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Remediation and Restatements Services

Accounting restatements addressing deficiency material weakness

Change is a business reality. It’s also vital to your company’s future. But change can create risk in financial reporting. Deloitte can help you analyze current processes and provide implementation services. And if remediation or restatements become necessary, we can help you take prompt, decisive action to get back on track.

Common triggers of financial statement challenges

Many business conditions impact financial accounting processes and reporting. External factors such as labor shortages, supply constraints, and rising commodity prices may challenge accounting and financial reporting processes. New technologies can affect more than just data organization and can have a ripple effect on processes and controls. Strategic shifts such as business acquisitions or new product lines often bring processes that existing systems and controls weren’t originally designed to handle. Then there is the impact of new standards and regulations with nuances that drive complexity into the overall accounting and finance process.

Changes like these highlight the importance of adjusting processes and systems so the organization can anticipate and respond to issues as they arise. If cracks have already appeared in the lines of defense meant to keep risk under control, the result could require the remediation of processes and systems or worse, a restatement if the issues aren’t caught in time. 

Key considerations for mitigating restatement risk

In the face of disruption, how can you build a more resilient accounting organization? Consider reducing restatement risk along three dimensions:

  • An agile and capable team
  • A strong controls and governance framework
  • A playbook for proactive remediation

Resiliency also includes the ability to respond to a remediation situation quickly and methodically. With that in mind, consider a framework to rapidly respond and address the root cause of the remediation event. 

How Deloitte can help

We can help your business plan for or respond to complicated accounting and reporting challenges. Our services include assisting management in the following areas:

  • Set up a system of governance and controls that focuses on risks in many areas
  • Cross-train people to interpret—and challenge assumptions about—internal and external conditions that raise the risk of remediation and restatement
  • Establish processes to detect and report on early warning of potential issues
  • Develop and implement a roadmap for managing integrated transformation across multiple projects to help controllership develop their long-term vision and strategy.
  • Preparation and review of accounting records, assistance with financial close and reporting, and accounting policies and procedures
  • Statistical forecasting, risk-adjusted simulations, and enhanced visualizations and analytics of historical adjustments
  • Analyze and comment on current accounting processes as well as implement changes in context of IT systems and opportunities for automation (i.e. Robotic Process Automation).
  • Guidance on accounting and disclosure matters and drafting of financial statements and disclosures
  • Preparation of draft disclosures related to SEC filings, including 12b-25, 8-K, 10-Q, and 10-K
  • Support for the development, documentation and implementation of controls, policies, and procedures
  • Assist in control modernization including rationalizing and prioritizing the number of controls, standardizing processes, and automating controls
  • Assistance with identifying, assessing, and reporting internal control deficiencies, including preparing analyses and draft disclosures
  • Remediation plan development and implementation support
  • Internal audit outsourcing and co-sourcing
  • Restatement support, which may include preparing accounting entries and evaluating areas that involve judgment and management estimates
  • Assistance with analyzing allegations of corporate fraud or financial mismanagement
  • Focused risk assessment or overall enterprise risk management services
  • Project management

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Perspective

Our approach

Planning for or reacting to an accounting event such as a restatement, investigation, or material weakness requires knowledge and experience. To help your company expedite a remediation (with or without a restatement), we take a coordinated but accelerated six-step approach.

  • Assess the situation, gauge the scope, and get the appropriate people involved
  • Develop a communication strategy for all stakeholders (including the board, auditors, investors, regulators, and banks)
  • Determine the nature, cause, and ripple effects of the error
  • Rapidly identify and prioritize remediation tasks
  • If necessary, prepare and file the restated financial statements
  • Repair and improve the processes that led to the remediation

Contact us to learn more about our services

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Get in touch

Hogan Miller

Hogan Miller

Audit & Assurance Partner and Remediation & Restatement Leader | Deloitte & Touche LLP
+1 713 982 2586
Sean Torr

Sean Torr

Managing Director | Deloitte & Touche LLP
+1 615 259 1888

The services described herein are illustrative in nature and are intended to demonstrate our experience and capabilities in these areas; however, due to independence restrictions that may apply to audit clients (including affiliates) of Deloitte & Touche LLP, we may be unable to provide certain services based on individual facts and circumstances.