Sorting through restatements – Sometimes financial restatements simply correct mistakes
Abstract: Mistakes on borrowers’ financial statements, requiring financial restatement, can happen. But financial restatements can also be a red flag for fraud or misrepresentation. It’s a challenge for any lender to determine which is which. This article uses a hypothetical situation describing a company that innocently made mistakes, resulting in a costly restatement before it was able to successfully complete a public offering. The article also describes some of the leading causes of financial restatements.