Abstract
Financial statement comparability enables weighing the similarities and differences in financial performance between firms. Prior studies mainly focus on the role of accounting standards in the production of comparability, but the role of economic agents has been largely overlooked. We find that a firm’s audit committee size and financial expertise affect its financial statement comparability. Financial information tends to be more comparable among industry peers when audit committees are larger and more members have financial and accounting expertise. The effect of audit committee expertise on comparability is stronger for firms with less independent and smaller boards, for firms with non-Big 4 auditors and for firms with CEOs serving as the chairperson of the boards.
Original language | English |
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Pages (from-to) | 2361-2395 |
Number of pages | 35 |
Journal | Accounting and Finance |
Volume | 60 |
Issue number | 3 |
Early online date | 8 Mar 2018 |
DOIs | |
Publication status | Published - 1 Sept 2020 |
Keywords
- Audit committee
- Corporate governance
- Financial statement comparability