Financial Restatement Paper

598 Words3 Pages
Financial Restatement Paper Financial Restatement Paper University of Phoenix ACC/537 After the introduction of the Sarbanes Oxley Act lots of companies have had to submit financial restatements in their financials. This paper is to examine the financial restatements that have been done by Kodiak Energy Inc. over the past several years due to incorrect reporting on the value of their stocks. Kodiak Energy entered into an agreement with to purchase land from Thunder River Energy in exchange for shares of stock in the Kodiak Energy Company. Kodiak Energy issued seven million shares reported to be worth $2.00 per share. The SEC decided to look into this arrangement and…show more content…
Kodiak Energies paid a heavy price The shareholders were not pleased about the deception that Kodiak Energy had deceived them on and quickly showed them the repercussion of lying and stealing from them. Over the next five years, Kodiak Energies stock went from being worth $3.65 a share to a mere .10. Even though the company tied to rectify the situation with a restatement, their years of dishonesty caught up to them and they were unable to rectify their reputation by simply failing a misstatement. Kodiak Electric almost put themselves out of business by trying to steal $1,125,835 from their shareholders pockets, and reporting it as additional capital paid in to make it seem legitimate. Restatements can be helpful if they are used to explain honest mistakes. Misstatements cannot be used to cover up illegal accounting procedures. Shareholders will take notice and the end results can be devastating to a company’s business. References Flow-Through Shares Explained. (n.d.). Retrieved June 16, 2012, from http://www.flow-throughshares.com/flow-throughexplained.htm Kodiak Energy, Inc. Restatement of Financials. (2009, March 17). Marketwire: press release distribution, newswire, public relations,investor relations, breaking news, media monitoring. Retrieved June 15, 2012 from http://www.marketwire.com/press-release/Kodiak-Energy-Inc-Restatement-of-Financials-TSX-VENTURE-KDK-962647.htm Kieso, D. E., Weygandt, J.
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