Accounting-related Class Action Lawsuits Rose 33 Percent in One Year

By:
Chris Gaetano
Published Date:
Apr 6, 2017
Scales

The number of class action lawsuits filed over accounting matters increased by 33 percent between 2015 and 2016, with the total number of 93 being the highest it's been since the height of the economic crisis in 2008, according to Accounting Today. While the total number of settlements slightly declined from 50 to 46, at the same time the total settlement value saw a dramatic spike, climbing almost 80 percent, totaling $4.8 billion, its highest level since 2007. This number, however, is skewed by a small number of mega-settlements: of the $4.8 billion total, $4.4 billion came from just nine cases. 

A suit is considered accounting-related if it pertains to violations of GAAP, auditing violations, or weaknesses in internal control over financial reporting. Accounting Today said that many of these class action lawsuits are related to mergers and acquisition activity, with many plaintiffs alleging that the company failed to provide a reconciliation of non-GAAP measures to GAAP measures. 

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