What Weakness?


According to an analysis by Compliance Week, the number of material weaknesses reported by large companies nosedived in 2007, largely due to SOX section 404 and improvements in internal control and the financial reporting community.

Compliance Week’s Material Weaknesses in Internal Control Over Financial Reporting analyzed 10-K and 10-K/A filings for 426 companies from the S&P 500. Of that group, 11 companies reported a total of 14 material weaknesses. The top problem areas included taxes (six reported weaknesses), financial procedures and personnel (two each), and revenue recognition and documentation (one each). The remaining two material weaknesses were considered in the area of “other accounting.”

Compliance Week performed the same analysis in 2006 with dramatically different results—nearly 900 material weaknesses were reported that year.

Source: www.complianceweek.com.

SPONSORED REPORT

Get your clients ready for tax season

Upon its enactment in March, the American Rescue Plan Act (ARPA) introduced many new tax changes, some of which retroactively affected 2020 returns. Making the right moves now can help you mitigate any surprises heading into 2022.

100th ANNIVERSARY

Black CPA Centennial, 1921–2021

With 2021 marking the 100th anniversary of the first Black licensed CPA in the United States, a yearlong campaign kicked off to recognize the nation’s Black CPAs and encourage greater progress in diversity, inclusion, and equity in the CPA profession.