Tag: financial restatements

Audit Analytics reviews financial restatements in 2017

Audit Analytics has published its annual review of financial restatements, which this year covered a 17-year period. The review showed a double-digit percentage decline in the total number of restatements for the last three years in a row, resulting in a new 17-year low of 553 total restatements. Compare that to 1,859 restatements in 2006!  As discussed in this article in Compliance Week, the percentage decline was 19% in 2017, 10% in 2016 and almost 12% in 2015. Stepping back, what the data shows is that, following SOX, the number of restatements skyrocketed, as the new act imposed “new discipline to the financial reporting process through its requirement to report on the effectiveness of internal control over financial reporting.” But by 2007, companies seemed to have gained a better handle on the demands of SOX, as the numbers of restatements began to decline. 

Will clawbacks have an unintended consequence?

by Cydney Posner A recent  study, “Why Do Restatements Decrease in a Clawback Environment? An Investigation into Financial Reporting Executives’ Decision-Making during the Restatement Process,” shows that clawbacks may have unintended consequences.  The study, conducted by an academic at Miami University of Ohio and published in The Accounting Review, showed […]