A Survey of Empirical Approaches to Measure the Financial Statements Comparability

Subject Areas : Financial accounting

Ghader Babaei ¹

1 - Department of Accounting, Aza.C., Islamic Azad University, Azarshahr, Iran

Received: 2024-08-04 Accepted : 2025-08-11 Published : 2025-10-07

Keywords: Financial Statements Comparability, Measurement, Accounting Empirical Research.,

Abstract :

Financial statement’s comparability has been the subject of significant interest in empirical financial accounting research. Recent literature, particularly that following De Franco et al.’s (2011) influential study, has focused on utilizing the output of the financial reporting process to measure accounting comparability. The main aim of this research is to investigate and analyze the theoretical framework and the method of measuring the criteria of output-based measures of financial statements comparability. In this study, while presenting the classification of approaches for measuring the comparability of financial statements, three models for measuring the comparability of financial statements, including De Franco et al.'s (2011) model based on the relationship between accounting outputs and stock returns, Yip and Yang's (2012) model based on the similarity and dissimilarity of financial reports and model of Babaei et al. (2019) based on relative valuation theory has been carefully examined and important methodological points of each have been discussed. As a whole, our study attempts to guide empirical researchers who (plan to) undertake studies on accounting comparability in selecting relevant topics and choosing adequate approaches to measurement.

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