Our sample includes firms that disclose a single restatement during January 1, 1999 through December 31, 2005.
We identify our restatement sample from several sources. First, we use Audit Analytics to identify firms that report
restatements during the years 2000–2005. Second, we include restatements identified by using an extensive key-word (e.g.,
restat, revis, adjust, error) search in the Lexis–Nexis Library and the U.S. Securities and Exchange Commission (SEC) Filing
Library for restatements during the years 1999–2000.
4
Third, we supplement our sample by comparing the search results to
restatements listed in a GAO (2003) study for the relevant years 1999–2002.
5
Scholz (2008) compares data sources for
overlapping periods and finds that Audit Analytics includes nearly all the restatements identified in the GAO lists and Lexis–
Nexis searches during 2001–2003. Therefore, restatements in 2003–2005 are obtained only from Audit Analytics.