In response to requests from journalists and policy makers regarding the Adler Amendment to the Investor Protection Act of 2009, Audit Analytics has drafted a report which reviews restatements filed by SOX 404 filers. This report has been cited in several recent articles including one from Compliance Week and another from CFO.com.

The analysis divides filers into two groups: (1) Those that filed an auditor attestation and (2) those that filed a "management-only" report. These two groups of filers were then further separated according to whether they had disclosed effective Internal Controls over Financial Reporting (ICFRs), ineffective ICFRs or had not disclosed their ICFR status.

Some interesting findings in the briefing include:

• The rate of restatements filed either 90 days before or at any point after a disclosure of effective ICFRs was 46% higher among companies that filed management-only reports as compared to those that filed auditor attestations.
• When an auditor is involved in a company's ICFRs assessment and there is a subsequent financial restatement, the disclosure that past financials cannot be relied upon is given to the public more promptly.

For more information please download the report. As always, feel free to contact us with comments and suggestions.