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Auditing

Taxation

2008

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Full-Text Articles in Business

An Analysis Of Restatements Due To Errors And Auditor Changes By Fortune 500 Companies, James H. Thompson, Timothy L. Mccoy Jan 2008

An Analysis Of Restatements Due To Errors And Auditor Changes By Fortune 500 Companies, James H. Thompson, Timothy L. Mccoy

All Faculty Scholarship for the College of Business

Events leading to the breakup of Arthur Anderson and Co. included the failure of Enron and other evidence of financial reporting irregularities. Many of these irregularities involved restatement of financial statements due to error. During the last several years, numerous articles in the accounting literature and accounting press have chronicled such restatements and the often associated change in auditor. This paper analyzes restatements due to error and auditor changes made by Fortune 500 companies during 2001 and 2002 in order to assess whether restatements due to error lowered or raised income and whether companies with income-decreasing errors showed a greater …