The Securities and Exchange Commission’s enforcement division is launching three new initiatives to combat financial reporting and microcap fraud and enhance its risk analysis capabilities with the use of sophisticated analytical technology.
The Financial Reporting and Audit Task Force will be devoted to detecting fraudulent or improper financial reporting, enhancing the Division of Enforcement’s ongoing efforts related to accounting and disclosure fraud. The SEC said Tuesday the Financial Reporting and Audit Task Force would concentrate on expanding and strengthening the division’s efforts to identify securities-law violations relating to the preparation of financial statements, issuer reporting and disclosure, and audit failures. Word of the SEC’s increasing focus on accounting fraud began leaking out of the agency earlier this year after new SEC chair Mary Jo White, a former federal prosecutor, hired two co-directors of the enforcement division, George Canellos and Andrew Ceresney, who are also former prosecutors (see SEC Refocuses on Accounting Fraud).
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