مقایسه پذیری حسابداری، تلاش و حاصل کار حسابرس Accounting Comparability, Audit Effort, and Audit Outcomes

1.Introduction “Given the costs of producing, auditing, and processing financial information, it is likely that comparability” is an essential financial reporting practice (Kothari et al. 2010, 260). This paper studies the implications and benefits of accounting comparability for external auditing. Comparability among peer firms in the same industry reflects the similarity and the relatedness of firms’ operating environments and financial reporting behaviors, and presumably helps lower the costs of information processing and testing. Thus, auditability may be improved when a client firm’s comparability is higher. This study investigates whether accounting comparability is useful to auditors in terms of audit effort and audit outcomes. Comparability is defined as the “quality of information that enables users to identify similarities in and differences between two sets of economic phenomena” (Financial Accounting Standards Board (FASB) 2010, CON2-6). If a company’s financial information is more comparable with that of peer companies, the marginal costs of information acquisition and processing of peer companies are reduced (Sohn 2016; Engelberg et al. 2017) for investors (such as shareholders and creditors) and specialized monitors (such as financial analysts and auditors).1 Therefore, investors and specialized monitors are better able to evaluate the company’s performance (i.e., lower estimation risk), as peer-based comparability helps improve the valuation accuracy of analyzing the business fundamentals of the company (Young and Zeng 2015; Sohn 2016). An individual firm’s business operations are shaped by both firm-specific factors and industry common factors that affect itself and peer firms (Gong et al. 2013). When common economic factors explain a large amount of the similarity and/or dissimilarity of firms in an industry, these firms have higher comparability. Cognitively, it is difficult for individuals to process information signals that are unique to an entity. As a result, individuals tend to underestimate idiosyncratic information in judgments and decision making (Lipe and Salterio 2000). A higher degree of comparability lowers the costs of information acquisition, reduces information asymmetry, and increases the understandability and decision usefulness of financial information (De Franco et al. 2011; Kim et al. 2013). Thus, comparability mitigates the dependence on information from management reports (Gong et al. 2013). Taken together, comparability is an attribute that may enhance the utility of financial statements. Information comparability contributes to externality gains (De Franco et al. 2011; Kim et al. 2013). It can provide information efficiency and knowledge spillovers achieved by a single firm in the auditing engagement. Given the role of externalities in expanding auditors’ available information set, the study of information transfers in audit engagements provides additional insight into the economic benefits of audit efficiency and accuracy. Auditors are better able to understand how economic transactions are translated into accounting numbers for clients with a higher degree of comparability. This enhanced knowledge set facilitates auditors’ ability to attest to clients’ accounting results and thus improves audit quality.