Huron Consulting Group, built by ex-Arthur Andersen partners, has studied restatements over the years. They've put together a "best practices" document that's sure to be in demand among companies that might be 'fessing up to past errors. You can download a copy of it here. (Registration required.)

Investors might not be particularly interested in best practices for going through a restatement process: "just the facts, ma'am" is more or less all they care about. Nevertheless, there are some interesting nuggets that Huron has turned up in building their database of restatement information gleaned from 8-K filings over the years.

For instance:

    ♦ The average time between the filing of the initial Form 8-K and the filing of the restated financial statements was seven weeks; the median was three weeks. That's because some restatements take a couple months, and others stretch over a year.

    ♦ About one out of every six restatements captured by Huron was filed within a day of the Form 8-K; about one-third of the restatements were filed within two weeks of the initial filing.

    ♦ About 80% of the restated financials were filed within four months of the first 8-K warning of non-reliance on financial statements.

    ♦ About 19% of the time, the restated financials encompassed more accounting issues than were originally identified.

    ♦ The nature of the accounting issue didn't matter when it came to how long the restatement took to complete. The same five issues were the most common in the restatements that took more than four months to complete as the ones that were accomplished more quickly. Those issues: equity/debt classification, capitalization/expense issues, reserves/accruals/contingencies, revenue recognition, and taxes.

    ♦ Company size had no bearing on the speed of the restatement process.

    ♦ High-tech firms took longer to restate than "old school" manufacturers.

Investors are often aggravated by the restatement process, which can seem to drag on forever when you want to evaluate a company based on complete facts. Hats off to Huron: knowing these parameters won't make investors welcome restatements, but at least they've provided some realistic, quantitative descriptions of the process that makes it easier to bear.