Financial Restatement Essay

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Financial Statement Restatement Paper
Christine Potter
ACC 537
University of Phoenix
Michael Collins
November 7, 2010

Financial Statement Restatement Paper
Beazer Homes USA, Inc., is a top homebuilder in the United States that is headquartered in Atlanta, Georgia.   The Securities and Exchange Commission (SEC) pursued an investigation into matters that were the subject of a five month internal investigation.   It was found that employees of Beazer Homes USA, Inc., violated generally accepted accounting principles (GAAP) by "recognizing revenue earlier than allowed, improperly accounting for sales/leaseback transactions, creating "cookie jar" reserves, and not recording land and   goodwill impairment charges at the proper time" (Johnson, 2009, para 3).   Beazer carried out closings on homes not ready to be moved into, pushing up the closing date in order to record the revenue from the sales and backdated documents of home sales so that they could be recorded in earlier financial reporting periods.
The internal investigation discovered that Beazer's former chief accounting officer, Michael T. Ran, may have been accountable for disobeying generally accepted accounting principles that resulted in his dismissal.   "In a regulatory filing, the company said that Rand may have permitted reserves and other accrued liabilities to be booked in prior accounting periods, and therefore the company recorded total that were in excess of the amounts allowed by GAAP.   The accounts were related to land development costs and costs to complete houses. The company also pointed out that if the accrued liabilities were reversed, and recorded in subsequent periods, the charges could have reduced the company's operating expenses" (Taub, 2007, para 2).   Rand was also accused of violating the company's ethics policy by trying to destroy company documents.   Beazer wound up settling with the U.S. Securities and Exchange Commission without paying any fines.
Due to these violations,...

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