Organizational characteristics that influence retrospective financial restatements in Brazil
Abstract
The article aims to verify the influence of the organizational structure and business complexity on the retrospective financial restatements of Brazilian public companies. To this end, 205 publicly-traded companies were analyzed through the reporting of their annual financial statements, between the fourth quarter of 2016 and the second quarter of 2017.Data analysis through Logit and Probit regressions indicates that the business complexity may lead to a greater likelihood of reporting comparative restatements. However, no relationship was identified between retrospective financial restatement and ownership concentration level, corporate governance quality, financial performance and indebtedness. Furthermore, the explanatory notes analysis on the nature of the financial restatement, amount and applicable standard, indicated that 101 companies carried out some type of adjustment in the comparative balance, mainly due to errors. These results contrast previous literature that considers earnings management as the main motivation for the retrospective financial restatements.
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References
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