This was a recent headline: The U.S. securities regulator (the SEC) aid that Healthcare Services Group in 2014 and 2015 failed to accrue for and disclose material loss contingencies related to the settlement of private litigation against the company in a timely fashion, as required by U.S. Generally Accepted Accounting Principles. Those contingencies would have reduced the company's income. By not recording the loss contingencies in the appropriate quarters, Healthcare Services Group reported EPS that met or came close to meeting analyst estimates, the SEC said. The company also reported multiple quarters of EPS growth, including then-record-high EPS, the regulator said. Required 1. Who, besides the company, is responsible for seeing that financial statements are not misleading? 2. Financial reporting is said to have a filter with three elements. Describe the elements of the filter. 3. Compensation committees should be aware of whether the compensation plan incentivizes wrongdoing. What processes can the put in place to offset compensation plan incentives for wrongdoing