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February 2, 2023

Southern National Bancorp Not Ashamed to Admit That They’re Dumping KPMG to Save a Hundred Grand

Southern National Bancorp is swapping out KPMG as its auditor for Dixon Goodman Hughes Goodman. Perhaps this development isn't surprising since the firm had, what some might call, a significant restatement last year. But if you were to ask the SNB's President Rod Porter, as one Washington Business Journal reporter did, this isn't about accounting issues at all:

"It's not. There are no disagreements on accounting issues," he said. "It's simply a question of price."

That's the kind of candor you don't usually find in an 8-K. However! What you don't usually get in the media reports is the nitty-gritty (if you're into that sort of thing):  

The audit reports of KPMG on the effectiveness of internal control over financial reporting as of December 31, 2012 and 2011 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles, except that KPMG’s report indicated that the Company had not maintained effective internal control over financial reporting as of December 31, 2011 because of the effect of a material weakness on the achievement of the objectives of the control criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and contained an explanatory paragraph that identified the material weakness as related to the design and operating effectiveness of management’s controls over the review and assessment of the accounting for non-routine transactions. 

The 2012 report had no such additional language, which I'm sure management was happy about, but they still felt the need to find a better deal:  

Southern National (NASDAQ: SONA), which owns Sonabank, is saving more than $100,000 by moving its business to Dixon Hughes Goodman LLP, Sonabank CEO Georgia Derrico told me. "That's an awful lot for us." 

There's no shame in being bargain hunter.

Southern National Bancorp dismisses auditor KPMG [WBJ]

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