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GAO-03-395R 1 (2003-01-17)

handle is hein.gao/gaobaamdj0001 and id is 1 raw text is: £ Accountability * Integrity * Reliability United States General Accounting Office Washington, DC 20548 January 17, 2003 The Honorable Paul S. Sarbanes Ranking Minority Member Committee on Banking, Housing, and Urban Affairs United States Senate Subject: Financial Statement Restatement Database On October 4, 2002, we issued a report to you entitled Financial Statement Restatements: Trends, Market Impacts, Regulatory Responses, and Remaining Challenges (Washington, D.C.: GAO-03-138). That report included a listing of 919 restatements we identified as having been made because of accounting irregularities between January 1, 1997, and June 30, 2002. Since its release, the report has drawn considerable attention from academics and other researchers, and we have received numerous requests for additional data about these restatements. As a result, and with the agreement of your office, we are releasing our database of information collected from public sources on the 919 restatements. We encourage researchers and the public to consider our objectives, scope, and methodology (enclosure I) and engage in their own analyses of the data contained in our restatements database (enclosure II). In addition to providing the name of each company associated with a restatement announcement, we are including the company's stock ticker symbol, the market on which the stock was trading at the time of the announcement, the date of the announcement, the entity that prompted the restatement, and the reason(s) for the restatement. We are not releasing stock price or market capitalization data, since we obtained this information from proprietary sources, but we are including the number of shares outstanding for each company. As we stated in our October report, certain of these items, such as the entity that prompted the restatement and the reason for the restatement, are subject to interpretation, and other researchers may categorize certain restatements differently. The database we are releasing today is an updated version of the one we used for the original report. It has been a work-in-progress, and we have further refined it as we have obtained additional details. In particular, we uncovered new information for many of the 919 cases, including details about initial announcement dates and the reasons for the restatements. We performed analyses with the new information and determined that the new data resulted in only minor changes to the effects and trends we had initially reported. Incorporating the additional information, we found that the unadjusted and market-adjusted immediate losses in the market capitalization of restating companies approximated $100 billion and $96 GAO-03-395R Financial Statement Restatement Database

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