02 be filed by a reporting company to announce restatements
if the company or its auditor concludes that "any previously issued financial statements .
First, prior literature on the likelihood of managerial turnover after restatements
has been mixed (Beneish 1999; Jayaramnan et al.
The report notes that increased restatements
beginning in 2003 could be attributed to the implementation of internal control reporting under Sarbanes-Oxley Section 404.
Most earnings restatements
happen because people just screw up, unintentionally," Sehringer says.
According to the survey, the leading causes for the restatements
were revenue recognition; equity accounting; and reserves, accruals and contingencies.
Among the numerous studies on restatements
, one of the most comprehensive over the 10-year period from 2003 (the first full year in which SOX was in effect) through 2012 was conducted by Professor Susan Scholz of the University of Kansas on behalf of the Center for Audit Quality (CAQ) (http://bit.
Meyerson took a darker view, grouping restatements
into three categories: "honest error," "aggressive corporate mentality" or "intentional deception.
5063 requires client financial statement restatements
to be reported to the CBA within 30 days of issuance.
Due to the major accounting scandals of the early 2000s and the resulting increased emphasis on financial information transparency, the issue of restatements
and the quality of financial information provided by companies has been in both the public and regulatory spotlight for the past decade.
are in the news again, and it's no surprise that restated earnings often result in a serious blow to a company's stock price.
The California Board of Accountancy's Reform Statutes Implementation Task Force has drafted proposed regulations related to audit documentation and retention; the reporting of financial statement restatements
, settlements arbitration awards and judgments; and work done by non-CPA owners of firms.
An examination of the types of accounting restatements
triggered by PCAOB small firm inspections can highlight important issues for small audit firms and their issuer clients to consider.