Restatements

Written for an encyclopedia on European private law, this brief article first addresses the term restatements and then compares the U.S. Restatement of the law as prototype with different European restatements of the law in the area of private law

Some Reasons Courts Have Become Active Participants in the Search for Ultimate Moral and Political Truth

This short essay was prompted by the increasing delegation to courts of the responsibility for deciding what are basically moral questions, such as in litigation involving human rights conventions, as well as the responsibility for deciding basic issues of social policy with at best only the most general guidelines to guide their exercise of judicial discretion. The essay discusses some of the reasons for this delegation of authority and briefly describes how courts have struggled to meet this obligation without transcending accepted notions governing the limits of judicial discretion

The Oligopolistic Gatekeeper: The U.S. Accounting Profession

The accounting and financial scandals the last few years not only produced the Sarbanes-Oxley Act, but have prompted a good deal of debate what forces led to so many dramatic reporting failures. This article is the only work to examine how the competitive structure of the accounting industry contributed to its movement from being a profession to a business that performed auditing. In the article we find not only documentation that the accounting profession is an oligopoly but a sound explanation of how its poor structure contributes significantly to negative social welfare. Throughout the article provides rich support of data to support explanations of the forces that have impacted the accounting profession as well as financial reporting. Most importantly, the article connects how the accounting profession\u27s poor competitive structure likely contributed to the financial and accounting scandals of 2001 and 2002 by making it possible for the mangers of their audit clients to trade off better audits for consulting services. The article also provides insight into weaknesses that continue even after reforms such as those introduced by Sarbanes-Oxley. Several steps to strengthen the accounting industry so that it can return to being a zealous gatekeeper are also proposed in the article

An Effectiveness Review of Section 404 of the Sarbanes Oxley Act (2002)

The accounting scandals that occurred in the early 2000s launched the current day regulations set fourth in the Sarbanes Oxley Act. The Sarbanes Oxley Act is comprised of several titles, all aimed to help eliminate financial accounting errors and the potential of fraud. Within this piece of legislation, there is one section that has created a lot of discussion. Section 404, which discusses the way in which disclosures of internal control deficiencies are handled, is the topic of this paper. In addition to a literature review of a research paper written by Sarah Rice and David Weber, this paper will look at different elements to see if this section of the Sarbanes Oxley Act has changed the regulatory environment. Through comparative studies, this paper is aimed to see if the legislation created to stop these financial scandals from happening, was successful and effective

Analisis Mekanisme Corporate Governance Terhadap Probabilitas Terjadinya Earnings Restatement

This paper seeks to examine the impacts of corporate governance on earnings restatement are indicated as a form of financial reporting failures on non-financial listed companies in Indonesia, with a view to providing reference to strengthen the corporate governance and improve the quality of financial information. Data for this paper were obtained from the annual reports of non-financial listed companies from the period of 2004 to 2010 with a total population of 2.146, which includes 34 restatements especially earnings restatement by 34 companies. A control sample comprising non-restating companies is formed using match-pair procedures where restated and non-restated companies are matched by fiscal year, industry sector, and company size. Logistic regression model was used to measure the restatements dummy variables. Moreover, dummy variables are also used not only on the composition of the board and the concentration of ownership, but also the quality of the independent auditor. Earnings restatement on this paper focused on accounting misstatements and changes in accounting policies. The results show that occurence of restatements especially earnings restatement can be prevented by strong internal governance, such as the proportion of independent directors and the ownership of large shareholders are higher. They have better control than others to monitoring and finding acts of fraud committed by management quickly and accurately. Surprisingly, the independence of the audit committee actually found a positive but not significant effect on the likelihood of higher restatements. The audit that have done by Big 4 found a negative but not significant effect on the likelihood of restatements is lower. While the government ownership found a positive but not significant effect on high possibility of restatements

RESTATEMENTS AND ADJUSTEMNTS IN ELABORATION OF CONSOLIDATED FINANCIAL STATEMENTS

This paper deals interdisciplinary with issues related to accounting‘s groups ofcompanies, offering solutions or answers to immediate problems of accounting practice, andpropose viable theoretical generalizations at least concerning the ongoing development of theparticipating entities on consolidation. Thus, the accountant will be able to verify the correctelaboration of the consolidated financial statements taking into account the profit accrued tothird party.consolidated financial statements, accounting, accounting restatements, minor interests

Trends in Reasons for Restatements

Business/Education/Speech and Hearing Science (The Ohio State University Denman Undergraduate Research Forum)In 2014, more than 500 companies or over 3% of all public companies filed a Form 8-K Item 4.02 disclosure indicating that a previously issued financial statement should not be relied upon due to a material error. These material errors mislead investors, creditors, and other stakeholders. Therefore, such a company is subsequently required to issue corrected financial statements through a Form 10-K/A disclosure. By understanding the underlying errors that drive companies to restate, accountants can take actions to minimize the quantity of restatements. Previous research has examined the relationship between the passage of time and the number of restatements. This study adds to the discussion by describing reasons that companies restate and the associated trends. Audit Analytics database provided by Wharton Research Data Services was used to analyze all Item 4.02 disclosures from 2004 to 2014. These restatements were classified by whether clerical error, fraud, accounting error, or another type of error led the company to restate their financials. The results indicate that the proportion of restatements explained by clerical errors has fallen from over 14% in 2008 to about 1% in 2014. The proportion of restatements explained by fraud has fallen from over 3% in 2004 to under 1% in 2014. As a result, the proportion of restatements explained by accounting errors has increased from about 86% in 2008 to over 98% in 2014. These results are consistent with the presumption that increased regulation, technology, and education may reduce fraud and clerical error over time. The total number of restatements has more than doubled since 2008 despite evident decreases in the proportion of restatements explained by clerical error and fraud. As the proportion of restatements explained by accounting errors predominates, actions must be taken to reduce accounting error and consequently diminish the total number of restatements.Academic Major: Accountin

Ratification: Useful But Uneven

Ratification permits a principal to determine to be bound by the legal consequences of action taken by an agent after the fact of the agent’s conduct when the principal would otherwise not be bound. By ratifying a principal may clarify the effects of uncertainty, furnishing reassurance to the agent, the third party with whom the agent dealt, and other parties interested in the status of the transaction. However, at the point the principal decides whether to ratify, the principal knows facts not known to agent and third party at the time of the agent’s unauthorised transaction, in particular subsequent developments in the market. The principal thus may be tempted to speculate at the expense of the third party, ratifying if the transaction seems then favorable to the principal and, if not, relying on the agent’s lack of authority. This article is a comparative analysis of ratification doctrine within the systems covered by The Unauthorized Agent. Ratification doctrine is variable among these systems and, even within single systems, difficult to rationalize. The article argues that these doctrinal characteristics reflect tensions between two competing principles that underlie ratification—the necessity for the principal’s consent and considerations of fairness to third parties—leading to variations in doctrinal specifics. Ratification’s unevenness also reflects the complexity of consent within agency doctrine; system-by-system variations also stem from differences in the significance of ratification and the contexts in which the doctrine matters