Restated Financial Statements: an Empirical and Descriptive Study of the Frequency and Importance

This study investigates the following questions: which item of restatements have the most frequency? Are the nature and types of restatements different among years and industries? And، is there a significant difference between primary and restated figures? The results، based on 1603 firm-Years observations of listed companies in Tehran securities exchange، indicate that the most frequency of restatements have occurred in liabilities، car industry، and the year of 2005. The findings also show that the types and nature of the restatements are different through the years and industries. In addition there is a significant difference between primary and restated figures. Thus we suggest that researchers and analysts use restated data for financial reviews and analysis. Finally the significant difference of primary and restated amount of the «beginning retained earning» shows that the retroactive restatement must be extended beyond one year، especially for key items such as EPS and operating net income.