Santander Consumer USA Inc. expects to report the existence of additional, previously unreported material weaknesses in internal control over financial reporting, according to a company press release issued Friday, September 23.
“The company has pointed to three new issues, and also indicated that, beyond these issues, there are additional weak policies that have not yet been disclosed,” Eric Wasserstrom, managing director at Guggenheim Securities LLC, told AFN. SC also announced accounting errors have led the company to prepare to restate financial statements and associated disclosures for the full years 2013, 2014, and 2015, and the quarters within 2014 and 2015, as well as the first quarter of 2016. The restatements are primarily related to the company’s accounting methodology for dealer discounts.
Previously in April, the company also refiled earnings three years back.
“There are three key points: One, the company continues to identify yet more areas where its accounting policies and procedures were inadequate; two, these inadequacies don’t result in a significant change in the company’s historically stated capital position — in fact they increased it slightly; but three, they do rise to the level of materiality that indicates that past financials that were filed with the SEC, and which they certified by executive management, can no longer be considered valid and have to be restated,” Wasserstrom said. “That’s not an insignificant thing.”
SC expects to complete the amended filings prior to the deadline for filing its Form 10-Q for the quarter ended Sept. 30, according to the release.
