Three SunTrust employees were fired last year in connection with accounting irregularities--deficiencies in the bank's method of determining loan-loss reserves--uncovered by an internal investigation. The investigation revealed inadequate control procedures, insufficient documentation, and a failure to detect errors in loan-loss calculations.
The bank restated earnings upward for the first half of the year because of the discovered irregularities.
Under the Sarbanes-Oxley Act's section 404, companies must include within their annual reports a statement from management attesting to the effectiveness of internal controls over financial reporting. SunTrust has said it probably will be unable to make such a statement in its 2004 annual report.