Restatements held steady in 2011 with little change in the number of companies correcting errors in financial statements compared with the year before, according to the latest data from Audit Analytics.

A total of 787 companies filed restatements in 2011, down by only three from the 790 restatements filed in 2010. The number was only slightly lower in 2009 at 708, making it the valley year after a mid-2000s spike in restatement during the years following Sarbanes-Oxley adoption. Restatements peaked in 2006 at 1,790, then fell to 1,213 in 2007 and 922 in 2008.

Despite the leveling off for restatements broadly, Audit Analytics notes that companies listed on the New York Stock Exchange and over the counter registered notable increases in restatements in the past two years, says Don Whalen, director of research at the firm. “The over-the-counter increase is not a shock,” said Whalen. “It's the smaller companies that make mistakes.”

Among NYSE-listed companies, however, the firm spotted an increase in restatements from 65 in 2009 to 90 in 2010 and 108 in 2011.  Whalen said it's not clear from the data why NYSE-listed companies might have registered such an increase. The data suggests the restatements are only slightly concentrated in two sectors -- financial services and oil/gas -- and the reasons for the restatements are scattered across many different types of errors, he says.

The research suggests the severity of the restatements diminished in 2011, Whalen says. The firm measures the seriousness of the mistakes that lead to restatements according to some specific criteria related to income, the period of time corrected, and the number of issues identified in a restatement. The severity of restatements dropped according to every criterial analyzed, Whalen says. “The benefits of Sarbanes-Oxley appear to be leveling off around 700 restatements a year, so we'll see if that leveling continues,” he says.