Skip to Main Content

SEC Spotlight

SEC Spotlight

 

Financial Reporting and Audit (FRAud) Group

 

Investor Advisory Committee header  

“The importance of pursuing financial fraud cannot be overstated. Comprehensive accurate and reliable financial reporting is the bedrock upon which our markets are based.”

 — SEC Enforcement Director Andrew Ceresney

 

The SEC Enforcement Division’s Financial Reporting and Audit (FRAud) Group is strengthening the agency’s efforts to identify and prosecute securities law violations related to financial reporting and audit failures.  

In addition to identifying securities law violations in the preparation of financial statements and the disclosure of financial information to investors, the FRAud Group is identifying and exploring areas susceptible to fraudulent financial reporting. These efforts include an ongoing review of financial statement restatements and revisions, an analysis of performance trends by industry, and the use of technology-based tools.

Examples of Filed Actions:

The work of the FRAud Group has led to a number of matters undertaken across the Division, including inquiries, investigations, and filed enforcement actions. Examples of these matters include:

 

Blow the Whistle on Financial Reporting Fraud


Whistleblower image

 

The Financial Reporting and Audit Group welcomes input and information from public stakeholders who are in unique positions to help curtail financial reporting and accounting fraud, either by reporting such misconduct directly to the SEC or by sharing valuable research to inform the FRAud Group’s efforts.

Corporate Insiders

Information from a corporate insider may be the springboard for the SEC to launch an investigation, or the final piece of the puzzle in an existing investigation. The FRAud Group is particularly interested in receiving information from corporate insiders who may have witnessed or gained knowledge about improper conduct related to the preparation and audit of financial statements of public companies. In fact, fraud related to the preparation of financial statements or issuer reporting and disclosure can be extremely difficult to uncover without the help of corporate insiders. Submit a tip or complaint

Gatekeepers

The SEC draws on a number of sources to help identify possible financial fraud. Attorneys and auditors involved in the financial reporting process can spot misconduct by a company, its management, or its auditor. Submit a tip or complaint

Academics

Part of the FRAud Group’s mandate is to develop a deep understanding of the state of financial reporting specifically with respect to areas that are susceptible to fraudulent financial reporting and the related internal controls. Academics and others performing research in this area are invited to submit working and final drafts of academic research relevant to the FRAud Group’s work. As a matter of policy, SEC staff will not comment or serve as editor/reviewer for submitted papers, but the research may be helpful in informing the work of the FRAud Group. Submit papers or other research information to: FRAudGroup@sec.gov

Email Updates

Signup for news about this topic.

 

Resources


News Release Announcing the Creation of the Task Force

Enforcement Director’s Keynote Address on Financial Reporting and Audit Fraud

Enforcement Co-Director's Speech on Financial Reporting and Accounting Fraud

History of Financial Reporting and Audit Cases

 

 

Print Facebook Twitter Email Share
Facebook Twitter Email
Modified: Nov. 8, 2016