Investigating the Relationship between Restatement of Fixed Profitability Financial Statements

From the investors' point of view, restatement of financial statements not only reflects the performance problems of the past period, but also is a kind of forecast of future problems for the company and its management and deprives investors of confidence in the credibility of management and quality of reported profits. Therefore, based on this argument, the purpose of the present study is to investigate the relationship between restatement of stable financial statements and profitability of companies listed on the Tehran Stock Exchange. The statistical sample consists of 86 companies listed on the Tehran Stock Exchange from 2012 to 2017. The results of the research hypotheses show that companies with lower resubmitted revenues have higher profit stability, and the second hypothesis suggests that companies with lower rescheduling costs have higher profit stability. Also, the third hypothesis of the research indicates that companies with less annual adjustments have higher profit stability. The fourth hypothesis shows that companies with less restatement of current assets and liabilities have higher profitability.