SEC Enforcement Lawyers “Competitively Searching” for Financial Reporting Cases
The SEC’s Director of Enforcement, Andrew Ceresney, recently said that the SEC’s Enforcement Division has “refocused on financial reporting.” He indicated that the SEC “has numerous entrepreneurial attorneys and accountants … competitively searching for cases.” He said that the Enforcement Division brought 40% more financial reporting cases in 2014. He called upon industry gatekeepers to police financial reporting. He said that the SEC expects more due diligence by audit committees and warned that the SEC will “look at the work of the auditors to determine whether their audits were performed in accordance with industry standards.” He also cited the importance of compliance programs to avoid financial fraud.
OUR TAKE: Add financial controls to the CCO’s ever-expanding list of priorities. Also, firms and funds should not be surprised by increases in auditor fees and D&O premiums.