Magazine article Strategic Finance

New SEC Task Force on Financial Reporting

Magazine article Strategic Finance

New SEC Task Force on Financial Reporting

Article excerpt

Last month, the Securities & Exchange Commission (SEC) announced a new task force that will be on the lookout for companies using aggressive accounting that might suggest financial reporting or accounting fraud. The Financial Reporting and Audit Task Force will be headed by David Woodcock, director of the SEC's Fort Worth Regional Office. He says the task force will use data mining and other techniques to find these companies. In an interview with Strategic Finance, Woodcock explains that instead of relying on whistleblower tips or looking at public restatements, the task force will use internal and external data mining technologies and data-bases such as the SEC's Accounting Quality Model (AQM) to locate companies that appear to be skating on thin accounting ice. "We will incubate the cases, basically kicking the tires of the company's accounting," Woodcock says. If the task force finds some potential financial reporting or accounting fraud, it will refer the company to either a regional office or the national enforcement division for additional investigation.

Woodcock appears to be well suited for this job, which he will be doing part-time. Prior to obtaining a law degree, Woodcock worked for several years at Ernst & Young and then PricewaterhouseCoopers as an auditor and earned the CMA[R] (Certified Management Accountant) certification. The full-time responsibilities of the task force will be handled by a staff of four accountants and four lawyers, who will remain in their current locations and not relocate to Fort Worth. …

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