Restatements Decline

An announcement that a company plans to restate its financial results is often considered an alert to investors that fraudulent conduct may be to blame and frequently causes a significant decline in the company's share price.  Amidst economic crisis, the number of restatements peaked in 2006.  However, as reported by CFO.com, the number and severity of financial restatements fell in 2009 for the third year in a row, according to a new Audit Analytics report. The report attributes the decline in restatements to improved internal controls as a result of the Sarbanes Oxley Act and a 2008 recommendation by the SEC's Advisory Committee on Improvements to Financial Reporting that the agency relax its requirements on what types of errors should trigger restatements.  To read the full article, click here.