Whether driven by the increasing complexity of accounting standards, the dynamic regulatory environment or changing business activities, companies are facing an increased risk of financial reporting restatements. Companies undergoing a restatement quickly realize that resolving the accounting complexity is only the first step in the process. The complexity of managing expectations and communicating with various stakeholders including the Board of Directors, auditors, regulators, shareholders and others can prove to be challenging and time consuming.
When working through a restatement, management is challenged to react quickly to problem areas they may or may not be prepared to handle while continuing to perform their "day-to-day" responsibilities. Often the trigger to a restatement is only the tip of the iceberg and companies may quickly find themselves facing potential delinquency on current reporting requirements while trying to detect and correct past errors.
Impacts to companies:
What companies should do:
To the extent restatement or similar issues arise, consider involving an experienced adviser, such as PwC to provide: