Final answer:
If financial statements are restated after certification, CEOs may be required to return bonuses and profits awarded based on incorrect information under the 'clawback' provisions of the Sarbanes-Oxley Act. Additional consequences for the company can include fines, corrective disclosures, and legal action, depending on the extent and nature of the misstatements.
Step-by-step explanation:
When financial statements are required to be restated after certification, it usually means an error or misconduct was discovered in the previously issued financial reports. In such a case, regarding option D), CEOs and other executives may indeed be required to return bonuses and profits that were awarded based on the inaccurate financial information.
This action falls under the 'clawback' provisions of the Sarbanes-Oxley Act of 2002, which stipulate that in the event of a restatement due to misconduct, the CEO and CFO may be obliged to reimburse the company for any bonus or other incentive-based or equity-based compensation and any profits from the sale of the company's securities during the twelve months following the first public issuance or filing with the Securities and Exchange Commission (SEC) of the erroneous document.
In addition to potential clawbacks, other consequences can include corrective disclosures, fines imposed on the company, and potential legal action against those responsible for the misstatements. The intention behind these measures is to uphold financial integrity and investor trust in the financial reporting process. It should be noted that penalties vary based on the nature and severity of the restatements and whether fraud was involved.