Accounting & Tax

Numbers Racket

SEC officials making noise about shoddy corporate accounting practices.
Stephen TaubNovember 29, 2001

The SEC reiterated its plans to come down hard on companies with questionable accounting practices.

In an interview with Reuters, SEC officials noted that the commission filed 112 financial reporting cases so far this year, up from 103 in 2000, 94 in 1999, and 79 in 1998,

“It certainly reflects that over the last year, financial reporting was a priority area for the enforcement division and for the commission,” Stephen Cutler, director of the SEC’s enforcement division, told the wire service.

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“Financial issuer reporting cases have always been one of the cornerstone programs,” Joan McKown, enforcement division chief counsel, told Reuters. “They will continue to be an important part, along with several other areas.”

The SEC brought a total of 484 enforcement cases in fiscal 2001, down from 503 in 2000 and 525 in 1999, but roughly in line with the overall caseload of recent years, said McKown. Since 1998, however, financial reporting has accounted for a larger percentage of SEC enforcement cases each year, rising to 23 percent in 2001.

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