 |
||||||
| Tuesday, February 9, 2010 |
Contact Us
|
 RSS
|
|||||
|
|
| |
|||
|
||||||
|
||||||
|
|
ANALYSIS
March 2, 2009
Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
March 2, 2009
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
March 2, 2009
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
March 2, 2009
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
|
|
|
|
April 9, 2008 2:50 PM ET
It’s no secret that the number of financial restatements has skyrocketed in the last 10 years. But according to a study commissioned by the Treasury Department, the dramatic increase in restatements is mostly being driven by companies that are not listed on the major stock exchanges. The explosion in restatements commenced in 2001. According to the author of the study, University of Kansas professor Sue Scholz, there were over 400 restatements filed that year, compared with 90 in 1997. Ms. Scholz attributes the jump to the dotcom bubble bursting in early 2000—and not the accounting scandals that began surfacing in 2001. Restatements increased steadily in the Sarbanes-Oxley era. By 2006, the number of restatements filed by companies had risen to 1,577. Only about 37% of the 2006 restatements were from exchange-listed companies. In the two years before that, restatements from exchange-listed companies comprised about half of the overall total. The study looked at 6,633 restatements from 1997 through 2006. It did not analyze restatements that were deemed to be compliant with generally accepted accounting principles, such as a change from one acceptable accounting standard to another. Ms. Scholz found fraud-driven restatements to be on the decline. Fraud was a factor in just 2% of restatements in 2006, down from 29% in 1997. The problems that triggered restatements tend to fall into two categories, Ms. Scholz found. Restatements by larger companies often involved fraud, revenue recognition of assets and such complex accounting issues as derivatives and foreign subsidiaries. Restatements at smaller companies mostly reflected problems with ongoing operating expenses, stock-based compensation and debt. During the 10-year period examined, manufacturers filed the most restatements, with nearly 1,400 restatements. Technology companies, bedeviled by revenue recognition issues, had the second highest number, at 668, closely followed by the financial sector with 617. The White House commissioned the study last year in its effort to streamline regulations and accounting standards. The report is likely to be considered by a panel formed by the Treasury to examine the sustainability of the auditing profession, which may suggest changes to auditor liability. The study also is likely to be referenced by another panel formed by the Securities and Exchange Commission, which has been considering ways to simplify accounting standards and reduce restatements. In many cases, market participants don’t seem to regard restatements as a big deal, and the Treasury study reflects that. So, too, does a report released yesterday by PricewaterhouseCoopers, which found the number of restatements associated with federal securities class-action lawsuits is relatively small. Last year, only 29 restatements were associated with such cases, compared with 47 in 2006. The PWC study also found that accounting-related lawsuits have fallen, dropping from 60% of all federal securities class actions in 2006 to 50% in 2007. That’s the lowest percentage since 1997. For more on what’s driving restatements, see “Blame For Restatements May Need A Rethinking.”
|
|
|
|
Latest News
• Reversal? Stanford advisers sue the SEC
March 5, 10:52 AM EST
• Third of companies not complying with new tax reporting rule
March 4, 4:25 PM EST
• Regulators aware of problems at First National for six years: audit
March 4, 3:31 PM EST
• Influential advisory group to look at fair-value, off-balance sheet accounting
March 4, 4:16 PM EST
• In a first, NY State hopes to sell bankrupt insurer
March 4, 3:59 PM EST
CRAIN'S BENEFITS OUTLOOK 2009
SPECIAL REPORT
MOST POPULAR
|
MORE ANALYSIS
Crain Financial Group:
InvestmentNews |
Pensions & Investments |
Workforce Management
Copyright ©2010 Crain Communications Inc
All rights reserved.
Privacy Policy |
Terms & Conditions