Effects of Privatization on Accounting Restatements

This study investigates the impact of privatization on accounting restatements in the companies listed in the Tehran Stock Exchange, regarding the privatization implemented by the Privatization Organization. This has been promoted by examining a sample of 35 companies with more than 20 percent of privatized shares, in the Tehran Stock Exchange in the years 2003 to 2010. In this study regression analysis was developed to test of hypotheses, and Chow-Hausman tests were employed to select appropriate panel data model with fixed and random effects. In this analysis, the required indicators were examined by the data from two years before (2001) and after (2012) the privatization. The results of testing the hypotheses by the regression model with random effects showed that the privatization of companies’ shares reduced the number and the rate of restatements. Also, the results indicated that accounting restatements were significantly reduced by growing the share of privatized ownership.