The Effect of Financial Statement Transparency on the Likelihood of Restatement

• In Event: Financial Statement and Earnings Management Disclosures

Abstract

I explore the impact financial statement transparency has on the probability of financial statement restatement. Information theory suggests that a strong information environment increases accounting quality. Using financial statement transparency as a proxy for the information environment, I find that transparency is associated with a lower probability of financial statement restatement.

Author

• Paige D Bressler, College of Charleston