Moreover, the SEC may initiate a formal investigation into a potential restatement
or fraud case; such a decision depends upon factors such as availability of resources, potential discoveries of misstatements, company-specific characteristics, and the potential relevance of the investigation on emerging accounting and financial reporting matters in the capital markets.
Additionally, are restatement
characteristics really important when companies decide to fire executives?
According to the study, restatements
grew from 90 in 1997 to I,5777 in 2006, accelerating by 380 percent in 200I, the year before Sarbanes-Oxley was enacted.
Most earnings restatements
happen because people just screw up, unintentionally," Sehringer says.
The major difference between the near-privity rule and the restatement
rule is that the latter does not require the practitioner to know the identity of specific parties, only that they be members of a limited group known to the practitioner.
Specifically, the number of restatement
announcements peaked at 1,784 in 2006, soon after implementation of SOX section 404 on internal control reporting, and they subsequently declined rapidly.
Should Be Eyed Suspiciously," read the headline of an item by Bruce Meyerson, national business writer for The Associated Press, earlier this year.
of a financial statement by the audit client;
Accordingly, the court held that the firm owed a duty to SRC's public investors to refrain from negligent misrepresentations under Restatement
(second) of Torts, section 552.
If certain types of restatements
(that involve more important operational accounts, such as sales) are more likely to lead to future prosecution by the SEC or a private party, then corporations contemplating reporting a similar restatement
in a stealthy manner may be less inclined to do so and might, instead, disclose the restatement
in a more transparent manner.
The year 2003 had marked the first time that that restatement
filings had leveled off, after an upward trend over the past five years, but they jumped up again in 2004.
Charitable organization registered by the office of the attorney general in which the restatement
has resulted in an amended or superceding IRS Form 990 or 990PF.