Our analysis of the trends in material weaknesses is based on our cumulative research of public companies with a market capitalization between $100 million and $1 billion dollars and extends back to January 1, 2013. In addition to the cumulative analysis to the right, we analyzed the trends in the top 5 material weakness categories over the previous CFGInsights editions which confirms consistency related to material weaknesses period over period.
The cumulative research continues to indicate that the most common material weakness impacting companies are financial reporting related. Companies note in their remediation responses that staffing constraints and process breakdowns stemming from increasing regulatory pressures are the primary causes of the material weaknesses.
CFGI has the knowledge and expertise that comes from assisting companies with their control remediation efforts and provide process improvements. We team with clients to develop a robust, yet cost-effective approach to enhance their control environment. Our experience working with the largest public accounting firms validates our approach to proper control design and implementation while managing effectiveness in order to mitigate the likelihood of control deficiencies.