American Journal of Scientific Research ISSN 2301-2005 Issue 106 October, 2015, pp.4-13 http://www.americanjournalofscientificresearch.com Financial Restatements and Auditor Change: Evidence from Tehran Stock Exchange Mohammad Hossein Setayesh Associate Professor of Accounting in Shiraz University Javad Hayati Corresponding Auditor, Msc. Student in Accounting, Shiraz University E-mail: Javad_hayati3@yahoo.com Somayyeh Hosseini Nia Msc. in Accounting, Shiraz University E-mail: sommaye.hosseini69@gmail.com Golamreza Rezaei Ph.D. Student in Accounting and Young Research Club Islamic Azad University, Arsanjan Branch, Arsanjan, Iran Financial Restatements and Auditor Change: Evidence from Tehran Stock Exchange Abstract The purpose of this paper is to examine relationship between the financial restatements and the auditor change in listed firms of Tehran Stock Exchange. So this study tries to answer this question that: has financial restatement any impact on auditor change. We include 66 firms listed in Tehran Stock Exchange during the period 2006 to 2012 as our study sample. Multivariate logistic regression analysis was used to test research hypothesis. Statistical hypothesis test results indicate that there is not any significant relationship between financial restatements and its intensity and audit change. This result points to difference in structure of audit firm's choice of customer by Iranian audit firms. Keywords: financial restatements, financial restatements intensity, auditor change, the Tehran Stock Exchange. 1. Introduction According to theoretical concepts of financial reporting in Iran, financial statements is to provide classified information about financial position, financial performance of the business unit's financial flexibility for a wide range of users in making economic decisions. The main qualitative characteristics related to content of information, "relevancy" and "reliability" and main qualitative characteristics of information presentation is, "comparability" and "understandability". Without these characteristic information will not be useful or will have limited usefulness. Since properties of comparable and understandability, adds to information usefulness, so stability of accounting procedures employed in accounting practices and appropriate disclosure is necessary (Iran’s committee of accounting standards setters, 2009). So if there is an error or procedural changes in financial statements of the current period compared to the previous financial period or periods, financial restatement would be as a common tool to establish consistency and adequate disclosure of the information (Buloo et al, 2012). Financial