Skip to main content

An empirical investigation of earnings restatements by Australian firms

Buy Article:

$51.00 plus tax (Refund Policy)



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 11 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.

Keywords: Earnings restatements; Firm characteristics; M40; M41; Value relevance

Document Type: Research Article


Affiliations: 1: School of Business, La Trobe University, Bundoora, 3086, Australia 2: School of Accounting and Law, RMIT University, Melbourne, 3000, Australia

Publication date: March 1, 2007

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Partial Open Access Content
Partial Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more