1.
Farzin Rezaei
– Islamic Azad University, Qazvin Branch, Tehran, Iran
2.
Seyed Mostafa Mahmoudi
– Islamic Azad University, Qazvin Branch, Tehran, Iran
Abstract
This study investigates the relationship between firm characteristics and financial restatements. A sample consisting of 900
year - firm during the period 2003 to 2011 was studied. The logistic regression was applied to test the hypothesis. In the first method, the
significant direction of relationship between the variables was examined. Using the backward method, an optimal model was introduced to
predict the financial restatements. To measure the accruals, the modified jones model was used by Dechow et al. The results show a negative
and meaningful relationship between the firm size and financial restatements. There is also a positive relationship between the financial
restatements with firms’ losses in a year before the statement, financing through the floatation and B/P ratio.
Keywords Financial Restatement, Firms Characteristics, Firms size, Financing, Firms Loss.
