PracticeAuditSEC to crack down on disclosures

SEC to crack down on disclosures

The Securities and Exchange Commission is to monitor the annual reports of all Fortune 500 companies' filing with it during 2002.

The move forms part of a bid by the SEC to step up its attempts to understand and crack down on accounting disclosure made by US corporations.

An SEC statement, said it would focus on disclosures that seemed critical to understanding a company’s results, but would also look at those that seem to ‘conflict significantly with generally accepted accounting principles or commission rules, or to be materially deficient in explanation or clarity.’

SEC chairman, Harvey Pitt, recently stated bogus pro forma financial statements that make a loss look like a profit, without explaining this clearly, would almost certainly be viewed as fraudulent or confusing.

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