In June 2024, the Center for Audit Control (the “CAQ”) released its report entitled “Financial Restatement Trends in the United States: 2013 – 2022,” announcing the findings from its study examining trends and characteristics of public company restatement events that took place between January 1, 2013 and December 31, 2022.  For purposes of the study, “restatements” are defined as corrections of errors in public company financial statements filed with the U.S. Securities and Exchange Commission (“SEC”).  The population of restatements can be divided into two kinds: (1) “Big R” restatements, which involve restatements of previously filed financial statements that have been deemed unreliable by the company or its auditors and are subject to mandatory disclosure under Item 4.02 of Form 8-K; and (2) “little r” restatements, which involve restatements to correct immaterial errors to prior period financial statements that, if uncorrected, would cause the current period financial statements to be materially misstated.  Of the 5,793 restatements identified by CAQ from 2013 to 2022, 1,352 were “Big R” restatements and 4,441 were “little r” restatements.

Read more about the key findings from the CAQ’s study.