The SEC And Financial Reports

Financial scandals always seem to draw headlines, from Enron to Parmalat. Regulations such as Sarbanes-Oxley have been enacted to help reduce the likelihood of future financial scandals. With the additional tools, the SEC has become more focused on efforts to uncover financial fraud. For example, if a company impairs an asset, the SEC will ask why a company didn't impair the asset earlier. The SEC is also making sure that as company's financial statements have year-to-year consistency, as well as whether a company's accounting is consistent with industry practices.As a result, company management must be familiar with the company's accounting procedures and internal controls. Remember, the goal of the SEC is that a company accurately disclose its financial condition and risks