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Financial restatements….is it only a matter of time?

May 6th, 2008 Comments off

While I have not had to go through the anxiety of a financial restatement at any of the companies I have worked with, I know a number of colleagues who have had to go through such an exercise and the subsequent fallout.  In my discussions with them, although some were legitimate system issues, most were the affect of human error and judgement calls. 

While most of the situations I have had the opportunity to discuss with colleagues have been relatively minor, and usually done collaboratively with the auditors, there was one at a public entity in which the majority of the executive team was replaced, interim appointments made, and it ultimately turned into a nasty public escapade. 

Is it enough to be initimately involved in all aspects of the business, to have a great relationship with the auditors, and to have a staff that you believe have the appropriate skillsets, along with a well-tested set of internal controls?  Or is it just a matter of time before every senior finance chief encounters this form in one respect or another?

The following article from CFO.com discusses this topic in more detail.
Read the full article at:  
http://www.cfo.com/article.cfm/11080109?f=alerts