Chicago (Jan. 15, 2004) -- Errors in accounting for reserves and contingencies were the leading cause of financial restatements in 2003, followed by revenue recognition, according to a report by Huron Consulting Group.
Restatements attributable to that category, which includes errors related to accounts receivable and inventory reserves, restructuring reserves, accruals and other loss contingencies, experienced a greater increase in 2003 than any other accounting issue, according to Huron’s 2003 Annual Review of Financial Reporting Matters. Huron noted that those restatements don’t reflect changes in estimates of reserves and contingencies, but rather “reflect flawed judgments due to the oversight or misuse of facts, fraud, or a misapplication of generally accepted accounting principals.”
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