March 18, 2013

Study: A 12-Year Comparison of Restatements

In a recent study, Audit Analytics looked back over 12 years of restatements and, among other things, found:

– In the last four years, the quantity of restatements has leveled off and severity has remained low, but restatements have increased from accelerated filers for the third straight year.
– Going back to 2007, there have been 4,806 companies that have found errors in their financial statements requiring they be restated and corrected
– During 2009, 153 accelerated filers disclosed restatements, followed by 158 in 2010; 202 in 2011 and 245 in 2012.
– During 2011, Revision Restatements (restatements revealed in a periodic report without a prior 8-K, Item 4.02 disclosure that past financials can no longer be relied upon) represented about 65% of the restatements disclosed by 10-K filers. This percentage represents the highest percentage calculated since the disclosure requirement came into effect August 2004.
– The average number of issues per restatement for 2011 was 1.38, the lowest during the twelve years under review.
– The average number of days restated (the restatement period) was 534 days during 2012, the fifth year in a row with a period above but near 500 days.

The Latest Iran Sanction Disclosure Developments

In this podcast, Abram Ellis of Simpson Thacher explains the latest developments relating to Iran sanctions and disclosure (see his earlier podcast on this topic too), including:

– What are we seeing so far for Section 13(r) Iran disclosures?
– In your earlier podcast – conducted before this reporting season – there were some questions about the “who, what, why and how” of the new rule – especially since there was some but not a lot of guidance from the SEC – have we learned anything more recently?
– Have you been surprised by the developments so far?
– Anything else we should talk about?

Mailed: January-February Issue of The Corporate Counsel

We mailed the January-February issue of The Corporate Counsel that includes pieces on:

– The Focus on Rule 10b5-1 Plans: What to Do Now
– New AS 16: The Impact of “Early Adoption” on the Audit Committee Report
– Iran Disclosures: More Guidance and Early Results
– What to Do With “Late” Shareholder Proposals?
– Political Contributions Disclosure: The Next Wave of Disclosure Lawsuits?
– Delaware Chancellor–“Malpractice for Most Issuers Not to Have a Shareholder Rights Plan in Place”
– Adding General Solicitation to Rule 506–Maybe Not as Simple as a (b) and (c)

Act Now: Get this issue rushed to when you try a 2013 No-Risk Trial today.

– Broc Romanek