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SEC enforcement: Does forthright disclosure and cooperation really matter?


  • Files, Rebecca


This study examines the conditions under which the Securities and Exchange Commission (SEC) exercises enforcement leniency following a restatement. I explore whether cooperation with SEC staff and forthright disclosure of a restatement (e.g., disclosures reported in a timely and visible manner) reduce the likelihood of an SEC sanction or SEC monetary penalties. After controlling for restatement severity, I find that cooperation increases the likelihood of being sanctioned, perhaps because it improves the SEC's ability to build a successful case against the firm. However, cooperation and forthright disclosures are rewarded by the SEC through lower monetary penalties.

Suggested Citation

  • Files, Rebecca, 2012. "SEC enforcement: Does forthright disclosure and cooperation really matter?," Journal of Accounting and Economics, Elsevier, vol. 53(1), pages 353-374.
  • Handle: RePEc:eee:jaecon:v:53:y:2012:i:1:p:353-374 DOI: 10.1016/j.jacceco.2011.06.006

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    Cited by:

    1. deHaan, Ed & Kedia, Simi & Koh, Kevin & Rajgopal, Shivaram, 2015. "The revolving door and the SEC’s enforcement outcomes: Initial evidence from civil litigation," Journal of Accounting and Economics, Elsevier, vol. 60(2), pages 65-96.
    2. repec:kap:jbuset:v:147:y:2018:i:3:d:10.1007_s10551-015-2956-y is not listed on IDEAS
    3. Duong Nguyen & Tribhuvan Puri, 2014. "Information asymmetry and accounting restatement: NYSE-AMEX and NASDAQ evidence," Review of Quantitative Finance and Accounting, Springer, vol. 43(2), pages 211-244, August.

    More about this item


    SEC enforcement actions; AAERs; Accounting restatements; Cooperation; Voluntary disclosure;

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting


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