Financial Statement Restatement

Related Essays

Financial Statement Restatement Paper
Financial Statement Restatement Pape Financial Statement Restatement Paper It is well known that over the past decade the amount of errors being discovered
Financial Statement Restatement Paper
Financial Statement Restatement Paper Justina Kabanuk University of Phoenix ACC/537 Financial Accounting
Financial Statement Restatement
Financial Statement Restatement Whether a business is large or small does not exempt it from errors. The number of errors in financial statements has risen in
Financial Statement Restatement Paper
Principles. On Overstock.com official website, 2008 financial statements have been restated but 2009 statements have not and no notes are written about the 2009

Submitted by to the category Business and Industry on 01/12/2013 09:20 AM

Financial Statement Restatement - Northwest Pipe

ACC/537

Vancouver-based Northwest Pipe Co., the seventeenth largest public company in Oregon and southwest Washington, manufactures large-diameter, high-pressure steel pipelines, primarily used in infrastructure projects for drinking water systems (The Columbian, 2010). Since November 2009, the roughly $400 million pipe maker has disclosed an internal accounting investigation, been hit with two lawsuits, received repeated delisting threats from NASDAQ, and is under investigation by the Securities & Exchange Commission (Siemers, 2010).

A 2009 internal investigation related to the company’s revenue recognition practices identified a material error in its accounting practice causing it to overstate earnings. Northwest Pipe’s largest division, which makes massive steel pipes used in water transmission projects, recognizes revenue based on the percentage-of-completion method (Siemers, 2010). The company cited lack of internal financial controls, an absence of effective communication, and the absence of proper procedures to ensure it maintained complete and accurate business documentation to support certain revenue, property and equipment, foreign exchange and vendor claim transactions, including related assumptions and estimates (The Columbian, 2010).

In response to investigation findings, the company restated previously issued financial statements covering the 2007 and 2008 calendar years, the third quarter in 2008, and all four quarters in 2009. The restatements identify combined overstated sales by $10.7 million and profits of $14.8 million from the start of 2007 through June 30, 2009 (Kish, 2010).

Stockholders filed a lawsuit claiming Northwest Pipe’s common stock traded between April 23, 2008 and November 11, 2009 was artificially inflated because of overstated revenues and earnings caused by failure to recognize revenues in accordance with generally accepted accounting principles (GAAP) (SBWire, 2012)....

View Full Essay
Full Essay Stats...
  • Words: 872
  • Pages: 4
  • Views: 203