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The purpose of this paper is to examine the influence of financial restatements on the sell-side analysts' stock recommendations.

The sample of this study is based on a dataset from a panel of 246 Malaysian public listed companies for the period 2008 to 2013 (651 company-year observations). This study employs feasible generalized least squares regression.

This study finds a negative and significant relationship between restated companies and sell-side analysts' stock recommendations, which means that sell-side analysts issue less favorable stock recommendations for restated companies.

The findings based on observations from an emerging economy complement the results of the US studies that analysts revise their earnings forecasts or recommendations downwards or drop coverage following financial restatements. The results of this study should be useful to capital market participants in understanding how analysts perceive and evaluate restated companies.

This paper expands the literature on financial restatements consequences in an emerging market which is largely unstudied. Prior research on analyst behavior towards restatements has focused on the consequences of restatements in terms of analyst following and forecast accuracy and dispersion. This study examines if and how the restatements affect the analysts' final output as reflected in the recommendation opinion, an area that has so far received little attention.

This paper aims to examine the extent of financial ratio communication from an agency theory perspective.

An empirical positivist approach is utilised to explore the predictors of disclosure within the 2007 annual reports of 300 Australian listed companies.

Overall, the extent of financial ratio disclosures is very low (5.3 per cent) with more extensive disclosures within the sub‐categories of share market measure, profitability and capital structure. A far lower liquidity and cash flow ratio information is reported. Larger firms with more dispersed share ownership provide more extensive financial ratio information than the others. Further, profit‐making firms and Big4 clients exhibit more extensive financial ratio disclosures. Resources firms present significantly lower incidents of financial ratio than the financials and services sector. Corporate governance and capital management initiatives do not have predictive properties.

Financial ratio disclosure, although important, is under‐researched. A comprehensive set of predictors are investigated. The findings highlight the need for Australian regulators to consider more explicit guidelines or mandatory requirements.