IDEAS home Printed from https://ideas.repec.org/a/eme/ijaimp/ijaim-07-2021-0154.html
   My bibliography  Save this article

Dividend payment and financial restatement: US evidence

Author

Listed:
  • Md. Borhan Uddin Bhuiyan
  • Fawad Ahmad

Abstract

Purpose - The purpose of this paper is to investigate the impact of financial restatement on corporate dividend payment. Firms that announce financial restatements rupture their corporate reputation and adversely affect investors’ confidence. Consequently, firms must attempt to regain lost reputation and market confidence. Design/methodology/approach - This study uses the US regulatory setting to examine the association between corporate dividend policy and financial restatement over the 2001–2017 financial years. Findings - The findings evidence a robust positive association between financial restatement and dividend payouts, indicating that firms pay higher dividends following the year of financial restatement. Several sensitivity tests were conducted to confirm the robustness of the findings. Originality/value - Prior research indicates that corporate dividend payouts enhance a firm’s reputation by reducing information asymmetry and providing a positive signal to investors regarding future financial performance. This study provides valuable evidence that dividend payout can be used as a channel for image restoration by firms with lost reputations because of financial restatement.

Suggested Citation

  • Md. Borhan Uddin Bhuiyan & Fawad Ahmad, 2022. "Dividend payment and financial restatement: US evidence," International Journal of Accounting & Information Management, Emerald Group Publishing Limited, vol. 30(3), pages 427-453, April.
    • Handle: RePEc:eme:ijaimp:ijaim-07-2021-0154
    DOI: 10.1108/IJAIM-07-2021-0154
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/IJAIM-07-2021-0154/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/IJAIM-07-2021-0154/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/IJAIM-07-2021-0154?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:ijaimp:ijaim-07-2021-0154. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.