Financial restatements force companies to throw a lot of assumptions and supposedly reliable numbers out the window. Now an increasing number of executives at restating companies are going out that way, too.
A Compliance Week analysis of executive and auditor turnover for 2005 and 2006—the first two years companies have had to disclose such departures in formal filings—shows that the number of companies experiencing executive or auditor turnover in the wake of a restatement is rising markedly. More chief executives and chief financial officers are getting fired, resigning, or otherwise leaving their jobs after a restatement, and more auditors are getting dismissed.
