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In this article, we use post-Sarbanes-Oxley Act (SOX) restating sample companies to examine the effect of leverage on the probability of restatements. We also explore whether the level of board independence for restating firms has an impact on the probability of restatements. We further analyse the subsequent change of the firms' executive compensation after they experience these restating events.The results indicate that firms with large debt have a high probability of restating their financial reports, but the likelihood of restatement is reduced if the underlying bankruptcy risk is lower. Contrary to expectations, the results do not indicate that board independence is associated with the probability of restatement. Even restating firms did not appear willing to fortify board independence after restatements. Finally, it is found that having more directors on the board for a company may help to restrain its executive compensation after restatements.

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