Audit committees looking to reduce their risk of restatement should probably consider engaging a Big 4 firm, but even among the Big 4 there are differences in how likely a given filing will lead to restatement.
Big 4 firms show lower rates of material restatements across capital markets compared with other firms, according the data below provided to Compliance Week by Audit Analytics based on a late January download as the firm prepares its annual restatement study. Material restatements are foretold in Item 4.02 of Form 8-K, where companies indicate they’ve found a mistake so serious investors should not rely on previously published financial statements while the company works on the restatement.
