2004 Annual Review of Financial Reporting Matters - Huron ...

More documents

Recommendations

Info

Restatements of Annual Audited Financial Statements While investors rely on both the quarterly and annual financial statements issued by public companies, auditors assume different levels of responsibility and follow different procedures depending on the type of statement being reviewed. For example, because auditors are required to render an audit opinion on annual financials, these statements are subject to a higher level of review than quarterly financials, which do not require an audit opinion. In 2004, the number of filings involving restated annual audited financial statements rose to a record high of 253, representing 61 percent of the total restatements filed during the year. This compares to 64 percent in 2003, 55 percent in 2002, 52 percent in 2001 and 42 percent in 2000. Trends in Restated Annual Audited Financial Statements Restatements Involving Annual Audited Financial Statements Amended filings involving annual audited financial statements 414 Amended filings involving quarterly financial statements only Number of Restatements 323 253 330 206 233 270 183 135 140 130 147 161 117 98 2000 2001 2002 2003 2004 As described earlier, the number of amended filings involving annual audited financial statements rose in 2004 to 253. Huron also tallied the gross number of restated annual financial statements included in these filings and observed a similar trend with 508 restated audited annual periods being included in the 253 filings. Growth in Restating Multiple Years Huron's report also uncovered a rising trend in the number of periods contained in each restatement. For the fifth consecutive year, the number of filers reporting errors in at least three of the prior annual periods rose to nearly 40 percent of the 10-K/A filings. Trends in Restated Annual Audited Financial Statements 395 312 228 159 508 Multiple period restatements point to recurring flaws in accounting policies, practices, and errors, as opposed to one-time errors. 2000 2001 2002 2003 2004 6 | 2004 Annual Review of Financial Reporting Matters
Restatements by Company Size Restatements by companies with less than $100 million of revenue accounted for 39 percent of restatements in 2004, down from 49 percent in 2003. In 2004, companies with more than $1 billion in revenue accounted for 19 percent of restatements, down slightly from 20 percent in 2003. On average, over the past five years, nearly 75 percent of all financial restatements were reported by companies with annual revenues of less than $500 million. Company Size (2004) Greater than $1 billion: 19% Under $100 million: 39% $500-$999 million: 10% $250-$499 million: 15% $100 - $249 million: 17% Huron Consulting Group | 7
Page 1 and 2: 2004 Annual Review of Financial Rep
Page 3 and 4: Introduction: Facts about the Datab
Page 5: Major Accounting Issues Revenue Rec
Page 9 and 10: Figure 1: Budget Authority FY 1997
Page 11 and 12: Clearly, an audit performed under e
Page 13 and 14: Congratulations to the Class of 200
Page 15 and 16: Defining the "F" in CFO - is it for
Page 17 and 18: Industry Analysis Consistent with p
Page 19 and 20: Finance, Insurance, and Real Estate
Page 21 and 22: Software Industry Restatements by Y
Page 23 and 24: Proven wisdom and experience that h

2004 Annual Review of Financial Reporting Matters - Huron ...

Create successful ePaper yourself

Delete template?

Save as template?