April 05, 2006
Impact of Financial Restatements on Smaller Issuers
Financial restatements are tough on everyone ... most of all shareholders and their confidence in their investments.
Take a look at what happened to one smaller issuer, Richardson Electronics (NASDAQ, Symbol: RELL) over the last 24 hours. Today, the electronics company reported that it would restate its results for the three years ending in May 2005 as well as for the first two quarters of the current fiscal year. The $100+ million market-cap discovered errors in financial accounting at one of its Italian subsidiaries. NASDAQ investors cut over 20% of the company's market capitalization when shares began trading.
Ouch! Somebody is $20 million lighter.
Solid internal controls over financial reporting are fundamental to reducing this kind of market cap erosion.
To learn more about how your company can affordably strengthen internal control over financial reporting to comply with SOX Section 404 please go to www.issuescentral.com to learn more about the Compliance Playbook(R) . Canadian-based issuers needing to comply with SOX or MI 52-109 are encouraged to learn more about the Compliance Partner(tm) product by going to www.compliancepartner.ca.
Take a look at what happened to one smaller issuer, Richardson Electronics (NASDAQ, Symbol: RELL) over the last 24 hours. Today, the electronics company reported that it would restate its results for the three years ending in May 2005 as well as for the first two quarters of the current fiscal year. The $100+ million market-cap discovered errors in financial accounting at one of its Italian subsidiaries. NASDAQ investors cut over 20% of the company's market capitalization when shares began trading.
Ouch! Somebody is $20 million lighter.
Solid internal controls over financial reporting are fundamental to reducing this kind of market cap erosion.
To learn more about how your company can affordably strengthen internal control over financial reporting to comply with SOX Section 404 please go to www.issuescentral.com to learn more about the Compliance Playbook(R) . Canadian-based issuers needing to comply with SOX or MI 52-109 are encouraged to learn more about the Compliance Partner(tm) product by going to www.compliancepartner.ca.
