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More Questions, and Evidence, on Undisclosed Control Weaknesses

Tammy Whitehouse | August 25, 2015

While an intense focus on internal controls in recent years is leading to improvement in financial reporting, regulators are growing more convinced that an underbelly of weaknesses still lurks in corporate accounts that isn’t being disclosed to investors.

Franzel-jeanette-0315In a recent speech to accounting academics, Jeanette Franzel, a member of the Public Company Accounting Oversight Board, presented a bevy of statistics that raise deep questions about the true state of internal controls over financial reporting among public companies. Why do so many companies with restatements issue clean reports on internal controls before restating financials? Does that mean material weaknesses in internal controls are not being identified? Or worse, are they being identified, but not reported?

Franzel said this “noise” in the... To get the full story, subscribe now.