Restatement of Financials

shape 10-Q is lied quarterly by a caller-up and Form 8-K contains genuine depicts that disclose specific events. If a company is audited and flunkes are found, restatements to these statements may be necessary. In the case of regular army Mobility, auditors did identify some areas that warranted a restatement epoch conducting and audit in the first-class honours degree quarter of 2013 the companys financial statements for the 2012 reporting year.USA Mobility take business line Committee determined through the audit performed that a material weakness in internal control over financial reporting and disclosure was identified within Amoco Software Incorporated that is owned and operated by USA Mobility. Amoco Software was acquired by USA Mobility on March 2, 2011. The auditors revealed Mammons procedures in tail for tax income recognition were poorly designed and did non allow for strait-laced internal controls to be utilized. Revenue was creation espyd by the company d uring quarters when it should not have been keyd.Upon this finding, USA Mobility had to determine the correct timeshare to recognize taxation for its software element. Prior to the audit, the revenue for software operations was being recognized by using the residual method and the company would recognize revenue for software licenses upon completion of services. The company deemed services complete when the point of intersection was available for use by the customer. In addition, the company offered services afterward installations were completed for up to 90 days. Since the company offers post-install services, revenue recognition should be delayed until after that period expires.This determination was made when reviewing audit findings to conjure prior reported revenue. The reported periods affected by this finding were the first three quarters of 2011. USA Mobility issued a compact release which contained notice of the restatements for the first three quarters of 2011 and the late filing of the 2011 annual report for the company. Specifically, the company addressed the changes to the financial statements in a press release. The chief(prenominal) changes made to the financial statements affected software revenue and heart revenue for the company.In the first quarter of 011 , the software division revenue was adjusted from $4,799,000. 00 humble to $2,146,000. 00. That is a decrease of 55%. In the second quarter, the software segment revenue was adjusted from down to $9,435,000. 00. That is a decrease of 28%. In the third quarter, the software segment revenue was adjusted from down to $11,191 ,OHO. O. That a decrease of 13%. USA Mobility also reported adjustments caused by the restatement to its total revenue for 2011. The first quarter revenue of $57,335,000. 00 was diminish by cinque percent because of the restatement.The second quarter revenue of $65,171 ,OHO. O was decreased by six percent and the third quarter revenue of $61 was decreased by three percent. The collective revenue of $242,907,000. 00 for 2011 was decreased by quaternary percent as a result of the companys restatement. USA Mobility balance tabloid also had to be adjusted. Deferred revenue was affected during each quarter during 2011. apiece quarter showed a higher deferred revenue amount as a result of the correct method the company was using to recognize revenue to remain in compliance.The overall effects of the restatement were limited to the software segment of the company. In turn, these changes also affected the overall revenue numbers and the course the company reports deferred revenue for future purposes. The reduction in revenue did not have a negative impact on stockholders earnings. The price of stock per share has remained steady prior to and since the announcement. USA Mobility did publish a press release to inform all parties with an interest about measures the company has interpreted to rectify the situation and will continue to use to r emain in compliance for future audits.