Audit Analytics has published its
annual review of financial restatements, which this year
covered a 17-year period. The review showed a double-digit
percentage decline in the total number of restatements for the last
three years in a row, resulting in a new 17-year low of 553 total
restatements. Compare that to 1,859 restatements in 2006! As
discussed in
this article in Compliance Week, the percentage
decline was 19% in 2017, 10% in 2016 and almost 12% in 2015.
Stepping back, what the data shows is that, following SOX, the
number of restatements skyrocketed, as the new act imposed
"new discipline to the financial reporting process through its
requirement to report on the effectiveness of internal control over
financial reporting." But by 2007, companies seemed to have
gained a better handle on the demands of SOX, as the numbers of
restatements began to decline.
