Ideagen/Audit Analytics recently released its annual study of financial restatements. The study provides data on restatements from 2005 through 2024, and the topics addressed include the number of Big R & Little r restatements, the average length of the restatement period, the impact of restatements on previously reported income, and a breakdown of restatements by industry. This excerpt discusses the filer status of companies that restated results:

Non-accelerated filers continue to disclose the most restatements of any filer status. In 2021, the number of non accelerated filer restatements increased by 451% to a total of 1,136 restatements, primarily due to SPAC restatements. This was the largest amount seen for any filer status group over the 20-year period. Although restatements have generally returned to pre-2021 levels, non-accelerated filer restatements still constituted the largest percentage of all restatements during 2024 at 45%.

Despite still having of the largest percentage, non-accelerated filers achieved the lowest percentage of total restatements since 2019 and the second lowest figure over the 20-year period. In 2024, 100 restatements came from these smaller companies, down from 243 restatements for non-accelerated filers in 2023.

Accelerated filers have seen the lowest restatement rates for the past 12 years, constituting between 5% and 31% of restatements annually. After reaching a historic low of 5% in 2021, the percentage of restatements filed by accelerated filers increased to 20% in 2024, aligned with the overall average for accelerated filers across the period. The total number of accelerated filer restatements reached an all-time low of 44 in 2024, decreasing from 63 restatements in 2023.

The percentage and total number of restatements filed by large accelerated filers have continued to exceed those of accelerated filers since 2012. In 2019, 35% of restatements were filed by large accelerated filers, the most seen over the 20-year period. In 2024, the percentage of large accelerated filer restatements increased significantly from 20% in 2023 to 35%, despite only a slight increase in the total number of restatements from 75 to 78.

The study found that total restatements increased by approximately 10%, from 434 in 2023 to 479 in 2024, and that the majority of the increase is attributable to restatements by former BF Borgers clients, who were associated with 41 restatements disclosed last year.

– John Jenkins