The SEC has increased focus on identifying and penalizing misstatements in public company financials. What is one method that the SEC is using to identify companies, CEOs, and CFOs that are misstating financial statements?

Question

Quizplus · Accepted Answer

Analyzing patterns of internal control problems, even in the absence of a restatement of financials, is a method the SEC uses to identify potential misstatements in public company financial statements. This approach allows the SEC to spot issues that may not yet have resulted in a formal restatement but indicate underlying problems with financial reporting or internal controls.

The SEC Has Increased Focus on Identifying and Penalizing Misstatements