Financial Reporting

FINANCIAL REPORTING

A recent study by the Financial Executives Institute says the overall quality of corporate financial reporting is high, with relatively isolated, but significant, deficiencies. For example, in 2000, the earnings restatements of only 10 companies caused almost the entire decline in market value ( www.fei.org/download/QualFinRep-6-7-2k1.ppt ).

New forms of deceptive financial reporting are misleading investors, according to SEC Commissioner Isaac C. Hunt, Jr., who also says the agency is monitoring the effects of regulation FD on corporate disclosure and will, if necessary, amend the rule to stimulate the flow of information to the public ( www.sec.gov/news/speech/spch497.htm ).