When looking at restatements, we categorize them by two levels: Reissuance Restatements and Revision Restatements. Reissuance Restatements (“Big R”) address a material error that calls for the reissuance of a past financial statement. Alternatively, Revision Restatements (“little r”) deal with immaterial misstatements, or adjustments made in the normal course of business.
This article reviews the results of Audit Analytics’ annual restatements trends report, including trends charted year over year. The full report provides a detailed analysis and comparison of trends in financial restatements over a sixteen-year period. As summed up by the Wall Street Journal, 2016 saw an “all time low” in restatements. We are seeing fewer restatements, and those restatements that we do see often do not lack severity or material weakness.