Rash of Restatements Rattles

Confession season is upon us, but the problem so far isn't companies owing up to earnings shortfalls. Instead, they're admitting past financial results were simply wrong.

Unnerved by a sterner accounting culture, companies have been increasingly reaching back years to ratchet down reported profits by tens or even hundreds of millions of dollars. Eyeing the March 15 filing deadline for calendar 2003 annual reports, Bristol-Myers Squibb(BMY Quote), P.F. Chang's(PFCB Quote), Veritas(VRTS Quote) and Nortel(NT Quote) this week joined a fast-growing string of public companies to say prior financial reports inflated real business trends.

The number of restated audited annual financial statements hit a record high of 206 last year, according to Chicago-based Huron Consulting Group. Observers say 2004 is already shaping up as a banner year for revisions. ...