{"id":2497,"date":"2023-03-22T12:59:22","date_gmt":"2023-03-22T16:59:22","guid":{"rendered":"https:\/\/seci.wpenginepowered.com\/?p=2497"},"modified":"2023-03-22T12:59:26","modified_gmt":"2023-03-22T16:59:26","slug":"internal-controls-remediation-required-in-an-accounting-related-enforcement","status":"publish","type":"post","link":"https:\/\/seciblog.pli.edu\/index.php\/internal-controls-remediation-required-in-an-accounting-related-enforcement\/","title":{"rendered":"<strong>Internal Controls Remediation Required in an Accounting-Related Enforcement<\/strong>"},"content":{"rendered":"<p style=\"font-weight: 400;\">On March 13, 2023, the <a href=\"https:\/\/www.sec.gov\/litigation\/litreleases\/2023\/lr25662.htm?utm_medium=email&amp;utm_source=govdelivery\">SEC announced<\/a> the latest in a string of accounting fraud enforcement actions.\u00a0 The frequency of these announcements is not surprising in the current economic environment.\u00a0 If you have not read the Chief Accountant\u2019s remarks about fraud risk, you might want to check out this <a href=\"https:\/\/seciblog.pli.edu\/fraud-a-forewarning-message-from-the-chief-accountant\/\">blog post<\/a>.<\/p>\n<p style=\"font-weight: 400;\">This latest case focuses on an all-time favorite accounting fraud area, revenue recognition.\u00a0 According to the SEC\u2019s <a href=\"https:\/\/www.sec.gov\/litigation\/litreleases\/2023\/lr25662.htm?utm_medium=email&amp;utm_source=govdelivery\">Litigation Release<\/a> and <a href=\"https:\/\/www.sec.gov\/litigation\/complaints\/2023\/comp25662.pdf\">Complaint<\/a>, a division-level finance director at Evoqua Water used bill and hold tricks to recognize revenue earlier than appropriate.\u00a0 This flavor of accounting fraud is not new.<\/p>\n<p style=\"font-weight: 400;\">What makes this case different is a formal undertaking to improve internal controls.\u00a0 According to the SEC\u2019s Complaint, one of the causes of the company\u2019s misstatements and resulting violations of the securities laws was \u201cnegligent conduct at Evoqua\u2019s corporate level in managing the financial reporting and accounting controls processes.\u201d\u00a0 According to the Litigation Release the SEC\u2019s order will require Evoqua to:<\/p>\n<p style=\"font-weight: 400; padding-left: 40px;\">\u201c\u2026comply with certain undertakings, including an agreement to implement recommended improvements to its system of internal accounting controls.\u201d<\/p>\n<p style=\"font-weight: 400;\">The company will also pay an $8.5 million fine.<\/p>\n<p style=\"font-weight: 400;\">There are many more details about the cases against the company and the now former division-level finance director in the <a href=\"https:\/\/www.sec.gov\/litigation\/litreleases\/2023\/lr25662.htm?utm_medium=email&amp;utm_source=govdelivery\">Litigation Release<\/a> and <a href=\"https:\/\/www.sec.gov\/litigation\/complaints\/2023\/comp25662.pdf\">Complaint<\/a>.<\/p>\n<p style=\"font-weight: 400;\">As always, your thoughts and comments are welcome!<\/p>\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On March 13, 2023, the SEC announced the latest in a string of accounting fraud enforcement actions.\u00a0 The frequency of these announcements is not surprising in the current economic environment.\u00a0 If you have not read the Chief Accountant\u2019s remarks about fraud risk, you might want to check out this blog post. This latest case focuses &hellip; <a href=\"https:\/\/seciblog.pli.edu\/index.php\/internal-controls-remediation-required-in-an-accounting-related-enforcement\/\" class=\"more-link\">Continue reading <span class=\"screen-reader-text\"><strong>Internal Controls Remediation Required in an Accounting-Related Enforcement<\/strong><\/span> <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[143],"tags":[],"coauthors":[154],"class_list":["post-2497","post","type-post","status-publish","format-standard","hentry","category-hot-topic"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts\/2497","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/comments?post=2497"}],"version-history":[{"count":0,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts\/2497\/revisions"}],"wp:attachment":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/media?parent=2497"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/categories?post=2497"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/tags?post=2497"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/coauthors?post=2497"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}