The SEC Has Increased Focus on Identifying and Penalizing Misstatements

question 63

Multiple Choice

The SEC has increased focus on identifying and penalizing misstatements in public company financials. What is one method that the SEC is using to identify companies, CEOs, and CFOs that are misstating financial statements?

• A) Utilizing the whistleblower provisions of the Dodd-Frank Act to provide a hot line.
• B) Analyzing patterns of internal control problems even absent a restatement of the financials.
• C) Analyzing whether the CFO has implemented adequate internal controls and safeguards over the financial reporting function.
• D) Utilizing the company's ethics code to spot misstatements.

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Definitions:

Leadership Positions

Roles within an organization that entail directing, influencing, and managing others to achieve goals.

Blind Area

Part of the Johari window model, referring to information that others know about a person but the person is unaware of.

Johari Window

A cognitive psychological tool used to help people better understand their interpersonal communication and relationships.

Organizational Effectiveness

The extent to which an organization is productive and satisfies the demands of interested parties, such as employees, customers, and investors.