Financial statement similarity

• 成果类型: Article
• 署名作者: Brown, Stephen V.; Ma, Guang; Tucker, Jennifer Wu
• 署名单位: University of Connecticut; Rutgers University System; Rutgers University New Brunswick; State University System of Florida; University of Florida
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12885
• 发表日期: 2023
• 页码: 2577-2615
• 关键词: accounting comparability; Private Firms; earnings; EFFICIENCY; QUALITY; spillovers; complexity; INVESTMENT; prediction; management

摘要

We propose financial statement similarity as a measure of financial reporting comparability. The firm-pair version of our measure reflects the degree to which two firms report similar relations within their financial statement items; this version can help managers and market participants identify peer firms. The firm-year version of our measure reflects the degree to which a firm reports financial statement relations that are similar to other members of its industry; this version can help market participants, regulators, and auditors screen firms for further attention. Our measure uses the presence and amounts of almost all financial items reported by a firm. We validate our measure in four sets of analyses to establish concurrent validity and in three sets of analyses to establish predictive validity. In all these tests, we contrast our measure with the comparability measure in De Franco et al. (2011) and a multivariate measure that considers the presence, but not amounts, of financial statement items. Our measure outperforms the alternatives and can be a useful tool for users.