuer, the Indenture Trustee or  the  Noteholders  under  any  of  the
         Transaction  Documents  nor  under  any  other  document, instrument or
         agreement executed in connection therewith, nor constitute a waiver  of
         any provision contained therein, in each case  except  as  specifically
         set forth herein.

         SECTION 7. Execution in Counterparts. This Amendment may be executed in
                    -------------------------
any  number  of  counterparts  and  by  different  parties  hereto  in  separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken  together  shall  constitute  but one and the
same instrument.

         SECTION  8.  Governing  Law.  This  Amendment  shall  be  construed  in
                      --------------
accordance  with the laws of the State of New York applicable to agreements made
and to be performed  within the State of New York  (including  Section 5-1401 of
the General  Obligations  Law but otherwise  without  regard to conflicts of law
principles), and the obligations, rights, and remedies of the parties under this
Amendment shall be determined in accordance with such laws.

         SECTION 9.  Headings.  Section headings in this Amendment are  included
                     --------
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.

         SECTION 10.  Supplemental Indenture.  This Amendment shall constitute a
                      ----------------------
supplemental indenture within the meaning of Section 10.02 of the Indenture.

                                       6
<PAGE>


         IN  WITNESS  WHEREOF, the parties  hereto have caused this Amendment to
the Indenture,  the Indenture  Supplement and the Receivables Purchase Agreement
to be executed by their respective  officers thereunto duly authorized as of the
date first written above.



                                  LEVI STRAUSS RECEIVABLES
                                  FUNDING, LLC

                                  By:  _________________________________
                                       Name:  Joseph M. Maurer
                                       Title: Treasurer



                                  CITIBANK, N.A., not in its individual capacity
                                  but solely as Indenture Trustee, Paying Agent,
                                  Authentication Agent and Transfer Agent and
                                  Registrar

                                  By:  _________________________________
                                       Name:
                                       Title: Vice President



                                  LEVI STRAUSS & CO.

                                  By:  _________________________________
                                       Name:  Joseph M. Maurer
                                       Title: Vice President & Treasurer



                                  LEVI STRAUSS FINANCIAL CENTER
                                  CORPORATION

                                  By:  _________________________________
                                       Name:  Joseph M. Maurer
                                       Title:  Treasurer















                          Signature Page to Amendment

<PAGE>

                                                                      EXHIBIT 10




                                    EXHIBIT F

                          CREDIT AND COLLECTION POLICY

        A.  Credit and Collections Policy and Activities

            1.  Overview

            Levi Strauss Financial Center Corporation, the Servicer, is a shared
service center located in Eugene, Oregon. It is a wholly-owned subsidiary of the
Originator. Its primary business activities include performing transaction-based
processing functions for the U.S. operations of the Originator. These activities
include management of accounts payable,  general accounting,  payroll and vendor
relations, and, as provided by the Receivables Purchase Agreement, servicing the
Originator's receivables.

            The receivables function is executed through the Credit Process  and
Customer Process groups. The Credit Process Group, comprised of approximately 20
employees, manages the front-end (customer set-up and underwriting) and back-end
(bad debt  write-offs,  bankruptcy or collection  agency handling) of the credit
underwriting/credit extension processes. It also provides the day-to-day support
activities (for example, lockbox collections, receivables reporting, receivables
system balancing and imaging) for the Customer Process Group.

            The Customer Process Group, comprised of approximately 50 employees,
manages the day-to-day collection activities with retail customers,  actual cash
application against open invoices and resolution or determination of root causes
of claims or chargebacks.

            2.  Credit/Underwriting

            New Account Approval. The credit underwriting process begins once  a
potential  new customer had been  identified  by the  Originator.  The potential
customer  submits a "New  Account  Application"  package to the  Credit  Process
Group. The New Account  Application  package generally  includes a completed and
endorsed  credit  application,  a  completed  blanket  resale tax form,  current
financial  statements  and an  approval  memo from the  Originator.  The  Credit
Process  Group  obtains a current  Dun &  Bradstreet  report and credit and bank
references when appropriate.  The Credit Process Group also requests and reviews
business plans,  bank credit agreements and other  credit-relevant  materials in
appropriate  cases.  The Credit Process Group targets approval or disapproval of
an applicant within five working days after receipt of the completed New Account
Application  package but will extend that period  should it  determine  it needs
additional information.

            The Credit Process Group uses credit analysis software and considers
a variety of factors in making credit decisions. Those factors include: cashflow
generation,   earnings  trends,  financial  condition  (leverage  and  liquidity
levels), payment records,

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<PAGE>

business  projections,  bank covenant  content and  compliance,  and third party
ratings.  The Credit  Process  Group in certain  cases may conclude  that credit
should be conditioned  upon provision by the account of collateral to secure the
credit.  Collateral  can be in the form of cash or letters  of credit,  personal
guaranties and liens on personal property. The Credit Process Group also assigns
accounts a risk code.  Risk codes range from 1-5,  with 1  representing  minimal
risk and 5 representing high risk.

            Once the credit is approved, the Credit Process Group will assign  a
credit limit.  Usually,  the credit limit is based on projected sales volume and
the  credit  risk  level.  The credit  limit  approval  authority  levels are as
follows:

            Position                                      Limit Authority
            Servicer Manager or                Over            $5,000,000
            Credit Group Leader
            Sr. Credit Manager                                 $5,000,000
            Credit Manager -Mid-level                          $1,000,000
            Credit Manager -Lower-level                        $   20,000


            Each of these  approvers  is authorized to approve, on the account's
request,  a  temporary  increase up to an  additional  50% to  accommodate  peak
seasonal sales. Repeated over-limit requests will trigger a review of the credit
limit.

            If  an  applicant  is declined, the Credit Process Group will send a
letter to the applicant stating the reason credit was denied.  The applicant may
request review of the matter.

            Once an application is approved, the Credit Process  Group  sets  up
the  customer  in  Servicer's  Customer  Information  System.  The  New  Account
Application  package is then sent to the Imaging  Department  for  retention and
further reference.

            Annual Review. The Credit Process Group conducts  an  annual  credit
review of each customer.  It gives priority to accounts with risk codes of 4 and
5. The review involves analysis of financial statements and other credit data to
assess the level of risk and determine the  appropriate  terms of credit for the
account.  For larger or riskier accounts,  the Credit Process Group will monitor
more  frequently.  Monitoring  activities  include  tracking of financial  news,
review of filings with the SEC,  subscription  to third party  credit  agencies,
review of customer credit/trade references and discussions with the Originator's
customer  business  development  unit and the Customer Process Group. The Credit
Process Group will also review,  if available,  historical and projected  future
compliance  with bank  covenants,  and make customer  visits where  appropriate.
Based on these review  procedures,  the Servicer  will adjust credit terms for a
particular account.

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<PAGE>

            Credit Files.  More  recent  credit  files  for  each  customer  are
accessible by the Servicer at its Eugene  facility  through the imaging  system.
The file typically contains the New Account Application package, credit reviews,
financial statements and other relevant materials.

            3.  Order Processing

            Order Intake. Customers place product  orders  with  the  Originator
through designated field sales representatives, a multi-brand teleordering sales
function  serving smaller  accounts or  electronically  through  Electronic Data
Interchange  ("EDI").  The  orders  are  entered  into  the  Originator's  order
management system, Levi's(R) Advanced Business Systems ("LABS").

            Orders can be checked against available credit  limits  at  multiple
points in the order process:

     o        At order entry, an account's credit limit is checked every time an
         order is keyed into the LABS system. The order will not be accepted  if
         the credit limit is exceeded and the sales representative inputting the
         order will then receive an on-line message of such occurrence.

     o        At merchandise shipping, only orders that are  within  the  credit
         limit are permitted to actually ship.

            The LABS system  performs  credit  limit  checks  by  comparing  the
proposed  orders plus the  existing,  real-time  receivables  balances  with the
credit limit. Credit checks,  credit holds and releases,  and order stoppage are
performed  through the system.  Credit  managers can change or stop shipments at
each of the  Originator's  customer  service  centers  by  entering  appropriate
instructions in the system. Within certain constraints, the Credit Process Group
can also stop a particular  order when it is being filled at a customer  service
center. The Credit Process Group can also recall goods in transit in appropriate
situations.

            The Credit Process Group monitors a daily report which shows  orders
that were not  shipped  due to lack of credit  limit  availability.  The  Credit
Process Group may in some cases release individual orders or increase the credit
limit to allow the orders to ship. The Credit Process Group may require  advance
payment  or  collateral,  or  coordinate  with  the  sales  representatives  and
customers to prioritize which orders are most important,  when it is not prudent
to  release  all  orders at once.  The  Credit  Process  Group  will  notify the
appropriate  sales  representative at the Originator when accounts are placed on
hold. Sales  representative or customer requests for a credit limit increase are
granted  generally only if the  customer's  financial  performance  supports the
increases.

            Invoicing. The Servicer generates invoices at the time of  shipment.
Invoicing is performed on a batch process;  each day's invoices are printed that
same

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<PAGE>

night.  Invoice  printing  is  outsourced  to a third  party  located in Eugene.
Approximately 80% of invoices (in dollar terms) are invoiced electronically.

            Womens' products for all three brands are offered with an  8%  trade
discount.  The 8% trade discount reflects industry practice in womens' products.
Depending  on the  customer's  instructions,  the  Originator  will  direct  the
Servicer to invoice at net or gross of this 8% trade discount.  In either event,
for purpose of the borrowing base under the Indenture, these receivables will be
booked at their gross  amount and the trade  discount  will be  reflected  as an
allowance item.

            Shipping. The Originator uses third party freight carriers  for  the
shipment of all orders.  In most cases, the Originator uses preferred  carriers.
If a customer  requires a specific carrier,  then the Originator  generally will
arrange for the shipment to be made through that carrier.

            4.  Payment Terms

            In general, the Originator's standard payment terms are Net 30  Days
from  invoice  date.  However,  the  Servicer  does  not  flag  receivables  for
collection  activity  until the 37th day because the Servicer adds an additional
seven days to the terms to account for estimated  transit time.  This additional
seven day period is intended to reflect the retail industry's practice of Net 30
days from receipt of goods.

            Exceptions to the standard Net 30 Days terms are as follows:

     o        Caribbean, Puerto Rico, Guam, Mexican  border  accounts,  and  two
         Canadian border accounts are sold under Net 60 Days from  invoice  date
         to  accommodate  the  extended  transit  time  and/or  time  needed for
         merchandise  to  clear customs. As with standard terms, the receivables
         system adds an additional seven days to the Net  60  day  terms  before
         flagging the invoice for collection activity.

     o        Fabric customers are invoiced on Net 60 Day terms in conformity
         with industry standards.

     o        In certain cases to manage internal workload and  with  customers'
         approval, the  Originator may pre-ship products. Historically, however,
         the  Originator  has pre-shipped products no more than 15 days prior to
         the  originally  requested  shipment  date. For pre-shipment sales, the
         Originator sets terms of up to 52 days (37 days original term  plus  up
         to 15 days pre-shipment).

     o        To assist existing customers in setting up their initial inventory
         for a new store location, such locations may  be  given  an  additional
         dating,  generally  30  days,  in  addition  to the standard Net 30 Day
         terms. This is

                                       4
<PAGE>

         approved  on  specific  purchase  orders  only   upon   request  and/or
         direction by the Originator.

     o        To  assist  existing  customers  who  are  severely  affected by a
         natural disaster, the  customer  may  be  given  an  additional dating,
         generally  30-60  days,  in  addition to the standard Net 30 Day terms.
         This is granted only upon customer request.

            As a control procedure, the Servicer prepares a monthly download  of
all invoices  generated  during the month that are falling  outside the standard
Net 30 Day terms.  These invoices are then reviewed and invoices falling outside
of the standard terms are then escalated to the Originator and senior management
of the Servicer.

            5.  Collections Procedures

            Collections  Strategies and  Escalation.  The Customer Process Group
uses various  reports showing actual past due  information,  forecasted past due
information,  types of dilution items or chargebacks taken and others matters in
determining its  collections  strategy.  The group employs two basic  collection
strategies and sets of escalation  measures to obtain  delinquent  balances from
accounts.  The  collection  strategy  used  depends  upon whether the account is
treated as a "Major" or a "Multi-Brand Sales" account.

            For Major accounts (large department stores and/or chains):

     o      Customer Process Group associates first match due items to scheduled
         payment dates. By  using  internally  prepared  reports and information
         from customers, associates can identify items that are coming  due  and
         that  are  past  due.  This  information,  coupled with the associates'
         knowledge of the  customers'  payment habits,  allow  the associates to
         forecast potential collection problems and react to  them  before  they
         occur. The associates contact the customers to follow up on due items.

     o      Associates  contact   team   leaders   when   receiving   inadequate
         information  from  a Major account in response to collection questions.
         Associates and the team leader then  contact the  appropriate person at
         the  account (for example, the  controller or chief financial officer).
         If it is determined that steps can be taken to rectify the problem, the
         Customer  Process  Group  schedules  calls  or  onsite  visits with the
         customer  to  resolve  open  items.  If the matter is not resolved, the
         Credit Process Group and the Originator's customer business development
         group are contacted to gather information regarding  the  state  of the
         customer's business and develop a collection strategy.

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<PAGE>

     o      When all measures are exhausted, the team leader and the  associates
         present the situation to senior management for a decision about how  to
         proceed.

            Multi-Brand Sales accounts  are  comprised primarily of  independent
stores:

     o      Collection escalation procedures for these  accounts  are  generally
         triggered by Customer Process Group associates reviewing total past due
         and percentages past due. They also review the account's payment habits
         as well  as  assess  whether  there is  any  existing  security for the
         account that could offset the size of the exposure.

     o      If the customer is unable to pay, the associate will work with their
         team leaders and the Credit Process Group to  develop  next steps. Next
         steps could include a credit hold, negotiating a  drawdown on a  letter
         of credit (if one is available),  cash  in  advance  of  other  payment
         arrangement, or issuing a 10-day payment demand letter.

            Bankruptcy and Other Proceedings. The Servicer vigorously  exercises
rights as a trade vendor including using and defending  reclamation  rights and,
in bankruptcy cases,  defending against  preference claims. The Servicer handles
all bankruptcy  activity. A Credit Manager from the Credit Process Group attends
bankruptcy   meetings  as  appropriate   and  is  responsible  for  filings  and
interactions with bankruptcy counsel.

            6.  Write-Off Policy

            The  Servicer  maintains  two  basic  types  of  reserves: bad  debt
reserves and dilution  reserves.  Dilution reserves are further broken down into
reserves for returns and allowances and reserves for customer deductions.

            Bad  Debt  Reserves.  Bad  debt   reserves   are   established   for
uncollectible  accounts  arising from  insolvency or bankruptcy  situations.  An
account is written  off as a bad debt when all  internal  collection  procedures
have been  exhausted and the account is considered  uncollectible.  The Servicer
will  then  either  send  the  account  to  an  outside  collection  agency  for
skip-tracing  or, in the case of the account filing for  bankruptcy  protection,
continue  to handle  the  matter  internally.  The  Servicer  performs  bad debt
write-offs quarterly;  these write-offs are approved by the Credit Process Group
leader.

            Dilution   Reserves.   Dilution   reserves   are   established   for
uncollectible accounts arising from customers' disputes of amounts owed, whether
the claims are based on product  returns,  shortages,  handling  charges,  price
disputes or other factors.  Dilution  write-offs are either  automatic  based on
pre-set system  thresholds or manually  performed  through journal entries.  The
Servicer  periodically  reviews system thresholds to reduce the risk of customer
abuse. System-generated write-offs are performed daily and manual

                                       6

<PAGE>

write-offs are recorded monthly.  Manual dilution write-offs are approved by the
Customer  Process  Group  leader  or team  leaders  based on  pre-set  levels of
authority.

            7.  Dilution and Allowances

            Potentially dilution and  allowance  items  are  identified  by  the
Servicer within two days, on average, of receipt of customers' cash remittances.
The Servicer removes the items from the accounts  receivable  system ("ASI") and
records them in a separate  claims  processing and reporting  system ("CPR") for
further  handling by a Customer  Process  Group  associate  (For purposes of the
Indenture,   only  items  in  ASI  are  included  in  the  Eligible  Receivables
calculation.   Once  in  CPR,   items  are   automatically   excluded  from  the
calculation). The Customer Process Group associate will continue to research the
claim,  and,  within ten days,  is charged with  identifying  the reason for the
claim and  conveying  relevant  information  to the unit  within the  Originator
responsible  for the issue.  For claims  related to  distribution  centers  (for
example,  freight and handling charges), each distribution center has 30 days to
resolve the claim.  If there is no resolution  within this period,  the Customer
Process  Group's  traffic  team is  called in to  troubleshoot  the  issue.  The
Servicer charges off claims that the Servicer determines are appropriate.

      For the purpose of the Indenture, reporting in early 2002 was enhanced  to
permit the  differentiation  of dilutive  items between  dilution and allowance,
based  on the  reason  identified  for the  claims.  Dilution  captures  certain
deductions  made to the  reported  receivable  balance  other  than write - offs
(e.g., mispriced invoices,  incorrect shipments and returns,  handling charges).
Allowance  refers to the credit  items  purposely  created  as trade  discounts,
markdown or similar sales allowances,  and rebates and other incentive payments.
For example, markdown allowances are authorized deductions taken by customers as
a result of special sales incentives offered to these retail customers.

            In fiscal year 2000, all dilutive items recorded in  the CPR  system
were reported as dilution  regardless  if an item was actually an  allowance.  A
report from the CPR system of the top five  dilution  items for fiscal year 2000
have included marketdown allowances.  For fiscal year 2000, the top four type of
dilution items were first quality returns,  defective returns, co-op advertising
claims and handling charges,  and no other type of dilution exceeded 5% of total
claims.

     o      First Quality Returns and Defective  Returns.  These  two  types  of
         dilution  items  represent  product  returns  for  first  quality   and
         defective  merchandise.  First  quality  returns  usually  arise   from
         shipment of products of  incorrect  color,  size  or  style.  Defective
         returns  arise  from  the  products  not conforming to the Originator's
         quality  standards. First  quality  returns  are returned to inventory,
         while defective returns may either be destroyed or sold as  "rags".  In
         fiscal 2000, returns accounted for 51% of  the entire  year's  dilutive
         items. First quality returns comprised approximately 33% of all
         dilutive items.

                                       7
<PAGE>

     o      Co-op Advertising Allowances.  These represent  deductions taken  by
         customers in anticipation of approval of reimbursement Requests to  the
         Originator for co-op advertising spending on print ads like magazine or
         newspaper inserts and other marketing support programs.  Co-op programs
         are common in the retail  apparel  industry.  In  these  programs,  the
         vendor sets up a separate budget for each customer, usually based on  a
         percentage  of  sales  to  that  customer.  A  third  party   typically
         administers the co-op advertising  program,  reviewing,  auditing,  and
         paying  funds  against  the established budget according to the program
         rules established by the vendor and communicated to all customers at
         the beginning of each calendar year.  Program  rules prohibit customers
         from  taking  deductions  against  open  invoices  for "prospective" or
         "anticipated" reimbursement for co-op advertising funds, with a further
         stipulation  that  violation  may  result  in  discontinuance  of co-op
         advertising  support.  However, prospective deductions against invoices
         occur.  In  fiscal year 2000, this  category accounted for about 18% of
         the entire year's dilutive items.

     o      Handling Charges. These represent deductions for early/late ship  or
         non-compliance with customers' shipping instructions relating  routing,
         packing slips, EDI instructions, labeling, packaging or other items. In
         fiscal year 2000, these deductions accounted for about 9% of the entire
         year's dilutive items.

              The Servicer charges off claims that the Servicer  determines  are
appropriate.

            8.  Cash Management

            The  Servicer  receives  payment  in  one  of three forms: EDI, wire
transfer  or  check.  These  payments  are  deposited  into one of four  lockbox
accounts located throughout the United States.

            By 5:30 p.m. Pacific time each day, the Servicer receives the  day's
cash receipts from various lockbox banks. The system automatically  applies cash
to the applicable open invoices.  The Servicer's  collection  system,  Autocash,
automatically posts all checks which it can match to an account according to the
MICR  number  on  the  check.  Approximately  95%  of the  checks  received  are
automatically  matched to an account  number.  The remaining 5%, which  includes
money  orders,  are  classified  as  "unidentified  checks" and sent to the cash
control unit within the Servicer to be researched.  Once the correct  account is
determined, the check is manually posted.

            Checks automatically posted to an account are compared  against open
invoices on the system. Autocash compares information included with the check to
any open items on the account.  Autocash  determines  whether the dollar amounts
for the selected items match the customer's  payment.  If there is a match, then
the  account  is

                                       8

<PAGE>

adjusted for the payment. In terms of number of checks, approximately 95% of the
invoices  keyed by the lockbox bank match an open invoice.  If no match is made,
the check is  classified as  "suspense."  This is often the result of a customer
taking  some  form  of  deduction  against  the  invoice.  These  items  must be
researched to determine  whether or not the deduction is valid.  Based on dollar
amount of remittances,  approximately 65% of the total amount of the remittances
are  automatically  matched to accounts  and open  invoices  on the system.  The
remaining 35% are manually processed.

The Customer Process Group targets three days to "balance" a remittance received
from a customer.  The group  determines  which  invoices  were included and what
deductions  were applied.  As soon as the remittance  batches are balanced,  the
dilutive items are moved off ASI and onto CPR for resolution.

                                       9


<PAGE>
                                                                      EXHIBIT 16



Office of the Chief Accountant
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549


May 6, 2002

Dear Sir/Madam:


We have read Item 4 included in the Form 8-K dated May 6, 2002 of Levi Strauss &
Co. to be filed with the Securities and Exchange Commission and are in agreement
with the statements contained therein.

Very truly yours,

/s/ Arthur Andersen LLP


cc: Mr. William B. Chiasson, Senior Vice President and Chief Financial Officer,
    Levi Strauss & Co.




</TEXT>
</DOCUMENT>
