Financial Restatements and Investment Efficiency: Mediating Role of Financial Constraints

Financial restatements leads to a financial constraint by decreasing the trust of investors and creditors.  Hence, managers with optimal investment are trying to change the users' perspective of financial statements. Regarding the role of financial restatements as an effective mechanism for resource constraints, and as a consequence, the increasing importance of investment efficiency, the present study examines the relationship between the refinement of financial statements and the efficiency of investment through financial constraints. Hypotheses have been investigated by use of samples including 170 companies listed in the Tehran Stock Exchange during the period 2011-2015 and multiple regression equations of integrated data. The findings of this study indicate that the mediation role of the financial constraint in the relationship between financial restatements and investment performance is not verified.