The Effect of the Restatement of Financial Statements on Growth of Companies Listed in TSE

The purpose of financial reporting is to provide classified information for users of accounting information for economic decisions. In case of change in accounting procedure and modification of important accounting mistakes, it is essential to restate the financial statements to stabilize the procedure for appropriate disclosure of information. Annual adjustments are not worrisome, but awareness of unfair financial statements of the previous periods. Restatement of financial statements negatively influences the relevance and reliability of information available in financial statements. The purpose of this study is to address this problem that whether restatement of financial statements influence the growth of companies. This study used Q-twin ratio as a representative to test growth opportunities. The studied group included companies listed in TSE during 2008 to 2012. The sample consisted of 153 companies with at least one restatement; totally, 765 restated financial statements were reviewed. To calculate variables, the information available in TSE was used. To analyse results obtained from the study, the descriptive statistics as well as Excel and Eviews 7 software were used. Eventually, the hypothesis was tested. The results show that restatement of financial statements influence growth of companies.