Disclosure and correction of previously issued financial statements. The nature and severity of the financial impact may affect the company’s valuation and lead to legal claims by investors. (ED) A company disclosure if the firm believes that previously issued financial statements should not be relied upon because of an error in the statements. Disclosure is required if the auditor believes that its previously issued audit reports or interim reviews on financial statements should not be relied upon. In both cases, the company also must disclose whether its audit committee, full board or authorized executive officers have discussed these matters with its auditor. Investors should pay attention to these disclosures, which could affect the company’s previously reported earnings.