Impacts of Management Ability on of Financial Statement Comparability

Abstract

Objective: This study examines the impacts of management ability on financial statement comparability in 120 firms listed in the Tehran Stock Exchange, during 2005-2017. Method: In this study, the measure developed by Demerjian et al. (2012) was used to assess management ability, and the measure introduced by DeFranco et al. (2011) was used to specify accounting comparability. Panel data and multivariate regression models were taken to test the study hypothesis and analyze the results. Also, two alternative proxies for financial statement comparability were specified to re-test the hypothesis. Result: Findings from the above tests verified the findings of the study showing that the management ability has positively significant impact on financial statement comparability. Conclusion: This study suggests that firms can improve their financial statement comparability by employing higher quality managers.

Keywords

• comparability
• management ability
• managerial efficiency