The number of internal controls weaknesses related to lease accounting issues jumped more than 10 percent in April, according to a report released this week.
Lease accounting errors - an issue bought to the forefront recently by the Securities and Exchange Commission -- comprised 22.5 percent of internal control weaknesses reported in April, up from less than 10 percent of weakness disclosures in March, according to the latest issue of corporate governance newsletter Compliance Week.
CW said 58 companies disclosed material weaknesses in their internal control over financial reporting last month.
Compliance Week noted that many of the companies making lease-related disclosures claimed they were being made in the wake of a letter written by the SEC's chief accountant to the American Institute of CPAs.
In a Feb. 7 letter to Robert Keuppers, chairman of the AICPA's Center for Public Company Audit Firms, the SEC's Donald Nicolaisen reiterated the commission's views on three issues related to lease accounting: amortization of leasehold improvements, rent holidays, and landlord/tenant incentives.
Shortly after the letter was published, a number of companies, including retailers Gymboree Corp. and Kohl's, announced plans to restate results.
