The determinants of accounting comparability around the world

Jonathan Ross, Linna Shi, Hong Xie

Research output: Contribution to journalArticlepeer-review

11 Scopus citations

Abstract

Purpose: The purpose of this paper is to investigate country-level and firm-level determinants of within-country accounting comparability for 16 European Union countries plus the USA in the post-International Financial Reporting Standards adoption period. Design/methodology/approach: The authors use ordinary least squares regression to test the hypotheses with a correction for heteroscedasticity. Findings: The authors find that firms in countries with rules-based accounting, higher quality public auditor work environments, stricter enforcement of accounting standards and more reliance on equity-market financing have higher within-country comparability with each other. At the firm-level, the authors find that firms which are larger, engage in less earnings management, and have lower return-on-asset volatility have higher within-country comparability with each other. Research limitations/implications: The authors use one measure of accounting comparability. Alternative measures of accounting comparability could test the hypotheses more completely. Practical implications: The findings of the paper may help the regulators make more efficient policies to establish an efficient financial market within their country. Originality/value: The paper is the first, to the authors’ knowledge, to identify country-level and firm-level determinants of within-country accounting comparability. It contributes to the accounting literature by completing the theory of international accounting comparability from the within-country perspectives, as prior literature focuses on the cross-country perspective of international accounting comparability.

Original languageEnglish
Pages (from-to)69-88
Number of pages20
JournalAsian Review of Accounting
Volume28
Issue number1
DOIs
StatePublished - Jan 22 2020

Bibliographical note

Publisher Copyright:
© 2019, Emerald Publishing Limited.

Keywords

  • Accounting comparability
  • Around the world
  • International Financial Reporting Standards

ASJC Scopus subject areas

  • Accounting
  • Finance

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