It's been more than a decadesince a series of scandals involving companies like WorldCom andEnron made headlines, exposing levels of financial fraud thatstartled most Americans and put federal regulators into a state ofhigh alert. In the years since those scandals, the Securities andExchange Commission (SEC) has put a tighter focus on financialdisclosure statements in an attempt to root out “soft information”and uncover true financial fraud.

The fact of the matter is, financial disclosure documents havealways represented a bit of a minefield for public companies, butnowadays, SEC scrutiny is even greater. The Commission looksclosely at financial statements, down to the smallest footnote,putting more pressure on true financial metrics, but also on theexplanations for matters ranging from revenue to risk.

Increased focus
By putting more emphasison these financial disclosure documents, the SEC has shone thespotlight on the information contained within, digging deep whenpossible.