Clawbacks, Fiduciary Duties, and Block-Tagging (Part 5)
The proposed rule on clawbacks had some interesting statistical data.
Relying on a study by Audit Analytics, 2013 Financial Restatements: A Thirteen Year Comparison (2014), the release noted that "during 2012 and 2013, U.S. issuers who are not accelerated filers accounted for approximately 55 percent of total U.S. issuer restatements." Non-accelerated filers (as defined in Rule 12b-2) are small companies with a market value of less than $75 million. These were the same companies that were exempted from the attestation requirement for internal controls that appeared in Section 404(b) of SOX. See Exchange Act Release No. 62914 (Sept. 15, 2010).
One suspects that had attestation been required, the number of restatements would have been higher.