Reaction of Capital Markets on the Quality of Financial Information after Financial Statements Restatement in Companies Listed on Tehran Stock Exchange

In this research the status of the quality of financial information in the period after the financial statements restatement has been studied. Also, the reaction of the capital market to the restatement and the effect of this reaction on the quality of financial information after the financial statements restatement have been studied. In this regard, the information of 86 companies admitted to the Tehran Stock Exchange was extracted in the period of 2012 to 2022. The results of investigations using multivariate regression and combined data analysis method show that financial statements restatement has an effect on improving the quality of financial information. Other results show that the negative reaction of the capital market to the restatement, has not affected the relationship between the financial statements restatement and the quality of financial information. Therefore investors are advised to consider the occurrence of financial statements restatement as a sign of the quality of the company's financial information which has directly had significant effects on reducing the cost of capital and company risk and increasing the liquidity of shares and Avoid investing in companies with repeated financial statements restatement due to its negative consequences on the quality of their financial information.