Security National Financial Corp. declared financial statements for the years ended Dec. 31, 2014, 2015 and 2016 unreliable due to errors identified by the company's management.
On Aug. 3, the company's audit committee met to discuss management's recommendation that because of the errors, Security National Financial should provide a comprehensive restatement for all the periods. The restatement will be filed in an amended annual report for the fiscal years ended Dec. 31, 2016 and 2015, and amended quarterly reports on Form 10-Q for the quarterly period ended Mar. 31, 2017, and the interim periods in 2016 and 2015.
The audit committee unanimously approved management's recommendation for a comprehensive restatement of the company's annual reports on Form 10-K and quarterly reports on Form 10-Q for the restated periods.
The errors were discovered by the company's management when it expanded the scope of its review process of the company's accounting policies and procedures. As a result of the expanded review, management determined the practice of treating its repurchase agreements with unaffiliated warehouse banks as off-balance sheet transactions and related sales accounting treatment were no longer GAAP-compliant. The company also discovered that the timing reversal of a tax valuation allowance should have occurred in a prior period.
The company discussed the matters with its current and former independent registered public accounting firm.