1250); see also GlenFed, 42 F.3d at 1548.
KPMG reaudited Levi's financial statements for 2001, 2002, and the first half of 2003 after it replaced Levi's former auditors. KPMG audited Levi's 2003 financial statements. As a result of KPMG's audits, Levi was required to restate its financial statements. In October 2003 and March 2004 Levi announced that it would restate its financial statements for 2001, 2002, and the first two quarters of 2003 in several respects. Two of the restatements related to tax matters:
. a $24 million increase in tax expense and tax liability in 2001 resulting from a tax deduction taken twice in error for losses related to closures of various plants; and
. a $19 million increase in tax expense in 2001 and 2002 to properly provide forthe 2002 fiscal year to $349 million at the end of the 2003 fiscal year. CAC *991 ¶¶ 42, 53, 63. Plaintiffs appear to argue that Levi recorded the increase in the valuation allowance in 2003 even though it should have been recorded, at least in part, in earlier years due to misstatements in those prior years. However, plaintiffs' allegations, viewed in light of the complaint and the additional documents for which the court has taken judicial notice, do not support such a contention.
First, the 2003 financial statements, including the need to increase the valuation allowance in 2003, was a product of an audit by KPMG in which KPMG issued an unqualified opinion. Under GAAP, changes in valuation allowances are to be recorded in the period in which