The effect of Economic Policy Uncertainty on the Comparability of Financial Statements: The Moderating Role of Managerial Ability

The Effect of Financial Statement Comparability  will increase the financial reporting quality and reduce information asymmetry. This component may be influenced by macroeconomic and political factors; In this situation, the ability and tact of company managers can be effective in balancing the effect of economic policy uncertainty on the comparability of financial statements. From this point of view, the current research aims to investigate the effect of uncertainty of economic policies on the comparability of financial statements, emphasizing the moderating role of management ability.

The paper covers the period from 2013 to 2022, with a statistical sample of 124 companies admitted to the Tehran Stock Exchange. The research hypotheses were tested using the regression least squares method.

Economic policy uncertainty has a negative and significant effect on the comparability of financial statements. On the other hand, the ability of managers reduces the effect of the negative relationship between the uncertainty of economic policies and the comparability of financial statements..

Comparability of Financial Statements is one of the factors that increase the usefulness of financial information provided in financial statements; This component decreases with the increase of economic policy uncertainty. But efficient managers, in an effort to maintain their reputation and considering the risk of lawsuits in the conditions of economic policy uncertainty by avoiding opportunistic behavior, have provided more quality and extensive information to the stakeholders and thus efficient managers weaken the negative effect of economic policy uncertainty on the comparability of financial statements.

Contribution:

 The present paper shows the evidence of accounting information management in order to reduce the comparability of financial statements in the conditions of economic policy uncertainty by inefficient and opportunistic managers.