InvestLooking for an eye-opening example of Sarbanes-Oxley’s impact on corporate finance? Consider this: In 1997, there were 90 public-company financial restatements in the United States. In 2006, there were 1,577.

That stunning number is part of a new Treasury Department study titled “The Changing Nature and Consequences of Public Company Financial Restatements.” Interestingly, the number of restatements due to fraud and revenue dropped considerably during that same period.

Still, more companies than ever find themselves having to restate their financials, and that’s leaving more and more investors in the dark for longer periods of time. But according to CFO.com’s Sarah Johnson, these so-called “dark periods” will occur less frequently if the SEC’s Advisory Committee on Improvements to Financial Reporting (CIFR) has its way.

“On average, restating companies make adjustments to nearly two years’ worth of financial statements, according to a new study,” Johnson writes. “Some of that work may not be necessary; less than 25 percent of restatements are actually material to a company’s financial standing, say CIFR members. In their attempt to cut down on the number of those unnecessary restatements, CIFR’s members recommended that the SEC reconsider its materiality guidelines and encourage companies to weigh their decisions on whether to restate on the needs of current investors.” Investor advocates, however, are not pleased.

Meanwhile, CFO.com’s Alan Rappeport says being the finance chief of a company during a restatement can jeopardize a career.

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