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Sarbanes-Oxley News & Developments
Red FlagsFinancial reporting
> > Appendix E of a report from the NACD Blue Ribbon Commission on Audit Committees points out 18 red flags that could signal potential problems and possibly result in some unfortunate and embarrassing situations. Being aware of these and then drilling down into more detail would prevent manageable situations from becoming unmanageable.
This would enable the dealing with real problems if they exist in a timely manner before serious damage. They cover a wide range of indicators from last minute and/or complex transactions, management control over the internal and external auditors, evasiveness to no typical accounting practices/methods, numerous adjustments and restatements.
Source: American Corporate Counsel Association (PDF File)
Published:2003-02-25
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