Abstract

: Financial Restatements as clear and transparent evidence of not reliable past financial statements and Low quality of reporting. The purpose of this study is to investigate effective the managerial ability on financial restatements and incentive lies in financial restatements .By using a sample comprising from companies who took action to revise their financial statements and using a model for attaining the objectives determined for classification of companies, there were selected 87 companies (over than 119 observations of companies- year) in the opportunistic sample and 224 companies (over than 732 observations of companies- year) in the non-opportunistic sample as final sample and for testing the hypotheses, there was chosen a time period of 11 years (2002- 2012); and by using Tobit regression for calculating the managerial ability and multiple regression for investigating the relation between variables, its results indicate that there is only a significant relation between managerial ability and financial restatements when the type of behavior is opportunistic and there is no significant correlation in other types of non-opportunistic behaviors (increasing non-opportunistic and decreasing non-opportunistic).