The purpose of this paper is to investigate whether firms with the same Big Four audit firm and operating within the same legal system disclose more comparable non-GAAP measures. Using a sample of 23,436 pairs of European firms, the study hand-collected information on non-GAAP measures reported in the statement of comprehensive income. The results show that firms sharing the same Big Four auditor or belonging to the same legal system are positively and significantly associated with higher non-GAAP comparability. This study contributes to the literature on accounting comparability and provides new insights supporting the IASB’s recent activities on the Primary Financial Statements project, particularly the Exposure Draft ED/2019/7 General Presentation and Disclosures.
The role of the Big Four audit firms and the legal system in non-GAAP comparability
M. Prisco
2022
Abstract
The purpose of this paper is to investigate whether firms with the same Big Four audit firm and operating within the same legal system disclose more comparable non-GAAP measures. Using a sample of 23,436 pairs of European firms, the study hand-collected information on non-GAAP measures reported in the statement of comprehensive income. The results show that firms sharing the same Big Four auditor or belonging to the same legal system are positively and significantly associated with higher non-GAAP comparability. This study contributes to the literature on accounting comparability and provides new insights supporting the IASB’s recent activities on the Primary Financial Statements project, particularly the Exposure Draft ED/2019/7 General Presentation and Disclosures.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
