A number of companies recently restated their financial statements to correct for misapplication of the accounting standard for derivative accounting, SFAS No. 133. The FASB's initial proposal for this standard was met with opposition from the business community, who argued that it would increase earnings volatility. Using a sample of non-financial companies that restated their financial statements to correct for derivative accounting, we examine whether the misapplication of the standard - and therefore the restatement - was motivated by companies' desire to avoid earnings volatility. Using an ex-ante measure of earnings smoothing (i.e. the degree of earnings smoothing prior to the restatement years), we find companies that were more likely to be "earnings smoothers" were more likely to misapply SFAS 133.