The SEC investigation into Alibaba’s accounting, disclosed yesterday in an Alibaba annual filing that sent shares plummeting 7%, is focused on two important targets that Jack Ma’s company has celebrated in the past. The first is using off-balance sheet affiliated companies, which help keep Alibaba (BABA) asset-light and profit margins high. The second is the China shopping holiday Singles Day that Alibaba single-handedly built into an international spectacle.

First of all, the SEC investigation appears important. The language Alibaba used in its annual report to disclose the news suggests that the SEC’s Division of Enforcement, which investigates possible violations of federal securities laws, is leading the investigation, according to Paul Gillis, an expert on Chinese company accounting who teaches at the Guanghua School of Management in Beijing.

So now the question is what Alibaba has done.

Let’s start with Alibaba’s affiliated companies. The most important is Cainiao, a delivery logistics business that Alibaba effectively controls with 47% ownership. But Alibaba doesn’t incorporate all of Cainiao’s revenue and expenses or operating losses. Cainiao lost approximately $120 million over the past couple years. Being unburdened by delivery is one reason Alibaba’s profit margins have averaged 40% over the past couple years while rival JD.com, which has constructed an end-to-end delivery system, hasn’t posted a profit. The SEC is looking into how Alibaba treats these companies on its balance sheet.

The direct effect of moving Cainiao onto its balance sheet would mean Alibaba’s income for the last two years would drop by the amount of Cainiao it currently doesn’t account for. That would include 53% of Cainiao’s $95 million loss in 2015.

Critics have zeroed in on this selective disclosure. Alibaba consolidates some businesses it controls but not others. “We just don’t see how profitable or unprofitable that business is,” short seller Jim Chanos told CNBC about Cainiao.

The SEC’s other clear focus is how Alibaba reports data from Singles Day. Alibaba uses a metric called gross merchandise volume, the gross volume (in dollars) of products sold on Alibaba’s e-commerce platforms. Some researchers and analysts contend that a sizable portion of Alibaba’s GMV is fake, the result of small businesses on the platforms shipping empty packages to boost their rankings or other schemes that Alibaba then doesn’t correct for.

Last November Singles Day racked up $14.3 billion in GMV in just 24 hours. Alibaba reports GMV as a non-generally accepted accounting principal metric. Many tech companies use a similar metric with slightly different definitions. The accounting professor Gillis suspects the SEC is going after those types of disclosures.

“The SEC wants to crack down on non-GAAP metrics, and Alibaba might be one that gets targeted,” Gillis said in an email. He says it’s unlikely to be a big problem for Alibaba “unless they knew that the GMV was overstated.”

Whether the number has been overstated has been a focus of analysts. Anne Stevenson-Yang, co-founder of J Capital Research in China, told Fortune Alibaba’s GMV is overstated by a third for various reasons, including returned orders, fulfillment cost being included in the total, and outright fake purchases.

Alibaba has denied that GMV is overstated.

“We are voluntarily disclosing this SEC request for information and cooperating with the SEC and, through our legal counsel, have been providing the SEC with requested documents and information,” an Alibaba spokesperson said in a statement. “The SEC advised us that the initiation of a request for information should not be construed as an indication by the SEC or its staff that any violation of the federal securities laws has occurred.”

Chi Tsang, head of Internet research at HSBC in Hong Kong, says if Alibaba is found to violate accounting practices, it would have to move Cainiao onto its balance sheet and restate Singles Day GMV. “In our view, none of these actions would have a material impact on Alibaba’s financials,” he wrote today.

He estimates the impact of Cainiao’s losses last year amount to 0.5% of Alibaba’s net income, while Cainiao’s $160 million investments this year would comprise 9% of Alibaba’s capital expenditures last year.

Then again, the SEC’s investigation has just started, and more details could still emerge.