Investigating the Effect of Accounting Comparability on Financial Reporting Quality and Tax Avoidance

This study investigated the effect of accounting comparability on financial reporting quality and tax avoidance. Accounting comparability improves information environment. Increased financial reporting transparency caused by increased accounting comparability provides users a better understanding of the information content of financial reports, furthermore it reduces the opportunistic behaviour of managers. Meanwhile in reporting financial information for tax purposes transparent and comparable information plays an important role in in tax decisions.In this study by focusing on on an important aspect of financial reporting environment, that is accounting comparability, we are supposed to investigate the effects it could have on financial reporting quality and tax avoidance. To do so we have sampled out 110 companies listed with stock exchange. We have used multiple linear regression models to test the hypotheses. Our findings are indicative of positive relation between accounting comparability and financial reporting. the financial statement comparability as a governance mechanism prevents managers opportunistic behaviors including tax avoidance. quality as well as negative relation between accounting comparability and tax avoidance which are both in accordance with the hypotheses. based on the results of this study, when the quality of financial reporting, high and lower tax avoidance and tax avoidance, the capacity of accounting comparison improves the ability of users to identify similarities and differences between economic phenomena. As a result, consumers choose the best financial information that makes decisions more effective.