One of the very few things that managed to encamp in my head during my tenure in junior high school was the ability discern the difference between exact and inexact sciences. The chasm between the two often surfaced during trigonometry tests, when despite me coming up with what I considered reasonably close to the correct answer, it would invariably end up with a red line through it. Either that or a "See me" in large print was splashed across the top of the paper. But I digress.Since trigonometry was considered an exact science, I'm pretty sure accounting was, and is, as well. And that being said, I don't think that I'm going too far out on a limb when I say that a restatement is pretty much a fairly accurate indicator of accounting errors.
I mention this because 2005 saw roughly a doubling of public company accounting restatements - 1,195 versus 613 in the year-ago period, according to a study conducted by proxy researcher Glass-Lewis. The concern attributed the spike in restatements to the mandates of Sarbanes-Oxley, which lately seems to have morphed into something of a political football - but more on that later.
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