Restatements sully future credibility: Study

Research by SMU and Boston College academics found that stock swings surrounding an earnings release, when the company takes little remedial action, are more muted for an average of 11 quarters after a material statement. The researchers, who studied thousands of restating companies from the late 1990s through 2008, interpreted that to mean investors are less trustworthy of the results reported by such companies.

Source
Wall Street Journal