SEC charges four companies with ICFR failures
FINANCIAL REPORTING INSIGHTS |
On January 29, 2019, the SEC announced that it had settled charges against four public companies for failing to maintain internal control over financial reporting (ICFR) for seven to ten consecutive annual reporting periods. According to the SEC’s orders, year after year, the four companies disclosed material weaknesses in ICFR involving certain high-risk areas of their financial statement presentation. Each of the four companies took months, or years, to remediate their material weaknesses after being contacted by the SEC staff. One of the companies is still in the process of remediating its material weaknesses.
Melissa Hodgman, an Associate Director in the SEC’s Enforcement Division, stated, “Companies cannot hide behind disclosures as a way to meet their ICFR obligations. Disclosure of material weaknesses is not enough without meaningful remediation. We are committed to holding corporations accountable for failing to timely remediate material weaknesses.”