Furthermore, we find that banks with greater amounts of non-interest income (NIITI--Positive Coefficient (0.4439)) were more likely to have restatements while banks with greater off balance sheet activity (OBTA--Negative Coefficient (-0.0770)) were less likely to have a restatement.
We expected a bank with more complex off-balance sheet activity to have more restatements. However, perhaps banks with greater OBTA are typically bigger banks and they may have better internal controls to reduce material misstatements.
Such members must place faith in the Restatement
's advisers and an ad hoc consultative group, surprisingly few members of which claim comprehensive expertise in liability insurance litigation, and which bodies have no veto power over the reporters who draft the rules.
Our research analyzed restatement data from the Audit and Compliance Module of Audit Analytics[R], a research database specializing in tracking detailed information of restatements.
Accounting Rule (GAAP/FASB) Application Failures This category refers to restatements because of accounting rule changes and unintentional errors that result in the misapplication of GAAP rules or provisions in Statements of Financial Accounting Standards (SFAS) promulgated by the Financial Accounting Standards Board (FASB).
Even if the latest opinions from courts important to your case relied on the Restatement
Second, it would be wise to review the Restatement
Third in case those courts update previous holdings.
As a reaction to public concern, the United States (US) Government Accounting Office (GAO) started following the escalating trends in financial restatements
. In 2002, the GAO reported the number of firms that announced restatements
resulting from accounting errors.
Last year, neighboring Ohio recognized this development and passed (https://www.legislature.ohio.gov/legislation/legislation-summary?id=GA132-SB-239) legislation rejecting the ALI's "Restatement
of the Law, Liability Insurance," becoming the first state to do so.
As stated in the ALI Style Manual, the Restatements
seek to set forth "clear formulations of common law...as it presently stands or might appropriately be stated by a court." However, given the unsettled nature of various insurance law issues in many jurisdictions, as well as competing rules adopted by different jurisdictions, the goal of setting forth "clear formulations of common law" is often more easily stated than accomplished.
Strict bank regulations might reduce concerns arising from financial restatements
if stakeholders believe these regulations prevent excessive risk-taking.
can damage the reputation of not only the management responsible for issuing the financial statements but also the company as a whole.
its earlier Restatements
, relatively little experience with