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Reading Financial Reports For Dummies, 4th Edition
book

Reading Financial Reports For Dummies, 4th Edition

by Lita Epstein
April 2022
Beginner content levelBeginner
384 pages
9h 56m
English
For Dummies
Content preview from Reading Financial Reports For Dummies, 4th Edition

Chapter 23

Ten Financial Scandals That Rocked the World

IN THIS CHAPTER

check Checking in with cheats

check Taking a look at foul play

check Finding fallout from faulty bookkeeping

I'm sorry to have to say this, but the hard part of writing this chapter was narrowing the list to ten. Too many candidates were competing for a spot on this list. Since 2000, more than 1,800 companies had to restate earnings after company executives, the board of directors, or the Securities and Exchange Commission (SEC) found problems with their financial statements. Because of these misstated earnings, stock prices dropped and investors lost billions of dollars on the stocks they held in their portfolios; some even had their entire retirement savings wiped out.

Thanks to the Sarbanes-Oxley Act of 2002 (which is discussed in detail in Chapter 3), we have seen a major drop in restatements of financial reports. The number of restatements peaked in 2006 to more than 1,800, according to Audit Analytics (www.auditanalytics.com), but has declined by 80 percent since the passage of Sarbanes-Oxley. In 2020, just 4.9 percent of companies had to restate previous financial reports, compared to a peak of 17 percent in 2006.

The ...

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Publisher Resources

ISBN: 9781119871361Purchase Link