SEC's stance on restatements raises brows

The conventional wisdom seems to be that restatements stemming from material weaknesses have declined. That seems to be most true when it comes to big companies. You would have to think that Sarbanes-Oxley had something to do with that. Six years in, most companies have a better grip on their financials, but the law isn't the only factor. Financial Week reports that some critics say the SEC has taken a more lax view toward restatements. Chief accountant Wayne Carnall--who joined the SEC in 2007 after a stint in PricewaterhouseCoopers' national office--may bring more of an auditor's sympathies to the process. More companies seem to be asking advice and being told that they do not need to restate. It will be interesting to see how small companies are affected. You would expect a rise on restatements as the law takes hold. We'll see if that bump materializes.

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