{"id":1455,"date":"2019-02-07T09:56:37","date_gmt":"2019-02-07T14:56:37","guid":{"rendered":"https:\/\/seci.wpenginepowered.com\/?p=1455"},"modified":"2019-02-07T09:56:37","modified_gmt":"2019-02-07T14:56:37","slug":"one-last-year-end-check-frequent-problem-and-restatement-areas","status":"publish","type":"post","link":"https:\/\/seciblog.pli.edu\/index.php\/one-last-year-end-check-frequent-problem-and-restatement-areas\/","title":{"rendered":"One Last Year-End Check \u2013 Frequent Problem and Restatement Areas"},"content":{"rendered":"

At this point in the year-end process most of us have numbers in place and are working on the final steps in reporting.\u00a0 As you move toward final reviews, we share with you Audit Analytics\u2019 list of high-risk financial reporting areas that can hopefully help you avoid reporting problems.<\/p>\n

For the last 17 years Audit Analytics<\/a>has done an exhaustive review of public company restatements.\u00a0 Their report \u201c2017 Financial Restatements \u2013 A Seventeen Year Comparison\u201d has an amazing wealth of information about numbers of restatements, types of restatements and trends over time.<\/p>\n

For purposes of this post, the most meaningful information is the list of underlying areas that were involved in the 553 restatements made in 2017.\u00a0 These are the areas that clearly present the highest risks of misstatement in financial reporting, and warrant a bit of extra review before issuance of financial statements.<\/p>\n

Here are the top ten items on Audit Analytics\u2019 list for 2017:<\/p>\n

Number and Percentage of
\nArea<\/u>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0Restatements<\/u><\/p>\n

Debt, Quasi debt, Warrants & Equity (BCF) Security Issues\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 87\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 15.7%
\nRevenue Recognition Issues \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 77\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 13.9%
\nTax Expense\/Benefit\/Deferral\/Other Issues \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 77\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 13.9%
\nCash Flow Statement Classification Errors \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 72\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 13.0%
\nLiabilities, Payables, Reserves and Accrual Estimate Failures \u00a0 \u00a0 \u00a0 \u00a0 63\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 11.4%
\nExpense (payroll, SGA, other) Recording Issues \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 59\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 10.7%
\nForeign, Related Party, Affiliated or Subsidiary Issues \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a053\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0 9.6%
\nAccounts\/loans Receivable, Investments & Cash Issues \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a047\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0 8.5%
\nAcquisitions, Mergers, Disposals, re-org Acct Issues \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 45\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a08.1%
\nDeferred, Stock-based and\/or Executive Comp Issues \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 40\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0 7.2%<\/p>\n

 <\/p>\n

Note, the list goes on to include 14 other causes of restatements, but we are focusing on the top 10 here as the highest risk areas.<\/p>\n

If you made tough calls in any of these areas, here is a reminder to be sure all the i\u2019s are dotted, and t\u2019s are crossed.\u00a0 Hope this helps!<\/p>\n

As always, your thoughts and comments are welcome!<\/p>\n","protected":false},"excerpt":{"rendered":"

At this point in the year-end process most of us have numbers in place and are working on the final steps in reporting.\u00a0 As you move toward final reviews, we share with you Audit Analytics\u2019 list of high-risk financial reporting areas that can hopefully help you avoid reporting problems. For the last 17 years Audit … Continue reading One Last Year-End Check \u2013 Frequent Problem and Restatement Areas<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false},"categories":[242],"tags":[],"coauthors":[154],"class_list":["post-1455","post","type-post","status-publish","format-standard","hentry","category-reporting"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts\/1455","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/comments?post=1455"}],"version-history":[{"count":0,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts\/1455\/revisions"}],"wp:attachment":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/media?parent=1455"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/categories?post=1455"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/tags?post=1455"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/coauthors?post=1455"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}