Accounting Restatements and Institutional Ownership: The Case of U.K

Evidences have revealed that the instances of accounting restatements have increased considerably since the past years. The numbers of companies filing restatements with SEC (Securities and Exchange Commission) reached 25000 during the year 2005 and the initial nine months of the year 2006 which was evidently a record increase in the accounting history (Turner Weirich, 2006). Empirical evidences based on the aspect revealed that the instances of accounting restatements increased almost eighteen-fold since 1997 (when the figure was 90) to 2006 (when the figure was 1,577). Researchers further stated that the frequencies of accounting restatements were recorded to accelerate from 2001 and gained historic heights in 2006 (Scholz, 2006).