final paper - Overstock.com Padavano Overstock.com Randi...

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Overstock.com Padavano Overstock.com Randi Padavano ACC 537 February 28, 2011 Angela Rose A financial statement restatement can be defined as “the result of a change in accounting principles or an error” (Carter 2010, p.1). A restatement often involves a completely new audit and could affect future financial statements in the next year. The primary reasons for a restatement include adjusting revenue, costs or expenses, or to address a security issue (Carter, 2010 p. 1). Overstock.com, the company, has to restate the company’s financial statements. The financial statements will need to go back for over a five-year period because of problems
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Overstock.com Padavano regarding the earnings and revenue. This controversial Internet retailer needs to restate earnings beginning in 2003 to 2007, which will reduce revenue by at least $12 million (CFO). For Overstock.com, the clear reason for a restatement would be to adjust revenue. Overstock.com stated higher revenue than should have. According to Patrick Byrne, the chairman and Chief Executive Officer (CEO) of Overstock.com, the reason for the misstatement was due to the upgrading of the system (Taub 2008). In Byrne’s interview, he stated, “The short version is: when we upgraded our system, we
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final paper - Overstock.com Padavano Overstock.com Randi...

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