We saw you rolling your eyes when we wrote about how important it is to monitor the allowance for doubtful accounts. Well, it turns out we sometimes know what we’re talking about.

Watch List company Par Pharmaceuticals will have to restate results due to accounting errors.

Par Pharmaceutical Cos Inc. (PRX.N: Quote, Profile, Research) said on Wednesday it will restate financial results for fiscal 2004 and 2005 and the first quarter of 2006 due to an understatement of accounts receivable reserves.

The understatement resulted from delays in recognizing customer credits and uncollectible customer deductions.

It said it expects the restatement adjustments to reduce revenues by up to $55 million over the applicable periods, prior to any potential recoveries.

We have written about the importance of monitoring accounts receivables reserves here and here. It is also a component of our “Fundies” worksheet, which helps us keep track of a company’s health. This is a real-life example of why we harp on the accounts receivable reserve so often - a stock that is down more than 4 percent in after-hours trading based on this news. More »

The Watch List returned 2.86 percent in its first week, which was better than the S&P 500 but not as good as the mid- or small-cap indices that are probably a better comparison. We have now indexed the Watch List to 100 effective at the June 30 close (it was billed as the Watch List for Q3, after all) and will monitor it on that basis going forward.

Here are a few news items that affected Watch List names and that we didn’t give a separate post.

Valassis Communications (VCI) cut its earnings outlook

Valassis decreased its second quarter earnings per share guidance to a range of 38 cents to 42 cents, versus earlier guidance of 49 cents to 55 cents. Full-year expectations were trimmed to a range of $1.60 to $1.80 from a previously range of $1.95 to $2.15.

Analysts polled by Thomson Financial were expecting earnings of 51 cents for the quarter and $1.99 for the full year.

The company cited a slowdown in sales and pricing pressure in both its free-standing insert business and neighborhood-specific advertising. The company also said a suspension of its stock buyback program would effect earnings per share.

Accredited Home Lenders Assumed Aames Financial’s Wholesale Operations Ahead of Merger

Accredited Home Lenders Holding Co. (LEND), a mortgage company specializing in non-prime residential mortgage loans, announced today that it would absorb the wholesale operations of Aames Investment Corporation (AIC) under an agreement dated June 23, 2006. This move is designed to reduce employee attrition and maximize the expected synergies from the combination of the Accredited and Aames wholesale operations that would otherwise occur as part of the merger of Accredited and Aames contemplated to occur in the third quarter of 2006.

Conoco Phillips (COP) is open to new deals. Among them - a stake in a natural gas pipeline.
Sierra Health (SIE) got some more credit. At a lower rate.

American International Pasta (PLB) still likes Sysco, but wants to see other distributors. But if they don’t file their 10K by the end of the year, they could be delisted.

Mario Gabelli’s Broken Legacy (GBL)

Birinyi thinks it may be time to look at the homebuilders again. (NVR, OHB, TOL)

Copper surplus? (FCX - Annual Report)

If Microsoft revolutionizes business communications, Plantronics (PLT) will be there to help.

Dade Behring (DADE) is changing auditors.

Brazil’s Gerdau (GGB) bought Peru’s Siderperu.

Luxury soup (CPB).

Gold bugs think the Fed is too soft on inflation. (GG, GLG)

Lakeland Industries (LAKE) announced a largely pointless stock dividend.

Par Pharmaceuticals (PRX) to manufacture generic version of high blood pressure treatment Norvasc starting in late 2007.

UT Starcom (UTSI) filed its previously delayed reports.

Libbey (LBY) sets table for Mexican dinner.

Heineken starts up Indian JV.

Helix (HELX) closed the buyout of Remington Oil and Gas.

Stifel Nicolaus likes the beer stocks.