Audit Analytics has released a Comment Letter Briefing inquiring into transactions similar to Lehman Brothers Repo 105s. Using the Audit Analytics SEC Comment Letters database which contains over 115,000 analyzed letters, our study identified 203 letters sent by the SEC addressing 115 transactions by 102 companies where a potential problem with SFAS 140, ¶9 was identified.

Some highlights of the briefing include:

• Based on the number of letters the SEC sent inquiring about SFAS 140, ¶9 compliance, it is reasonable to assume that the SEC would have made an investigation of Repo 105 and Repo 108 transactions at Lehman had it been aware of the practice.
• After the SEC's inquiries regarding the application of SFAS 140, ¶9, four registrants restated their financial statements to reflect, possibly among other things, a change in the accounting approach used for the transactions at issue.

The briefing was featured in a July 21 Wall Street Journal article and is now available to subscribers.