If it feels like the Securities and Exchange Commission is asking more questions about corporate America's financial practices, that's because it is.

But just how much more vigilant the SEC has become in the wake of the Enron ( ENRNQ) accounting scandal is hard to quantify. Following the collapse of Enron, government officials, along with the entire accounting profession, have come under fire for failing to detect the energy company's questionable bookkeeping practices earlier. Since then, the SEC has been scrambling to analyze annual reports for possible accounting irregularities or misstatements.

"The enforcement division says it is opening up more investigations but it doesn't have a statistic to point to," said SEC spokesman John Nester.

This month alone, a plethora of companies have announced that they have received letters of inquiry from the government or are the focus of an SEC investigation. Among them are Global Crossing ( GBLXQ), Calpine ( CPN), Nvidia ( NVDA) and Take-Two Interactive Software ( TTWO).

Typically, a letter of inquiry is an informal review, in which the SEC has no subpoena power but can ask companies to comment voluntarily, according to Howard Friedman, a securities law professor at the University of Toledo. Based on that information, the SEC can then decide whether it wants to go ahead with a more formal investigation and begin an enforcement procedure against the company.

The SEC couldn't offer specific data regarding the number of letters it has sent out this year or the number of investigations it has initiated.

Stop Making Sense

Thomas Hazen, a securities law professor at the University of North Carolina, said he wouldn't be surprised if the SEC had become more determined to pinpoint troublesome financial statements because "they gear enforcement to issues perceived as current problems."

With allegations of creative accounting becoming more widespread and more publicized, the SEC may be forced to look into a large number of companies, according to some experts. "It makes sense that they would be sending out more letters, but it's hard to judge," Hazen said.

Friedman said the SEC frequently shifts its focus and redeploys resources to areas that are hot-button issues at the time. In the 1960s and 1970s, the SEC devoted most of its time to reviewing registration statements, and the agency spent little time analyzing quarterly or annual reports, he said. "The question is how much staff they have and how they deploy that staff," he said. "There's never enough time to do everything."

SEC data from the past five years reveal no significant change in the number of enforcement proceedings brought against companies that have violated the law. Enforcement actions, which average about 500 a year, were actually slightly lower in 2001 than they were five years ago.

Some 103 enforcement actions were brought in 2001 for issues relating to improper financial disclosure, up a touch from a level of 100 in the prior year.

"As the head of the accounting task force has pointed out, the real difference (is the increase in the number of actions brought against) Fortune 500 companies," said the SEC's Nester. "Though again that's hard to quantify."

What Lies Between

John Gavin, president of SEC Insight, a private research company that gathers SEC documents, said whether or not the agency has stepped up its investigations, there is certainly greater visibility into the probes now, thanks in part to companies like his.

"We have no concrete evidence either way, but I know (our firm is) reporting more potential inquiries because our research techniques have improved," he said. "That may have contributed to the perception."

Through the Freedom of Information Act, Gavin obtains SEC documents that otherwise wouldn't be released to the public. He then publishes his findings to clients. But there are times when information is denied to him because it has the potential to interfere with an ongoing investigation.

After being denied access to information regarding Tyco ( TYC), Gavin released a note to clients warning them of a potential SEC inquiry. Tyco quickly refuted the claim, saying there was another inquiry relating to potential insider trading at a company it had acquired but that it didn't involve Tyco or its employees.

Gavin also requested information regarding Lockheed Martin ( LMT) and Abercrombie & Fitch ( ANF) but was denied access.

Both companies already have made reference to SEC investigations in earlier 10K filings, and Gavin said the matters disclosed sounded old and relatively minor, "but our denial of access took place just last week," suggesting that the issues may not have been resolved yet.

So the question remains: Are SEC inquiries actually increasing in volume or are we just hearing more about them now through third parties like SEC Insight? Most experts believe the answer lies somewhere in between.

"The new SEC chairman said he wanted a kinder, gentler SEC but he quickly realized that wasn't going to work," said Douglas Carmichael, professor of accounting at Baruch College in Manhattan. "They're attempting to demonstrate that they're going to be much more vigilant. But there's also much more public attention on this."

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