SEC's Pozen committee aims to reduce financial restatements, and members think new guidance on that sensitive issue will help with the effort.
The Securities and Exchange Commission has been very careful about defining what is — and what is not — "material" information for investors. Mainly, it has wanted to avoid setting bright-line rules that companies can finagle around. But while a strict financial-statement materiality definition may never be issued, on Friday an SEC advisory group drew close to recommending new guidance on how materiality affects financial restatements.
The Committee on Improvements to Financial Reporting, headed by Robert Pozen, chairman of MFS Investment Management, is due to release its final recommendations in August. The committee was formed last July by the SEC to help the regulator assess and eliminate "unnecessary complexity" within the U.S. financial reporting system.
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