Accounting Competence, Compensation, and the Aggressive Reporting Approach in Financial Statements Restatement

Managers with accounting competence have more skills in performing and concealing misstatement because they have experience in the field of auditing as a manager or partner. The purpose of this article is to examine the role of managers' accounting competence, compensation, and aggressive reporting financial statements restatement.The data of the companies listed in the Tehran Stock Exchange for the period of 2010 to 2022 have been extracted and the combined data regression and logit models has been used to test the research hypothesisThe results of hypothesis that show the effect of surplus compensation on financial statements restatement (audit fee) is confirmed (rejected). The hypothesis states that the accounting competence of managers has no significant effect on the financial statements restatement (audit fees). The results of the study that managers' accounting competence has a significant impact on the relationship between surplus compensation and financial statements restatement (audit fee) are confirmed. Finally, the results of the hypothesis indicate that the aggressive approach of financial reporting leads to a change in the relationship between the interactive effect of accounting competence and the excess compensation with financial statements restatement (audit fees).Based on the research findings, the restatement of financial statements in firms with managers motivated to receive surplus rewards is high. Auditors also increase audit fees in order to control managers' opportunistic behaviors and reduce the level of estimated risk.