SEC Guidance on Common Financial Reporting Issues Facing Smaller Reporting Companies

Posted by Rick Jordan on April 03, 2013

The SEC recently posted to its website a slide deck (PDF) from a staff presentation at the Forums on Auditing in the Small Business Environment.  The slides describe, among other things, some of the issues that the SEC frequently encounters in periodic filings made by smaller reporting companies.

When commenting on the periodic reports of smaller reporting companies, the SEC generally requests:

  • additional information;
  • additional or clarifying disclosure in future filings; or
  • filing amendments to revise financial statements or disclosure.

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MIND THE GAAP: The Auditor's Dilemma

Posted by Gardere Wynne Sewell LLP on October 31, 2011

Audit firms are smack in the middle of the tension between U.S. and Chinese regulators with respect to allegations of accounting fraud at Chinese companies traded on U.S. exchanges.  At present, a Chinese affiliate of Deloitte is in the uncomfortable limelight for its work auditing Longtop Financial Technologies.

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Mind the GAAP: Regulator Talks to Continue

Posted by Gardere Wynne Sewell LLP on August 30, 2011

In the continuing wake of fraud and accounting irregularities at Chinese companies listed on U.S. exchanges, negotiations that began last month between U.S. regulators and their Chinese counterparts (as we discussed in July 2011) are expected to resume in October 2011.

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Mind the GAAP: Addressing Fraud Trends at Chinese Companies

Posted by Gardere Wynne Sewell LLP on July 26, 2011

Last month we noted a trend concerning fraud and accounting irregularities at NYSE- and Nasdaq-listed Chinese companies.  The trend is not being ignored:  on July 11 and 12, representatives from the SEC and the Public Company Accounting Oversight Board (“PCAOB”) met with representatives from the China Securities Regulatory Commission and China’s Finance Ministry.   The SEC and the PCAOB (which oversees audit firms) are seeking cross-border oversight that would allow U.S. examiners to inspect audit firms in China, which Chinese officials have claimed violates China’s existing laws relating to state secrets.  But whether China can afford to resist such access cannot be ignored: according to Bloomberg, “Chinese companies listed in the U.S. have had $4.1 billion wiped off their market value this year amid a wave of auditor resignations and fraud allegations by short-sellers . . . .”

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