The Effect of Life Cycle on Financial Statement Comparability by Consideration Moderating Role of the Information Asymmetric

Document Type : Research Paper

Authors

1 Ph.D.Candidate. Department of accounting, Faculty of Administrative Sciences and Economics, University of Isfahan, Isfahan, Iran

2 Prof. Department of accounting, Faculty of Administrative Sciences and Economics, University of Isfahan, Isfahan, Iran

3 Associate prof. Department of accounting, Faculty of Administrative Sciences and Economics, University of Isfahan, Isfahan, Iran

10.22051/jera.2024.47241.3246

Abstract

Objective: The purpose of the research is to investigate the effect of different stages of the firms's life cycle on the comparability of financial statements with regard to the role of information asymmetry.

Methods: The statistical the population of this study are all companies listed in Tehran Stock Exchange, in which 100 companies in the period 2012 to 2023 have been selected by systematic elimination method. For data analysis and hypothesis testing, multivariate regression model based on panel data regression is used.

Results: The findings of the research showed that the comparability of financial statements is higher in the maturity stage than in other stages. Also, the findings showed that despite high information asymmetry, firm in the maturity stage are more inclined to present comparable financial statements.

Conclusion: Comparability enhances the ability of users of financial statements to evaluate a company's performance against its peers by highlighting the similarities and differences between business units that arise due to the existence of similar economic conditions. However, focusing on comparability without assessing whether comparability changes throughout the company's life cycle provides a consistent perspective. In the maturity stage compared to other stages of the life cycle, the company has a strong organizational structure, skilled workforce, and strong internal control. This issue causes the degree of comparability to be different in different stages of the company's life cycle.

Keywords

Main Subjects

Empirical Research in Accounting

Articles in Press, Accepted Manuscript
Available Online from 11 September 2024

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History

  • Receive Date: 19 May 2024
  • Revise Date: 22 July 2024
  • Accept Date: 11 September 2024

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