Financial Restatements: Update of Public Company Trends, Market Impacts, and Regulatory Enforcement Activities

SEC agreed entirely with this recommendation. The agency said that while it is the Commission's policy to conduct its investigations on a confidential basis, and therefore the agency cannot confirm or deny the existence of an investigation, the Division of Corporation of Finance has been made aware of our findings and have taken appropriate actions, including making referrals to the Commission's Division of Enforcement where that is merited. The Division of Corporation Finance completed its review of potential noncompliance cases in 2007.

In a January 2008 speech, an SEC official said that SEC is likely to propose rulemaking this year that would require the filing of a Form 8-K any time a company has determined to restate its financial statements. Subsequently, on 8/1/08, the Advisory Committee on Improvements to Financial Reporting issued its final report with recommendations to increase the usefulness of financial information to investors. Recommendation 3.2 reflects GAO's recommendation on Item 4.02 of the Form 8K. Chairman Cox has asked SEC staff to immediately begin analyzing these recommendations and to prepare regulatory actions based on them wherever appropriate. As of 6/25/10 this matter remains current in that the Commission has identified it as a pending matter in the spring 2010 (most recently published) Unified Agenda of Federal Regulatory and Deregulatory Actions. An SEC official said that this project has been overtaken by other events and the timing of further work is subject to resources available and to Congressional priorities - such as those that will require immediate rulemaking work in response to Dodd-Frank Wall Street Reform and Consumer Protection Act. Since the Commission has included this recommendation in the Unified Agenda of Federal Regulatory and Deregulatory Actions as a pending matter, it is concluded that SEC has implemented the recommendation.