The Accounting Policy & Practice Report ® provides financial accounting policy makers, advisors, and practitioners with the latest news, expert insights, and guidance on emerging, evolving,...
April 29 — Financial reporting and audit cases will continue to be a major focus of Securities and Exchange Commission enforcement efforts, Enforcement Director Andrew Ceresney said April 29.
The number of such cases has more than doubled in the last two years, from 53 to 114, Ceresney said in New York on a Practising Law Institute panel.
More specifically, the SEC expects to bring cases in the coming months against accounting professionals that don't perform adequate independent audits, he said. The cases would be similar to recent multi-million dollar cases against BDO USA LLP and Grant Thornton LLC The cases are part of the agency's focus on gatekeepers, including outside auditors, Ceresney said.
Meanwhile, the SEC’s Division of Corporation Finance will increasingly challenge corporate disclosures that deviate from generally accepted accounting principles, Division chief accountant Mark Kronforst said April 28 (see related story).
The SEC also is pressing to claw back compensation from executives of firms implicated in financial reporting cases, even if the individuals haven't been charged with fraud, Cerseney said. The commission also expects to name more individuals in accounting enforcement actions, he said. The authority to allege negligence in addition to recklessness “gives us the ability to stretch widely in the individual realm,” he said.
A recent settlement with oil company Magnum Hunter Resources Corp. set an important precedent in the internal controls arena, Ceresney said. The firm and four individuals in March agreed to pay $290,000 in fines over alleged internal-control deficiencies, even though the company hadn't posted incorrect accounting numbers and wasn't accused of fraud . The case sends an important message that there can be an enforcement action even if a firm hasn't made a misstatement, Ceresney said. “It's forward-looking—what your likely result is in the future,” he said.
In addition, the agency soon will be bringing actions against municipal securities issuers as part of its Municipalities Continuing Disclosure Cooperation (MCDC) initiative, Ceresney said. The program, announced in March 2014, has focused on deficient disclosure practices involving municipal securities . The SEC already has sent settlement offers to certain issuers, an attorney told Bloomberg BNA in February .
To contact the reporter on this story: Richard Hill in Washington at email@example.com
To contact the editor responsible for this story: Phyllis Diamond at firstname.lastname@example.org
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)