On July 2, the SEC announced the formation of a Financial
Reporting and Audit Task Force. The task force, which will
include attorneys and accountants from the Division of Enforcement,
working with other offices of the SEC staff, "will 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." Its principal goal will be fraud detection and
"increased prosecution of violations involving false or
misleading financial statements and disclosures." The SEC also
announced the formation of a Microcap Fraud Task Force targeting
fraud involving microcap companies and a Center for Risk and
Quantitative Analytics.
This announcement comes on the heels of several recent news reports
that the SEC's new chairman, Mary Jo White, intends to increase
the SEC's focus on detecting and combatting accounting fraud.
The establishment of new task force appears to be consistent with
those reports.
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