announcements, companies typically file restatements
by amending their previously issued financial statements for the periods affected (known as "Big R" restatements
Thus, we focus on surveying post-SOX company restatements
and provide analyses regarding their consequences by investigating specific restatement
characteristics and management behavior.
publicly listed companies are restating financial filings more often, but the reasons for restatements
have shifted from fraud and revenue to regulatory and accounting issues in recent years.
8 percent, restatement
announcements identified grew about 67 percent over this period.
Revenue "mis-recognition" is the leading cause of restatement
, and the rate of restatements
has been soaring.
Despite such difficulty, certain general principles have evolved in numerous cases applying the restatement
The largest financial restatement
for each of the last three years was disclosed by a foreign registrant.
The number of restatements
has declined significantly since its peak in 2006, the number of accounting issues underlying each restatement
reported has also decreased, and the percent age of restatements
involving revenue recognition has leveled off to 10% of restatement
volume for the last several years.
Cheney writes that shareholders "can't help but wonder whether the restatement
is a case of accounting confusion or shenanigans.
Regulations concerning audit documentation, financial statement restatement
reporting and non-CPA ownership recently passed by the CBA will take effect once approved by the Office of Administrative Law.
Specifically, the report explores the number of, reasons for and other trends in financial statement restatements
since 1997; analyzes the impact of restatement
announcements on the restating companies' stock market capitalization; identifies available data to determine the impact of financial statement restatements
on investors' confidence in the existing U.
The court analyzed this claim under Restatement
(second) of Torts, section 552.
was initiated due to an accounting matter related to the Company's historical treatment of certain inventory related costs.
Therefore, not only does the incentive exist for companies to do their best to reduce the transparency or limit the disclosure prominence of restatements
, but it is even greater if the restatement
involves a core operating account.
It explained that such a restatement
could reduce its earnings by seven to eight cents a share--more than the company had previously forecast--which could cause it to default on its credit agreement.