The effect of accounting comparability on the quality of financial reporting and discretionary accruals

Objective The purpose of this study was to investigate the effect of comparability of financial statements on the quality of financial reporting and voluntary accruals in listed companies in Tehran Stock Exchange. Comparability makes managers aware of competing companies, industry trends and economic conditions as well as their impact on the company, leading to an increase in the quantity and quality of information about a company in the industryMethods Statistical population for collecting variables is listed companies listed in Tehran Stock Exchange between 2019 and 2010 but in the period between 2011-2018 which among 80 stock companies in total systematically sampled Statistically selected. Multivariate regression with combined data was used to test the hypotheses. For the purpose of the research, Di Franco et al. (2011) model was used to calculate the comparability variable and the model of Francis et al. (2005) was used to calculate the quality of reporting.Results The findings of the study indicate that comparability leads to an increase in the quality of financial statements, thus confirming the first hypothesis of the study. The results of the second hypothesis test show that voluntary accruals have a direct impact on stock returns, but investors do not pay attention to voluntary accruals when compared and have no effect on their investment and stock returns.Conclusion Since comparability leads to increased quality of financial statements, therefore, users of financial statements are advised to pay more attention to comparability.