An empirical investigation of earnings restatements by Australian firms

Goodwin, J and Ahmed, K 2006, 'An empirical investigation of earnings restatements by Australian firms', Accounting and Finance, vol. 47, no. 1, pp. 1-22.


Document type: Journal Article
Collection: Journal Articles

Title An empirical investigation of earnings restatements by Australian firms
Author(s) Goodwin, J
Ahmed, K
Year 2006
Journal name Accounting and Finance
Volume number 47
Issue number 1
Start page 1
End page 22
Total pages 21
Publisher Blackwell Publishing
Abstract From 1970 to 2003, we document earnings restatements for the top 500 Australian firms, examine the characteristics of restating firms, and test whether restatements are value relevant. Of the 195 earnings restatements, 49 per cent decrease prior-period earnings (negative restatements). Negative restatements are relatively larger than positive restatements. We identify three reasons for earnings restatements; namely, accounting policy changes, revision of estimates, and errors and unknown, and they comprise 49, 40 and I I per cent of the sample, respectively. Restatement firms have higher growth opportunities and are smaller than non-restating firms from the same industry. Restatements are generally negatively associated with market and non-market value.
Subject Financial Accounting
DOI - identifier 10.1111/j.1467-629x.2006.00196.x
Copyright notice © 2008 Accounting and Finance Association of Australia and New Zealand
ISSN 0810-5391
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