"Financial Statement Restatements - Trends, Market Impacts, Regulatory Responses, and Remaining Challenges", examined 919 financial restatements made by public companies between Jan 1, 1997 and June 30, 2002. The total number of financial statement restatements identified each year rose from 92 in 1997 to 225 in 2001. In that period, the GAO said "about 10 percent of all listed companies announced at least one restatement."

Additionally, the GAO found that the number of large company restatements has grown "rapidly" since 1997, with the average size of the companies making restatements increasing from 500 million USD in 1997 to 2.0 billion USD in 2002.

The GAO reviewed public company restatements of a variety of firms, including Enron, Adelphia, Waste Management and Xerox -- companies plagued by questionable accounting.

The report also offers side-by-side comparisons of the existing financial reporting structure and the new Sarbanes-Oxley structure. The GAO said the creation of the new Public Company Oversight Board is "one of the major cornerstones" of the act. "Unlike the previous oversight structure [the disbanded Public Oversight Board], this new board will have sweeping powers to inspect accounting firms, set rules and standards for auditing, and impose meaningful sanctions on violators," the report states.

For the complete 272-page report, click here (PDF).

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