Restatements continue to decline

More decent news on the restatement front: In 2009, restatements fell to 674 from 923 in 2998, according to media reports about a new study from Audit Analytics. That's the third straight year of restatement declines.

The main reasons for restatements are not surprising. Debt warrants and stock-related issues accounted for 18 percent. Expense recording issues accounted for 15 percent. Accounts/loans receivable, investments and cash issues accounted for 12 percent. In previous years, we've attributed the decline to Sarbanes-Oxley (Sarbanes-Oxley news). The majority of restatements come from non-accelerated filers. Restatements by this group of companies accounted for 374 of the 522 restatements in 2009. There is still plenty of improvement for this group, and the debate over the section 404(b) reprieve will not be settled anytime soon.

A November study also by Audit Analytics found that companies that have not yet had auditors review internal-controls reports (internal audits news), mainly small companies, have a restatement rate that is 46 percent higher than larger companies. As we head toward a possible permanent exemption, we'll hear plenty more about this. 

For more:
- here's a cfo.com article

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