Inventory Risks Deserve ‘Robust’ Reporting, SEC Official Says

Inventory theft that could eat into corporate profits or warehouses brimming with outdated goods should trigger reports to investors detailing the toll on a company’s financial results, an SEC official said Tuesday.

Sales declines, too much stock, or steep losses from theft “should be disclosed robustly and clearly,” Melissa Rocha, an accountant with the Securities and Exchange Commission, said at an American Institute of CPAs conference in Washington.

• Losses that could have a significant impact on financial results should be detailed in management’s discussion and analysis section of corporate reports. “To the extent that this ...