Moreover, Dolan and his team suffer from dashed credibility as a result of repeated earnings restatements.
The company had been accused of accounting irregularities and confirmed restatements last night in management shake-up.
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Earnings restatements, auditor resignations, massive unexpected earnings misses, filing delays, fraud allegations etc are all automatic sells.
Based on some publicly available analyses, public restatements reached their peak in 2006 with more than 1200 restatements.
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Also in that announcement, they did not make any claims as to the magnitude of the potential restatements.
At the same time, recent press articles have suggested that restatements are on the rise at large public companies.
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Restatements for 2010 were a little more than a third of that amount.
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However, the overall number of restatements has remained relatively constant since 2009 after experiencing a dramatic drop following their 2006 peak.
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If there are no restatements and no private action lawsuits the SEC seems to be saying there was probably no accounting fraud.
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No accounting firm wants to be investigated or sued because of a financial misstatement, and restatements and investigations frequently result in a change in auditors.
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The revelations that sparked the crisis in October, about off-balance sheet partnerships, accounting restatements and an investigation by the Securities and Exchange Commission, were embarrassing, certainly.
Last year revisions (as opposed to formal restatements) accounted for 57% of 727 earnings fixes, up from 33% of 1, 384 fixes in 2005, Audit Analytics reports.
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Actions such as selling credit default swaps based on rotten loans, money laundering, interest rate manipulation, and excessive risk-taking can be as objectively determined as financial restatements.
All of this of course begs the question whether the number and type of restatements are really reflective of the incidence of fraud, as opposed to other variables.
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Yes, the actions that led to the financial crisis did not lead to restatements, far worse, they led to massive, and, in some cases, permanent , destruction of value.
For example, we learn in this book that the most common genre of philosophy works were translation and liberal restatements of Greek philosophers, especially Aristotle, Plato and Alexander of Aphrodisias.
Thus, while gross restatements may be up for a segment of public companies, the underlying quality of those restatements is suggestive of a further reduction in acknowledged accounting-related errors or transgressions.
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Better yet, Chief Executive Peter Dolan spoke on the conference call, after remaining almost silent as Bristol was savaged by clinical failures, plummeting sales and three years' worth of earnings restatements.
Now, there have also -- and I get questions usually about the other kinds of statements that seem to be torpedoing any potential for progress or seem to be restatements of ultimatums that would prevent any significant compromise.
Moreover, other data reviewed by Audit Analytics suggests that the severity of 2012 restatements, as measured by both the impact on net income and by the average number of issues per restatement, was generally less than in the period prior to 2008.
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Before Navistar was finished with all the restatements, SEC investigations, lawsuits, fines, clawbacks and disciplinary actions against their former CFO and current CEO, internal investigations, restructuring, and delisting and eventual re-listing on the New York Stock Exchange, the company admitted as much.
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In a statement to FORBES, SEC Enforcement Director Robert Khuzami argued that the task force was no longer needed because accounting expertise exists throughout the agency, and the number and severity of earnings restatements (a flag for possible accounting fraud) has declined dramatically since the mid-2000s.
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