Restatements among accelerated filers rose for a third year in 2013, with 290 such companies disclosing a need to restate financial statements, although the average dollars-and-cents impact hit an all-time low in the same year.
A total of 846 companies filed restatements in 2013, relatively steady from 838 restatements in 2012 and 844 in 2011. Among accelerated filers, the number of restatements inched upward to 290, an increase of nearly 3 percent over the 2012 restatement level. In 2011, 201 accelerated filers corrected their financial statements with a restatement, a considerable jump from the 157 restatements in 2010, according to the data from research firm Audit Analytics.
The firm's analysis shows the average income adjustment among all publicly traded companies on major exchanges (NYSE, NASDAQ or Amex), was $3.2 million, the lowest figure in the seven years Audit Analytics has been tracking that figure. The average restatement took a $5.8 percent bite out of earnings in 2012, and $12.9 million in 2011. The data shows more than half of all 2013 restatements, 235 out of a total of 445, involved no impact on earnings. The trend is similar to 2012, where more big companies filed restatements, but on smaller issues.
Nearly 70 percent of restatements among all public companies were presented to investors in a regular periodic report without prior warning via a Form 8-K that earlier financial could not be relied upon. That's the highest percentage ever recorded since the 8-K requirement took effect in 2004, says Audit Analytics.
Only one-third of restatements in 2005 were filed without a prior declaration that earlier financial statements were unreliable, but that percentage has grown steadily since to 57 percent in 2011 and 65 percent in 2012. The absence of an 8-K preceding a restatement suggests the company did not deem the correction to be so significant that it would render prior financials unreliable, Audit Analytics says.
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