Courtesy of PCAOB
Auditor changes and restatements go hand in hand, according to a new
The Public Company Accounting Oversight Board found that from 2005 to 2024, an average of 29% of companies with Big R restatements reported an auditor change in the year before the restatement. A Big R restatement is a restatement disclosed in a Securities and Exchange Commission Form 8-K, Item 4.02.
Comparatively, in that same period, the auditor-change rate across the broader population averaged 11%, which is 18 points lower than the auditor-changer rate of companies with Big R restatements.
The data was collected by the PCAOB's Office of Economic and Risk Analysis.
