We examine whether SEC effort to review state sponsors of terrorism (SST) disclosure negatively influences financial reporting oversight. Using comment letter inquiries about SST to measure effort, we find the likelihood that the SEC fails to identify a financial reporting error increases when comment letters reference SST. Consistent with SST disclosure review crowding out financial reporting oversight, comment letters referencing SST are less likely to mention accounting, non-GAAP, and MD&A issues. These effects are unique to SST as we find comment letter references to non-SST issues complement financial reporting oversight. Data obtained through a Freedom of Information Act request reveals a temporal shift in the occupational mix of SEC reviewers towards (away from) lawyers (accountants) that coincides with an increased focus on SST. Path analysis reveals that accountants (lawyers) are more (less) likely to detect errors and comment on financial reporting topics, with an indirect path through SST exacerbating these effects.

我们研究了 SEC 审查支持恐怖主义的州 (SST) 披露的努力是否会对财务报告监督产生负面影响。使用有关 SST 的评论信查询来衡量工作量，我们发现当评论信提及 SST 时，SEC 未能识别财务报告错误的可能性会增加。与排除财务报告监督的 SST 披露审查一致，提及 SST 的评论信不太可能提及会计、非 GAAP 和 MD&A 问题。这些影响是 SST 独有的，因为我们发现对非 SST 问题的评论信参考补充了财务报告监督。通过《信息自由法》请求获得的数据显示，SEC 审查员的职业组合在时间上发生了转变（远离）律师（会计师），这与对 SST 的日益关注相吻合。