The Institute (made up of over 4300 lawyers, judges, and law professors of the highest qualifications) drafts, discusses, revises, and publishes Restatements
of the Law, model statutes, and principles of law that are enormously influential in the courts and legislatures, as well as in legal scholarship and education.
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.
During 2009, 65 NYSE companies disclosed restatements
, followed by 90 in 2010, and 108 in 2011.
Meyerson took a darker view, grouping restatements
into three categories: "honest error," "aggressive corporate mentality" or "intentional deception.
38 percent of the 919 announced restatements
between 1997 and June 30, 2002 involved revenue recognition issues;
The Company noted that final results for the first and second quarter are dependent upon finalization of potential restatements
from the ongoing review discussed below.
Management estimates that the cumulative effects of the restatements
significantly increase retained earnings as of September 30, 2006.
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.
Clarification of the requirements for CPAs to report client financial statement restatements
to the CBA.