SEC goes back to basics with focus on accounting fraud

amybuttell

As an accountant — well, actually, someone with an accounting background — I have a keen interest in corporate accounting and the integrity of corporate financial statements. Unfortunately, sometimes those two things don’t comfortably co-exist (integrity and corporate financial statements).

While Generally Accepted Accounting Principles (GAAP), the set of standards that guides the presentation of corporate financial statements and supporting documents, may seem like a monolithic set of rules that are carved in stone with little or no room for interpretation, the bodies of financial statements that have been manipulated in the name of GAAP are piled high in a back room somewhere. There’s nothing like the pressure of analysts expectations for earnings or a large bonus on the line to get C-Suite executives to pressuring the CFO to fudge data just a bit…or a lot.

And when the watchdog is otherwise occupied, it would seem that the temptation would be…

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