The impact of the characteristics associated with the company on the possibility of the company to amend its financial statements - an applied study on the companies registered in the Egyptian Stock Exchange

Document Type : Original Article

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Accounting Department Faculty of Commerce University of Damanhour Damanhour Egypt

Abstract

    The study aimed to test the impact of some characteristics and the reasons related to the company which affect the possibility of the company to restate its financial statements using a sample of Egyptian companies listed in the stock market amounted to 172 companies during the period from 2011 to 2014. The study used the method of logistic regression analysis to test the hypotheses about the reasons and characteristics that lead the company to restate its financial statements.The results of the study showed that the Audit Committee and the Board of Directors have significant impact on the possibility of the Company restatement of  its financial statements. The lack of financial experience and the lack of independence of the Audit Committee and Board of Directors increase the likelihood that the Company will restate its financial statements. The study also showed evidence that there is a positive effect of the weakness of the internal control structure on the possibility of the company restatement of its financial statements .The increasing weaknesses and deficiencies in the structure of internal controls increases the likelihood that the company  will restate  its financial statements

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