Restatement of financial statements has new information to the market that shows not only the previous problems, but also is a forecast of company’s future problems. We examine the association between accounting restatements and the pricing of information risk. For this purpose we use the Fama and French three-factor model augmented with discretionary risk factors. In period of 2002 to 2010, we use 115 companies that are listed in Tehran Stock Exchange. We find a significant increase in the factor loadings on the discretionary information risk factor for restatement firms after a restatement announcement. Also, we find that there is a significant relationship between restatements initiated by a firm’s auditor, number of times a firm restates and information risk.
