FINANCIAL RESTATEMENTS AND DIVIDEND POLICY:
EVIDENCE IN THE BRAZILIAN MARKET

Name: LAÍSE MASCARENHAS BALLARINI

Publication date: 20/07/2022
Advisor:

Name	Role
VAGNER ANTONIO MARQUES	Advisor *

Examining board:

Name	Role
DONIZETE REINA	Internal Examiner *
VAGNER ANTONIO MARQUES	Advisor *

Summary: The purpose this paper was to analyze the association between financial restatement and
dividend policy in the Brazilian capital market. Using an econometric approach, we
analyzed a sample of 275 Brazilian listed companies from 2010-2020. Ours results
showed that the firms with higher ROE’s volatility has more probability to restate
financial statements. We observe a negative relationship between dividend yields and the
financial restatement, which according the hypothesis of the greater information
asymmetry is associated with lower dividend distribution. Finally, we founded that there
is a positive and significant association between payout and financial Restatement. This
results suggests a compensation of dividends retained on the years after financial
restatements. In complementary analysis, we observed a dynamic effect of past dividends
explain future dividends and restatements have moderate effect with independents
variables and dividends. The results have the potential to contribute to managers, auditors,
investors, regulators, auditors and members of corporate governance, since with empirical
evidence that the restatements of the financial statements are indications of potential
information asymmetry and expropriation of shareholders when the manager retains
profits without projects with better expected cash flow. In addition, it has the potential to
contribute to the assessment of risk and valuation, especially for techniques that we
consider dividends with input for the estimation of the firm´s value. Also, contribute to
reinforce the association of theirs variables to explain the dividend policy.

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