The Effect of Financial Statement Comparability on Comment Letters
This paper uses the data of China's A-share listed companies from 2014 to 2020 to examine the effect of financial statement comparability on comment letters.The empirical results show that the higher the financial statement comparability,the lower the probability of receiving the exchange's annual report comment letters.The mechanism tests reveal that in companies with high information processing costs and weak external monitoring,financial statement comparability has a more prominent effect on reducing the probability of receiving comment letters.In the further analysis,we employ text analy-sis to examine the impact of financial statement comparability on the severity of comment letters and find that lower financial statement comparability is as-sociated with higher severity of comment letters.Finally,we find that financial statement comparability reduces the probability of regulatory errors and im-proves the accuracy of regulatory inquiries.This paper provides empirical evidence on the effect of financial statement comparability on comment letters un-der the background of industry-based regulation,as well as a theoretical basis for listed firms'practices of improving financial statement comparability.
万方数据
维普
