Due to a shareholder lawsuit, a Cornell spokesman declined to comment on what sparked the internal investigation. Instead, the spokesman referred to a press release which says the restatement followed "discussions with its independent auditors and outside advisors." The press release makes no mention of the SEC.
According to one of CFO.com's sources, the Cornell case is just one example of the diminshing sway of the corporation finance office inside the SEC. Last winter, says the source, members of both the corporation finance office and the accounting office raised issues about a large cable manufacturerís inventory accounting. Soon after, the SEC requested a restatement from the company. When the registrant balked, however, the source says pressure was put on the corporation finance division to rescind the request. Ultimately, the corporation finance division backed down. To date, the cable manufacturer has not issued a restatement.
Admittedly, some internal disagreements about restatements is normal. "But," one SEC insider insists, "there's clearly a hesitancy as to whether they should press restatement issues in light of what the chairman has said."
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