Investigating of the Impact of Board Characteristics on Financial Restatement in Companies Listed in Tehran Stock Exchange

The main purpose of this paper is empirically investigating the impact of board characteristics on financial restatement of listed companies in Tehran stock exchange (TSE). Therefore، in this study a sample of 97 from the listed companies in TSE between 2004 to 2010، are selected. The magnitude of restatement is measured by amount of net income restatement; and board size، the percentage of independent directors and the chairman and CEO/chair duality are selected as board characteristics. In conducting this research، two main hypothesises are proposed. For testing the hypotheses logistic and multiple linear regression analysis are conducted. Results show that there is no relationship between board characteristics and restatement event. Also، board size does not have significant relationships with magnitude of restatement; however، there is a significant negative relationship between the percentage of non-executive directors and separation of the chairman and managing director/chair duality with magnitude of restatement. In other words، the more the independent board، the lesser restatement magnitude.