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Journal articles on the topic 'Financial Restatements'

Author: Grafiati

Published: 4 June 2021

Last updated: 20 February 2023

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1

Adams, John C., Darren K. Hayunga, and Stephanie J. Rasmussen. "The Restating of Financial Statements by REITs." Journal of Accounting, Auditing & Finance 32, no. 3 (October 13, 2015): 350–71. http://dx.doi.org/10.1177/0148558x15607748.

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This article is the first to examine financial restatements by real estate investment trusts (REITs). We provide a descriptive breakdown of the underlying causes of REIT restatements as well as overall and subsample analyses of stock market reactions to restatements from 2000 to 2011. REIT restatements occur for a large variety of accounting issues with the most common being expense-related (e.g., leases, depreciation). We find that the average market reaction for REIT restatements is negative 0.63%, which is less negative than non-REIT restatements. Further investigation reveals that a signif

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Wu, Peng, Lei Gao, Zhibin Chen, and Xiao Li. "Managing reputation loss in China: in-depth analyses of financial restatements." Chinese Management Studies 10, no. 2 (June 6, 2016): 312–45. http://dx.doi.org/10.1108/cms-12-2015-0275.

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Purpose This paper aims to investigate, in China stock market, whether the reputation loss of a firm caused by financial restatements will lead to significant economic consequences such as financial distress and how a firm should respond to such a crisis. Design/methodology/approach This paper uses Chinese A-share listed firms from 2004 to 2013 as research samples to test research hypotheses using regression analyses. Findings This paper finds a significant relationship between restatements and financial distress, and such a relationship will be affected by both the type and the magnitude of r

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3

Qiu, Shi, Hong-Qu He, and Yuan-sheng Luo. "THE VALUE OF RESTATEMENT TO FRAUD PREDICTION." Journal of Business Economics and Management 20, no. 6 (October 14, 2019): 1210–37. http://dx.doi.org/10.3846/jbem.2019.10489.

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A financial report restatement reflects errors in the previous financial statement, and thus it increases investors’ doubt about the credibility of the financial statement. The primary objective of this paper is to examine whether restatement announcements imply increased fraud risks in Chinese firms in the context that up to one quarter of listed companies have restated their financial reports in China, and explore the implications of the content, severity and reasons for restatements with respect to fraud. In this paper, firms with financial restatements prove to be more likely to be labeled

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Mande, Vivek, and Myungsoo Son. "Do Financial Restatements Lead to Auditor Changes?" AUDITING: A Journal of Practice & Theory 32, no. 2 (December 1, 2012): 119–45. http://dx.doi.org/10.2308/ajpt-50362.

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SUMMARY: This paper examines whether financial restatements are associated with subsequent auditor changes. A financial restatement represents a breakdown in a company's financial reporting, but, importantly, also of its audit. We argue that in response to pressure from capital markets, restating firms will dismiss their auditors to increase audit quality and restore reputational capital lost when the restatements are announced to the investing public. Using a large sample of restatements and auditor changes we find that, consistent with our hypothesis, the likelihood of auditor-client realign

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Wei, Jo Ting. "The association between mandatory financial restatements and the turnover of firm executives." Corporate Ownership and Control 6, no. 1-4 (2008): 467–74. http://dx.doi.org/10.22495/cocv6i1c4p6.

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Prior studies have examined the relationship between financial restatements and the turnover of firm executives and find that financial restatements lead to the turnover of firm executives. They often concern the above effects in developed countries such as America rather than those in developing countries. Besides, financial restatements externally prompted are more serious. However, past research little explores this type of financial restatement. Therefore, this study aims to examine the association between mandatory financial restatements and the turnover of firm executives—the chairman an

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Qasem, Ameen, Norhani Aripin, and Wan Nordin Wan Hussin. "A DESCRIPTIVE ANALYSIS OF FINANCIAL RESTATEMENTS IN MALAYSIA." International Journal of Service Management and Sustainability 2, no. 2 (March 2, 2020): 92. http://dx.doi.org/10.24191/ijsms.v2i2.8073.

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This study provides an overview of the issue of financial restatements among Malaysianpublic listed companies by investigating the trend and reasons for financial restatementsfor the period beginning 2005 through to 2014. Based on the Thompson Reuters DataStream database which provides restatement data for 915 Malaysian companies (9,150 company-year observations), detailed analysis shows that there is a total of 1,945 (21.26%) restatements occurring during the period. The highest number of restatement occurrences was in 2010 with 342 cases (17.58%) while the lowest was in 2008 with 41 cases (2

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7

Huang, Ying, and Susan Scholz. "Evidence on the Association between Financial Restatements and Auditor Resignations." Accounting Horizons 26, no. 3 (May 1, 2012): 439–64. http://dx.doi.org/10.2308/acch-50200.

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SYNOPSIS Financial restatements have significant implications for auditor-client relationships. We estimate that a restatement increases the odds of an auditor resignation dramatically. Restatements involving fraud, reversing profit to loss, and those disclosed in press releases appear to drive the increased resignation likelihood. Furthermore, companies with relatively severe restatements are more likely to hire smaller auditors following a resignation. Collectively, these results are consistent with auditors interpreting restatements as an indication of increased client risk. Data Availabili

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Wilson, Wendy M. "An Empirical Analysis of the Decline in the Information Content of Earnings Following Restatements." Accounting Review 83, no. 2 (March 1, 2008): 519–48. http://dx.doi.org/10.2308/accr.2008.83.2.519.

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Regulatory officials and market analysts have speculated that the loss of credibility in subsequently reported financial information is a long-lasting consequence of earnings restatements. I measure the information content of earnings using a standard earnings-returns framework over several years surrounding restatements to examine characteristics of the decline in the information content of earnings. Results indicate that although the information content of earnings declines following restatements, the loss is temporary. In particular, the earnings response coefficients for earnings announcem

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Ettredge, Michael, Ying Huang, and Weining Zhang. "Restatement Disclosures and Management Earnings Forecasts." Accounting Horizons 27, no. 2 (February 1, 2013): 347–69. http://dx.doi.org/10.2308/acch-50414.

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SYNOPSIS We examine the impact of financial restatements on managers' subsequent earnings forecasts. We argue that restatements create conflicting incentives. One incentive is to repair manager reputations as information providers by providing more and better guidance via earnings forecasts. The opposing incentive is to avoid risk by reducing the information in forecasts. We find that compared to control firms, restatement companies exhibit a decreased propensity to issue quarterly earnings forecasts following restatements. Those that do make forecasts issue fewer forecasts in post-restatement

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Fragoso, João L. F. R., Rúben M. T. Peixinho, Luís M. S. Coelho, and Inna C. S. Paiva. "The impact of financial restatements on financial markets: a systematic review of the literature." Meditari Accountancy Research 28, no. 6 (May 2, 2020): 1119–47. http://dx.doi.org/10.1108/medar-05-2019-0482.

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Purpose The purpose of this paper is to discuss the most relevant issues related to the impact of financial restatements in the dynamics of financial markets and identify several research gaps to be investigated in future research. Design/methodology/approach The methodology is based on a systematic review of the literature described by Tranfield et al. (2003). The final sample includes 47 academic papers published from 1996 to 2019. Findings Papers in this domain discuss three main topics: how the market prices the announcement of a financial restatement; how financial restatements affect the

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Schmidt, Jaime, and Michael S. Wilkins. "Bringing Darkness to Light: The Influence of Auditor Quality and Audit Committee Expertise on the Timeliness of Financial Statement Restatement Disclosures." AUDITING: A Journal of Practice & Theory 32, no. 1 (September 1, 2012): 221–44. http://dx.doi.org/10.2308/ajpt-50307.

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SUMMARY: This study investigates whether auditor quality and audit committee expertise are associated with improved financial reporting timeliness as measured by the duration of a financial statement restatement's “dark period.” The restatement dark period represents the length of time between a company's discovery that it will need to restate financial data and the subsequent disclosure of the restatement's effect on earnings. For a sample of dark restatements disclosed between 2004 and 2009, we find that companies that engage Big 4 auditors have shorter dark periods than companies that do no

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Liu, Li-Lin, K. Raghunandan, and Dasaratha Rama. "Financial Restatements and Shareholder Ratifications of the Auditor." AUDITING: A Journal of Practice & Theory 28, no. 1 (May 1, 2009): 225–40. http://dx.doi.org/10.2308/aud.2009.28.1.225.

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SUMMARY: Regulators and legislators have focused significant attention on financial statement restatements in recent years, and the U.S. Securities and Exchange Commission (SEC) and financial statement users view restatements as audit failures. The SEC (2000, 2003a) suggests that shareholder voting on auditor ratification will be impacted by perceptions of audit quality. In this paper we examine shareholder voting on auditor ratifications in 2005 or 2006 following restatement announcements by SEC registrants. We find that shareholders are more likely to vote against auditor ratification after

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Altarawneh, Marwan, Rohami Shafie, and Rokiah Ishak. "Chief Executive Officer Characteristics and Financial Restatements in Malaysia." International Journal of Financial Research 11, no. 2 (March 16, 2020): 173. http://dx.doi.org/10.5430/ijfr.v11n2p173.

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The purpose of this paper is to investigate whether the Chief Executive Officer (CEO) characteristics affect the occurrence of financial restatements in Malaysian firms. The CEO characteristics used in this study were tenure, honorific title, gender, expertise, and age. In addition, the financial restatement has been measured as a dummy variable as to whether companies restate their financial statements or not. The sample of this study comprised 442 companies listed in the main market of Bursa Malaysia during the period 2012–2016. The panel data method was utilised to analyse the data. This st

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Irani, Afshad J., Stefanie L. Tate, and Le (Emily) Xu. "Restatements: Do They Affect Auditor Reputation for Quality?" Accounting Horizons 29, no. 4 (June 1, 2015): 829–51. http://dx.doi.org/10.2308/acch-51187.

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SYNOPSIS We examine whether an auditor's involvement with a financial statement restatement has a negative effect on their reputation as evidenced by both clients' and the market's assessments of audit firm quality. Specifically, we investigate the effect of auditor involvement with restatements on the non-restating clients' likelihood to dismiss their auditors in the year subsequent to restatement and on non-restating clients' market adjusted returns (MARs) around the restatement announcement date. We also investigate whether the severity of the restatements has a differential effect on both

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Abbott, Lawrence J., Susan Parker, and Theresa J. Presley. "Female Board Presence and the Likelihood of Financial Restatement." Accounting Horizons 26, no. 4 (July 1, 2012): 607–29. http://dx.doi.org/10.2308/acch-50249.

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SYNOPSIS: This paper investigates the impact of one form of board diversity on the incidence of financial restatement. More specifically, we hypothesize that there is a negative relation between female board presence (defined as whether or not a board has at least one female director) and the likelihood of a financial restatement. Our hypothesis is consistent with a female board presence contributing to the board's ability to maintain an attitude of mental independence, diminishing the extent of groupthink and enhancing the ability of the board to monitor financial reporting. Utilizing the U.S

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Blankley, Alan I., David N. Hurtt, and Jason E. MacGregor. "Abnormal Audit Fees and Restatements." AUDITING: A Journal of Practice & Theory 31, no. 1 (January 1, 2012): 79–96. http://dx.doi.org/10.2308/ajpt-10210.

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SUMMARY We investigate the relationship between audit fees and subsequent financial statement restatements in the years following the Sarbanes-Oxley Act of 2002 (SOX). After controlling for internal control quality, we find that abnormal audit fees are negatively associated with the likelihood that financial statements are subsequently restated. This result conflicts with prior work that finds that audit fees are positively associated with future restatements. Overall, our evidence is consistent with the notion that restatements reflect low audit effort or underestimated audit risk in the peri

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Xu, Yang, and Lijuan Zhao. "An investigation of financial expertise improvement among CFOs hired following restatements." American Journal of Business 31, no. 2 (June 6, 2016): 50–65. http://dx.doi.org/10.1108/ajb-07-2015-0022.

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Purpose – The purpose of this paper is to examine chief financial officer (CFO) qualification improvement associated with restatements and restatement characteristics (restatement materiality). The study is motivated by recent high-profile financial scandals and increasing instances of restatements which focus public attention on the role of CFOs in maintaining the integrity and quality of corporate financial reporting. Design/methodology/approach – The study employs data composed of 80 restating firms matched with 80 non-restating firms with hand-collected CFO turnover information in the peri

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Badertscher, Brad A., and Jeffrey J. Burks. "Accounting Restatements and the Timeliness of Disclosures." Accounting Horizons 25, no. 4 (December 1, 2011): 609–29. http://dx.doi.org/10.2308/acch-50026.

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SYNOPSIS Regulators are concerned that during the process of restating financial statements, firms fail to provide timely progress updates, and delay earnings announcements and regulatory filings. To reduce these perceived lags in disclosure, an advisory group to the Securities and Exchange Commission recommends more use of catch-up adjustments rather than restatements to correct accounting errors. Some investor groups oppose the recommendations because they fear that preparers will begin to correct important errors through catch-up adjustments, which are less transparent than restatements. We

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Hasnan, Suhaily, Nur Syafiqah Mohamad Eskandar, Alfiatul Rohmah Mohamed Hussain, Ahmed Abdullah Saad Al-Dhubaibi, Mohd Ezrien Mohamad Kamal, and Rohmawati Kusumaningtias. "Audit committee characteristics and financial restatement incidence in the emerging market." Corporate and Business Strategy Review 3, no. 2 (2022): 20–33. http://dx.doi.org/10.22495/cbsrv3i2art2.

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This paper discusses issues concerning audit committee characteristics that lead to the occurrence of financial restatements in Malaysian public listed companies (PLCs). The audit committee characteristics were measured using size, independence, frequency of meetings, audit tenure, gender, expertise, age, ethnicity, legal qualifications, and political connections. The data in this study were extracted from the annual reports of 100 firms that had restated their financial statement between 2006 and 2015, and a total of 200 non-restatement firms were matched and observed as control firms. Using

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Romanus, Robin N., John J. Maher, and Damon M. Fleming. "Auditor Industry Specialization, Auditor Changes, and Accounting Restatements." Accounting Horizons 22, no. 4 (December 1, 2008): 389–413. http://dx.doi.org/10.2308/acch.2008.22.4.389.

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SYNOPSIS: The increasing occurrence of accounting restatements has drawn considerable attention from regulators, audit firms, and corporate boards concerning audit and financial statement quality. Research suggests that auditor industry specialization is associated with improved error detection and greater financial statement quality. We examine the impact of auditor industry specialization on a sample of restatement and nonrestatement firms and find that auditor industry specialization is negatively associated with the likelihood of accounting restatement. In addition, focusing on the subset

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Rich, Kevin T., and Jean X. Zhang. "Municipal accounting restatements and top financial manager turnover." Journal of Public Budgeting, Accounting & Financial Management 28, no. 2 (March 1, 2016): 222–49. http://dx.doi.org/10.1108/jpbafm-28-02-2016-b005.

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We investigate whether municipal financial manager turnover is associated with accounting restatements. This analysis is motivated by the notion that suspect financial reporting could limit the ability of stakeholders to assess the use of public resources (GASB, 2006). The evidence suggests that municipalities disclosing accounting restatements are more likely to see changes in the top financial manager position than a control sample of non-restatement municipalities. Overall, our findings are consistent with associations between financial reporting quality and the labor market for municipal f

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Susanto, Androni, and Dhea Ananda Syahputri. "Pengaruh tata kelola perusahaan dan karakteristik spesifik perusahaan pada kejadian penyajian kembali laporan keuangan." Fair Value: Jurnal Ilmiah Akuntansi dan Keuangan 5, no. 3 (October 25, 2022): 1282–94. http://dx.doi.org/10.32670/fairvalue.v5i3.2349.

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Financial statements are a means of communication between the activities of the company and the parties with an interest in the company. This study aims to analyze the effect of corporate governance as measured by board size, board independence, audit committee finance, audit quality, and company-specific characteristics as measured by firm size, ROA, leverage, and liquidity on the restatement of financial statements. The research method used is a quantitative method. There are 513 financial and non-financial companies listed on the Indonesia Stock Exchange during the 2017–2021 period, but 14

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Wei, Jo-Ting, Iou-Ming Wang, and Hsin-Hung Wu. "Mandatory restatement, family dominance and management turnover: the evidence from an emerging economy." Investment Management and Financial Innovations 14, no. 2 (July 6, 2017): 144–55. http://dx.doi.org/10.21511/imfi.14(2-1).2017.01.

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Due to the uniqueness of mandatory restatements, this paper examines whether family dominance affects the relationship between mandatory restatements and management turnover in an emerging economy – Taiwan. This paper adopts logistic regression models along with reporting the marginal effect of all explanatory variables to examine management turnover in different years around the year of mandatory restatement announcement. The findings show that family directorship weakens the positive relationship between mandatory restatements and management turnover in one year after the year of mandatory r

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Li, Yuedong, Xianbing Liu, and Qing Yan. "Is institutional investor a supervisor or cooperator?" Nankai Business Review International 9, no. 1 (March 5, 2018): 2–18. http://dx.doi.org/10.1108/nbri-02-2017-0007.

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Purpose The purpose of this paper is to discuss whether top management will assume their liabilities especially when financial restatement occurs, and,based on the “effective supervision theory” and “strategic cooperation theory,” to examine whether an institutional investor is a supervisor or a cooperator considering the management turnover caused by financial restatement in the companies. Design/methodology/approach Using a sample of the A-share-listed companies from year 2010 to year 2014 and dividing financial restatement into fraudulent financial restatement and other financial restatemen

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Withers, Michael C., Michael D. Howard, and Laszlo Tihanyi. "You’ve Got a Friend: Examining Board Interlock Formation After Financial Restatements." Organization Science 31, no. 3 (May 2020): 742–69. http://dx.doi.org/10.1287/orsc.2019.1319.

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We investigate the impact of financial restatements as critical events that influence board interlock formation among Fortune 500 firms during the 2009–2013 period. Our empirical study is based on a longitudinal analysis of tie formation while accounting for dynamic changes in the behavior and characteristics of network nodes using stochastic actor-oriented models. We find that firms facing financial restatements experience disruption in network ties. However, social status helps mitigate these effects, and restating firms build new ties through socially embedded processes, such as reciprocity

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Papík, Mário, and Lenka Papíková. "DETECTION MODELS FOR UNINTENTIONAL FINANCIAL RESTATEMENTS." Journal of Business Economics and Management 21, no. 1 (November 28, 2019): 64–86. http://dx.doi.org/10.3846/jbem.2019.10179.

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The aim of manuscript is to analyze and identify determinants of honest accounting errors leading to financial restatements based on data from SEC database and from annual reports. Reason for this study is that accounting errors are expensive for companies that need to change already published financial statements and have impact on company reputation and stock price. Most of authors focus on prediction of accounting frauds and financial restatements remain in the background of research. This study initially tests existing accounting fraud detection model of Beneish on a sample of 40 financial

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Hennes, Karen M., Andrew J. Leone, and Brian P. Miller. "Determinants and Market Consequences of Auditor Dismissals after Accounting Restatements." Accounting Review 89, no. 3 (December 1, 2013): 1051–82. http://dx.doi.org/10.2308/accr-50680.

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ABSTRACT This study examines the conditions under which financial restatements lead corporate boards to dismiss external auditors and how the market responds to those dismissal announcements. We find that auditors are more likely to be dismissed after more severe restatements but that the severity effect is primarily attributable to the dismissal of non-Big 4 auditors rather than Big 4 auditors. We also document that among corporations with Big 4 auditors, those that are larger and more complex operationally are less likely to dismiss their auditors. Combined, this evidence suggests that firms

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Li, Yiwen, You-il Park, and Jinyoung Wynn. "Investor reactions to restatements conditional on disclosure of internal control weaknesses." Journal of Applied Accounting Research 19, no. 3 (September 10, 2018): 423–39. http://dx.doi.org/10.1108/jaar-10-2017-0107.

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Purpose The purpose of this paper is to investigate investor reactions to financial restatements conditional on disclosures of internal control weaknesses under Section 404 of the Sarbanes-Oxley Act. Design/methodology/approach The research uses cumulative abnormal stock returns (CARs) as a proxy for investor reactions. Restatements and internal control reports are available on audit analytics. Multivariate regression analyses were used for testing. Findings Using a sample of restating firms whose original misstatements are linked to underlying internal control weaknesses, the research finds t

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Raghunandan, K., William J. Read, and J. Scott Whisenant. "Initial Evidence on the Association between Nonaudit Fees and Restated Financial Statements." Accounting Horizons 17, no. 3 (September 1, 2003): 223–34. http://dx.doi.org/10.2308/acch.2003.17.3.223.

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An increasing number of firms have restated previously issued financial statements in recent years. Legislators, regulators, and others speculate that restatements are associated with fees received by auditors for nonaudit services (nonaudit fees). The current study provides empirical evidence on the association between firms that restate financial statements and the nonaudit service fees received by incumbent auditors during reporting periods that required restatement. We identify a sample of 110 firms that restated financial statements previously filed with the SEC for fiscal years 2000 or 2

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Abbott, Lawrence J., Susan Parker, and Gary F. Peters. "Audit Committee Characteristics and Restatements." AUDITING: A Journal of Practice & Theory 23, no. 1 (March 1, 2004): 69–87. http://dx.doi.org/10.2308/aud.2004.23.1.69.

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This study addresses the impact of certain audit committee characteristics identified by the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees (BRC) on the likelihood of financial restatement. We examine 88 restatements of annual results (without allegations of fraud) in the period 1991–1999, together with a matched pairs control group of firms of similar size, exchange listing, industry and auditor type. We find that the independence and activity level (our proxy for audit committee diligence) of the audit committee exhibit a significant and negative associati

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Wans, Nader. "Corporate Social Responsibility and Market-Based Consequences of Adverse Corporate Events: Evidence From Restatement Announcements." Journal of Accounting, Auditing & Finance 35, no. 2 (September 1, 2017): 231–62. http://dx.doi.org/10.1177/0148558x17725968.

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I analyze the informational value of corporate social responsibility (CSR) disclosures in the presence of bad news (i.e., financial restatements). I do so by examining the link between CSR and (a) restatement likelihood and the (b) market-based consequences of restatement announcements. I find that restatements are lower (higher) for firms that are more (less) CSR responsible, consistent with the view that CSR-conscious firms adhere to a corporate culture that promotes ethical practices. In analyzing the market effects of restatements, I find that investors respond less (more) negatively to re

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Aier, Jagadison K., Joseph Comprix, Matthew T. Gunlock, and Deanna Lee. "The Financial Expertise of CFOs and Accounting Restatements." Accounting Horizons 19, no. 3 (September 1, 2005): 123–35. http://dx.doi.org/10.2308/acch.2005.19.3.123.

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We investigate whether the characteristics of chief financial officers (CFOs) are associated with accounting errors (using accounting restatements as a proxy). We investigate several metrics of financial literacy similar to those suggested for members of audit committees by the NYSE-NASD Blue Ribbon Committee. These metrics include years of work as a CFO, experience at another company, advanced degrees (like M.B.A.s), and professional certification (like a CPA). We use a logit model to test whether the likelihood of an earnings restatement is related to the above metrics of financial literacy

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Newton, Nathan J., Dechun Wang, and Michael S. Wilkins. "Does a Lack of Choice Lead to Lower Quality? Evidence from Auditor Competition and Client Restatements." AUDITING: A Journal of Practice & Theory 32, no. 3 (March 1, 2013): 31–67. http://dx.doi.org/10.2308/ajpt-50461.

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SUMMARY: We examine the relationship between auditor competition and the likelihood of financial restatements that occur as a result of failures in the application of generally accepted accounting principles (GAAP). Policy makers and audit market participants have expressed concern that the current level of auditor competition is low, resulting in a negative impact on audit quality. However, we find that restatements are more likely to occur in metropolitan statistical areas (MSAs) that have higher auditor competition. The association between audit market competition and restatements is statis

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Ragothaman, Srinivasan, and Angeline Lavin. "Restatements Due to Improper Revenue Recognition: A Neural Networks Perspective." Journal of Emerging Technologies in Accounting 5, no. 1 (January 1, 2008): 129–42. http://dx.doi.org/10.2308/jeta.2008.5.1.129.

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ABSTRACT: The Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin No. 101 (SEC 1999) in an attempt to curb improper revenue recognition practices. Nonetheless, revenue restatements and the subsequent earnings restatements have continued unabated. Our goal is to contribute to the emerging technologies literature by applying the neural networks methodology to the study of revenue restatements. We also compare the results of the neural network classification with classifications obtained from multiple discriminant analysis (MDA) and logistic regression (Logit) models. Six fi

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Oradi, Javad, and Javad Izadi. "Audit committee gender diversity and financial reporting: evidence from restatements." Managerial Auditing Journal 35, no. 1 (January 6, 2019): 67–92. http://dx.doi.org/10.1108/maj-10-2018-2048.

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Purpose The purpose of this paper is to investigate the association between gender diversity on the audit committees and the incidence of financial restatements. Design/methodology/approach Using a sample of 683 firm-year observations from Iranian listed companies for the period 2013 to 2017, this paper uses a logistic regression model to examine a research hypothesis related to the association between the presence of female members on the audit committee and the incidence of financial restatements. Findings After controlling for other restatement-related factors, the authors find that the pre

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Wang, Haiping, and Jing Zhang. "Securitizations and accounting restatements." Asian Review of Accounting 26, no. 4 (December 3, 2018): 571–94. http://dx.doi.org/10.1108/ara-10-2017-0151.

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Purpose The purpose of this paper is to establish a direct link between securitizations and accrual-based earnings management by investigating whether financial statements in the periods of securitizations are more likely to be restated at a later time. In addition, this study examines whether the association between securitization and accounting restatements is more pronounced in the pre-financial crisis period and for banks with less independent or industry-specialized auditors. Design/methodology/approach This study covers a sample of bank holding companies with restatement information betw

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Zahedi, Javad, and Ali Ramezani. "Competition in Industries, Corporate Governance; and Financial Reporting Quality." Journal of Management and Accounting Studies 3, no. 03 (July 19, 2019): 56–62. http://dx.doi.org/10.24200/jmas.vol3iss03pp56-62.

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The present study aimed to investigate the impact of product market competition; corporate governance accounting restatements of the firms listed on TSE. This study applies accounting restatement criterion for identification of low quality of reported accounting information in past financial statements of the firms listed on TSE. For this purpose, according to literature and institutional environment we select a set of most important corporate governance mechanisms include ownership concentration, board of directors independence and audit firm size associated with some control variable include

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Watson, Shaun, and Johan Coetzee. "The Impact Of Forced Financial Restatements On The Share Prices Of JSE Listed Firms." International Business & Economics Research Journal (IBER) 11, no. 12 (November 29, 2012): 1383. http://dx.doi.org/10.19030/iber.v11i12.7417.

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This study investigates the effect of forced financial restatements on the share prices listed on the Johannesburg Stock Exchange (JSE). An event study methodology is used to examine the share price reaction of 34 firms that forcefully restated their results following a GAAP Monitoring Panel review. The results indicate that the equity of 79.1 per cent of the firms decreased as a result of the restatement. The average standardised abnormal returns for 55.9 per cent of these firms were also found to be negative. The study further finds that the volume of shares traded directly following the ann

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Draeger, Michelle, Don Herrmann, and Bradley P. Lawson. "Changes in Audit Quality under Auditing Standard No. 5." Accounting and the Public Interest 16, no. 1 (December 1, 2016): 57–83. http://dx.doi.org/10.2308/apin-51676.

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ABSTRACT We examine the impact of Auditing Standard No. 5 (AS5) on audit quality. Prior research suggests a reallocation of resources toward higher-risk clients with no overall change in audit quality associated with the adoption of AS5. However, using financial restatements as our proxy for audit quality, we find the likelihood that financial statements are subsequently restated decreases in the AS5 period. These results are robust to several additional analyses. In addition to testing the occurrence of a restatement event, our results indicate that the duration of the restated period decreas

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El-Gazzar, Samir M., and Philip M. Finn. "Restatements and accounting quality: a comparison between IFRS and US-GAAP." Journal of Financial Reporting and Accounting 15, no. 1 (April 10, 2017): 39–58. http://dx.doi.org/10.1108/jfra-10-2015-0090.

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Purpose This paper aims to examine whether sanctioning adoption of IFRS for US firms would produce accounting information of the same quality as those produced under US Generally Accepted Accounting Principles (GAAP). This is a timely research since the Securities and Exchange Commission (SEC; 2014) has asked for further review. Design/methodology/approach This study uses restatements of financial statements made by a sample of foreign firms listed on US stock exchanges using International Financial Reporting Standards (IFRS) in comparison to a control sample of US firms using US GAAP during t

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Othman, Intan Waheedah, Richard Slack, and Rebecca Stratling. "The Likelihood of Forced Financial Restatement: The Case of Malaysia." 11th GLOBAL CONFERENCE ON BUSINESS AND SOCIAL SCIENCES 11, no. 1 (December 9, 2020): 144. http://dx.doi.org/10.35609/gcbssproceeding.2020.11(144).

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Forced restatement is the corrections made to published financial statements as prompted by the auditors or regulators due to non-compliance with the Generally Accepted Accounting Practices (GAAP) (Palmrose and Scholz, 2004). Forced restatements that are due to aggressive financial irregularities, lead to the impairment of investors' confidence on the quality of financial reporting, increase investors' concerns on managerial opportunistic decision-making, and cause substantial losses to shareholders. Forced restatement creates great concern, not only in developed countries, but also in develop

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Pyzoha, Jonathan S. "Why do Restatements Decrease in a Clawback Environment? An Investigation into Financial Reporting Executives' Decision-Making during the Restatement Process." Accounting Review 90, no. 6 (February 1, 2015): 2515–36. http://dx.doi.org/10.2308/accr-51049.

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ABSTRACT Prior archival studies find that firms that voluntarily adopted clawback policies have experienced a reduction in restatements. I experimentally examine this outcome by investigating the influence of two key factors (i.e., executive compensation structure and auditor quality) on financial reporting executives' (hereafter, “executives”) decision-making regarding a proposed restatement that will lead to a clawback of their incentives. I find that executives (i.e., CFOs, controllers, and treasurers) facing a lower quality auditor are less likely to agree with amending prior financial sta

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Rasyid, Ardiansyah, and Cenik Ardana. "Corporate governance, audit firm size and restated financial statement in Indonesia stock exchange." Corporate Board role duties and composition 10, no. 2 (2014): 77–84. http://dx.doi.org/10.22495/cbv10i2art6.

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This research aims to describe the corporations to take restatement in financial statement such as, corporate governance implementation and size of Audit Firm. Corporate Governance and size of Audit Firm are involved in auditing process. Theoretically, those influence the quality of financial statement. The occurrence of restatement of financial reporting is as a proxy for a lower of financial statement quality. Hence, corporate governance and size of Audit Firm should prevent from restated financial statement. The result of this research describe that number of independent commissioner and nu

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Qasem, Ameen, Norhani Aripin, and Wan Nordin Wan-Hussin. "Financial restatements and sell-side analysts' stock recommendations: evidence from Malaysia." International Journal of Managerial Finance 16, no. 4 (April 2, 2020): 501–24. http://dx.doi.org/10.1108/ijmf-05-2019-0183.

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PurposeThe purpose of this paper is to examine the influence of financial restatements on the sell-side analysts' stock recommendations.Design/methodology/approachThe sample of this study is based on a dataset from a panel of 246 Malaysian public listed companies for the period 2008 to 2013 (651 company-year observations). This study employs feasible generalized least squares regression.FindingsThis study finds a negative and significant relationship between restated companies and sell-side analysts' stock recommendations, which means that sell-side analysts issue less favorable stock recommen

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Lobo, Gerald J., and Yuping Zhao. "Relation between Audit Effort and Financial Report Misstatements: Evidence from Quarterly and Annual Restatements." Accounting Review 88, no. 4 (February 1, 2013): 1385–412. http://dx.doi.org/10.2308/accr-50440.

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ABSTRACT We identify two research design issues that explain the inconsistency between the theoretically predicted negative relation between audit effort and misstatements (measured using restatements) and empirical findings. First, auditor risk adjustment behavior induces an upward bias in the association between audit effort and restatements. Second, the theoretical prediction applies only to audited financial reports (i.e., annual reports) and not to unaudited reports (i.e., interim quarterly reports). Comingling restatements of audited with unaudited reports introduces an additional upward

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Wei, Jo-Ting. "Financial Reporting Material Misstatements, Earnings Conservatism and Managerial Replacement Decisions." International Journal of Business and Economic Sciences Applied Research 14, no. 1 (June 2021): 7–21. http://dx.doi.org/10.25103/ijbesar.141.01.

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Purpose: Based on signal theory and legitimacy theory, this paper examines whether firms with financial reporting misstatements (restatements) would prefer conservative financial reporting to send signals regarding their determinants of improving financial reporting credibility and legitimate organizational image in Taiwan. This paper further examines whether these firms reduce the demand for conservative financial reporting after replacing managers in the reveal of restatements.

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Demirkan, Sebahattin, and Ross D. Fuerman. "Re-evaluating the effectiveness of auditing standard no. 2: longitudinal analysis of restatements and the outcome of auditor litigation in lawsuits filed from 1996 to 2009." Corporate Ownership and Control 11, no. 2 (2014): 300–315. http://dx.doi.org/10.22495/cocv11i2c2p7.

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We provide evidence of the impact of Auditing Standard No. 2 (“AS 2”), issued pursuant to the Sarbanes-Oxley Act of 2002 (“SarBox”), on the outcome of auditors in financial reporting litigation. Specifically, we focus on the existence of financial restatements and how and why they affected the outcome of the auditor in the financial reporting lawsuits. Our longitudinal method subjected to year-by-year regression analysis 2,059 financial reporting lawsuits filed from 1996 to 2009. Our results indicate that restatements are positively associated with more severe outcomes for the auditor in lawsu

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Samba, Codou, Seemantini Madhukar Pathak, and Mengge Li. "Audit Committee Diversity and Financial Restatements." Academy of Management Proceedings 2016, no. 1 (January 2016): 16755. http://dx.doi.org/10.5465/ambpp.2016.16755abstract.

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Eng, Li Li, Ramesh P. Rao, and Shahrokh Saudagaran. "Earnings informativeness after financial statement restatements." International Journal of Revenue Management 6, no. 3/4 (2012): 221. http://dx.doi.org/10.1504/ijrm.2012.050385.

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Gertsen, Fred H. M., Cees B. M. van Riel, and Guido Berens. "Avoiding Reputation Damage in Financial Restatements." Long Range Planning 39, no. 4 (August 2006): 429–56. http://dx.doi.org/10.1016/j.lrp.2006.09.002.

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