Material Weakness Remediation
Disclosing material weaknesses in internal control over financial reporting is one of the more difficult and stressful times a public company will encounter. Whether or not the material weakness accompanies a restatement, the Company is publicly reporting that there is a reasonable possibility that a material misstatement in its financial statements will not be detected or prevented by its internal controls. Management faces tremendous pressure from its Audit Committee, external auditors, regulators, and investors to not only remediate the material weakness quickly, but ensure it never reoccurs. The SEC has taken enforcement action against public companies for not remediating material weaknesses in a timely fashion and for having recurring material weaknesses over several years.