Does financial statement comparability mitigate corporate frauds in an emerging market? Evidence from China

References

• Agrawal, A., and S. Chadha. 2005. “Corporate Governance and Accounting Scandals.” Journal of Law and Economics 48 (2): 371–406. doi:10.1086/430808.
   Web of Science ®Google Scholar
• Ahn, H., and C. H. Sonu. 2021. “(2021). The Effect of Audit Partner Style on Financial Statement Comparability.” Asia-Pacific Journal of Accounting & Economics 28 (1): 44–70. doi:10.1080/16081625.2020.1844999.
   Web of Science ®Google Scholar
• Allen, F., J. Qian, and M. Qian. 2005. “Law, Finance, and Economic Growth in China.” Journal of Financial Economics 77 (1): 57–116. doi:10.1016/j.jfineco.2004.06.010.
   Web of Science ®Google Scholar
• Armstrong, C. S., D. F. Larcker, G. Ormazabal, and D. J. Taylor. 2013. “The Relation between Equity Incentives and Misreporting: The Role of Risk-taking Incentives.” Journal of Financial Economics 109 (2): 327–350. doi:10.1016/j.jfineco.2013.02.019.
   Web of Science ®Google Scholar
• Basu, S. 1997. “The Conservatism Principle and the Asymmetric Timeliness of Earnings.” Journal of Accounting and Economics 24 (1): 3–37. doi:10.1016/S0165-4101(97)00014-1.
   Web of Science ®Google Scholar
• Becker, G. 1968. “Crime and Punishment: An Economic Approach.” Journal of Political Economy 76 (2): 169–217. doi:10.1086/259394.
   Web of Science ®Google Scholar
• Bordeman, A., P. B. Shane, D. B. Smith, and S. Zhang. (2019). Financial reporting comparability and costs of seasoned equity offerings. SSRN Working Paper.
   Google Scholar
• Brochet, F., A. D. Jagolinzer, and E. J. Riedl. 2013. “Mandatory IFRS Adoption and Financial Statement Comparability.” Contemporary Accounting Research 30 (4): 1373–1400. doi:10.1111/1911-3846.12002.
   Web of Science ®Google Scholar
• Burns, N., and S. Kedia. 2006. “The Impact of Performance-based Compensation on Misreporting.” Journal of Financial Economics 79 (1): 35–67. doi:10.1016/j.jfineco.2004.12.003.
   Web of Science ®Google Scholar
• Burns, N., S. Kedia, and M. Lipson. 2010. “Institutional Ownership and Monitoring: Evidence from Financial Misreporting.” Journal of Corporate Finance 16 (4): 443–455. doi:10.1016/j.jcorpfin.2010.06.001.
   Web of Science ®Google Scholar
• Cascino, S., and J. Gassen. 2015. “What Drives the Comparability Effect of Mandatory IFRS Adoption?” Review of Accounting Studies 20 (1): 242–282. doi:10.1007/s11142-014-9296-5.
   Web of Science ®Google Scholar
• Chen, A., and J. Gong. 2019. “Accounting Comparability, Financial Reporting Quality, and the Pricing of Accruals.” Advances in Accounting article number 100415 45:100415. doi:10.1016/j.adiac.2019.03.003.
   Web of Science ®Google Scholar
• Chen, C., D. W. Collins, T. D. Kravet, and R. Mergenthaler. 2018a. “Financial Statement Comparability and the Efficiency of Acquisition Decisions.” Contemporary Accounting Research 35 (1): 164–202. doi:10.1111/1911-3846.12380.
   Web of Science ®Google Scholar
• Chen, D., Y. Chen, Z. Li, and C. Ni. 2018b. “Foreign Residency Rights and Corporate Fraud.” Journal of Corporate Finance 51: 142–163. doi:10.1016/j.jcorpfin.2018.05.004.
   Web of Science ®Google Scholar
• Chen, G., M. Firth, D. N. Gao, and O. M. Rui. 2006. “Ownership Structure, Corporate Governance, and Fraud: Evidence from China.” Journal of Corporate Finance 12 (3): 424–448. doi:10.1016/j.jcorpfin.2005.09.002.
   Web of Science ®Google Scholar
• Chen., K., and H. Yuan. 2004. “Earnings Management and Capital Resource Allocation: Evidence from China’s Accounting-based Regulation of Rights Issues.” The Accounting Review 79 (3): 645–665. doi:10.2308/accr.2004.79.3.645.
   Web of Science ®Google Scholar
• Chidambaran, N. K., S. Kedia, and N. Prabhala (2011). CEO director connections and corporate fraud. SSRN Working Paper.
   Google Scholar
• Choi, J. H., S. Choi, L. A. Myers, and D. Ziebart. 2019. “Financial Statement Comparability and the Informativeness of Stock Prices about Future Earnings.” Contemporary Accounting Research 36 (1): 389–417. doi:10.1111/1911-3846.12442.
   Web of Science ®Google Scholar
• De Franco, G., S. P. Kothari, and R. S. Verdi. 2011. “The Benefits of Financial Statement Comparability.” Journal of Accounting Research 49 (4): 895–931. doi:10.1111/j.1475-679X.2011.00415.x.
   Web of Science ®Google Scholar
• DeFond, M., X. Gao, O. Z. Li, and L. Xia. 2019. “IFRS Adoption in China and Foreign Institutional Investments.” China Journal of Accounting Research 12 (1): 1–32. doi:10.1016/j.cjar.2018.07.006.
   Web of Science ®Google Scholar
• Fan, J. P. H., and T. J. Wong. 2005. “Do External Auditors Perform a Corporate Governance Role in Emerging Markets? Evidence from East Asian.” Journal of Accounting Research 43 (1): 35–72. doi:10.1111/j.1475-679x.2004.00162.x.
   Web of Science ®Google Scholar
• Fang, X., Y. Li, Y. Xin, and W. Zhang. 2016. “Financial Statement Comparability and Debt Contracting: Evidence from the Syndicated Loan Market.” Accounting Horizons 30 (2): 277–303. doi:10.2308/acch-51437.
   Web of Science ®Google Scholar
• Financial Accounting Standards Board (FASB). (2010). “Conceptual Framework for Financial Reporting.” Statement of Financial Accounting Concepts No. 8. Norwalk, CT: FASB.
   Google Scholar
• Haß, L. H., M. A. Müller, and S. Vergauwe. 2015. “Tournament Incentives and Corporate Fraud.” Journal of Corporate Finance 34: 251–267. doi:10.1016/j.jcorpfin.2015.07.008.
   Web of Science ®Google Scholar
• He, K., X. Pan, and G. Tian. 2017. “Legal Liability, Government Intervention, and Auditor Behavior: Evidence from Structural Reform of Audit Firms in China.” European Accounting Review 26 (1): 61–95. doi:10.1080/09638180.2015.1100547.
   Web of Science ®Google Scholar
• He, W., B. Sidhu, and S. Taylor. 2019. “Audit Quality and Properties of Analysts’ Information Environment.” Journal of Business Finance & Accounting 46 (3–4): 400–419. doi:10.1111/jbfa.12358.
   Web of Science ®Google Scholar
• Huyghebaert, N., and L. Wang. 2012. “Expropriation of Minority Investors in Chinese Listed Firms: The Role of Internal and External Corporate Governance Mechanisms.” Corporate Governance: An International Review 20 (3): 308–332. doi:10.1111/j.1467-8683.2012.00909.x.
   Web of Science ®Google Scholar
• International Accounting Standards Board (IASB). 2018. The Conceptual Framework for Financial Reporting. London, U.K.: IASB.
   Google Scholar
• Jackson, A., B. Rountree, and K. Sivaramakrishnan. 2017. “Earnings Co-movements and Earnigns Manipulation.” Review of Accounting Studies (22) (3): 1340–1365. doi:10.1007/s11142-017-9411-5.
   Web of Science ®Google Scholar
• Jackson, A. B., C. Li, and R. D. Morris. 2020. “Earnings Co-movements and the Informativeness of Earnings.” Abacus 56 (3): 295–319. doi:10.1111/abac.12200.
   Google Scholar
• Jiang, F., and K. A. Kim. 2015. “Corporate Governance in China: A Modern Perspective.” Journal of Corporate Finance 32: 190–216. doi:10.1016/j.jcorpfin.2014.10.010.
   Web of Science ®Google Scholar
• Jiu, L., B. Liu, and Y. Liu. 2020. “How a Shared Auditor Affects Firm-pair Comparability: Implications of Both Firm and Individual Audit Styles?” Auditing: A Journal of Practice & Theory 39 (3): 133–160. doi:10.2308/ajpt-17-008.
   Web of Science ®Google Scholar
• Kang, M., J. W. Kim, H. Lee, and M. Lee. 2015. “Financial Statement Comparability and Audit Efficiency: Evidence from South Korea.” Applied Economics 47 (4): 358–373. doi:10.1080/00036846.2014.972543.
   Web of Science ®Google Scholar
• Kedia, S., K. Koh, and S. Rajgpal. 2015. “Evidence on Contagion in Earnings Management.” The Accounting Review 90 (6): 2337–2373. doi:10.2308/accr-51062.
   Web of Science ®Google Scholar
• Khanna, V., E. Kim, and Y. Lu. 2015. “CEO Connectedness and Corporate Fraud.” The Journal of Finance 70 (3): 1203–1252. doi:10.1111/jofi.12243.
   Web of Science ®Google Scholar
• Kim, J. B., L. Li, L. Y. Lu., and Y. Yu. 2016. “Financial Statement Comparability and Expected Crash Risk.” Journal of Accounting & Economics 61 (2–3): 294–312. doi:10.1016/j.jacceco.2015.12.003.
   Web of Science ®Google Scholar
• Kim, S., P. Kraft, and S. G. Ryan. 2013. “Financial Statement Comparability and Credit Risk.” Review of Accounting Studies 18 (3): 783–823. doi:10.1007/s11142-013-9233-z.
   Web of Science ®Google Scholar
• Lang, M., M. Maffett, and E. Owens. (2010). Earnings co-movement and accounting comparability: the effects of mandatory IFRS adoption. Working paper.
   Google Scholar
• Lennox, C., P. Lisowsky, and J. Pittman. 2013. “Tax Aggressiveness and Accounting Fraud.” Journal of Accounting Research 51 (4): 739–778. doi:10.1111/joar.12002.
   Web of Science ®Google Scholar
• Liao, L., G. Chen, and D. Zheng. 2019. “Corporate Social Responsibility and Financial Fraud: Evidence from China.” Accounting and Finance 59 (5): 3133–3169. doi:10.1111/acfi.12572.
   Web of Science ®Google Scholar
• Lin, S., W. N. Riccardi, C. Wang, P. E. Hopkins, and G. Kabureck. 2019. “Relative Effects of IFRS Adoption and IFRS Convergence on Financial Statement Comparability.” Contemporary Accounting Research 36 (2): 588–628. doi:10.1111/1911-3846.12475.
   Web of Science ®Google Scholar
• Lu, Y., Y. Zhu, and X. Hu. 2012. “Institutional Shareholding and Corporate Fraud: Evidence from China.” Nankai Business Review 15 (1): 13–23. in Chinese.
   Google Scholar
• Nam, J. 2020. “Financial Reporting Comparability and Accounting-based Relative Performance Evaluation in the Design of CEO Cash Compensation Contracts.” The Accounting Review 95 (3): 343–370. doi:10.2308/accr-52588.
   Web of Science ®Google Scholar
• Nam, J., and R. Thompson (2020). “Does Financial Statement Comparability Facilitate Sec Oversight?” SSRN Working Paper.
   Google Scholar
• Sohn, B. C. 2016. “The Effect of Accounting Comparability on the Accrual-based and Real Earnings Management.” Journal of Accounting. Public Policy 35 (5): 513–539. doi:10.1016/j.jaccpubpol.2016.06.003.
   Web of Science ®Google Scholar
• Yip, R. W. Y., and D. Young. 2012. “Does Mandatory IFRS Adoption Improve Information Comparability?” The Accounting Review 87 (5): 1767–1789. doi:10.2308/accr-50192.
   Web of Science ®Google Scholar
• Young, S., and Y. Zeng. 2015. “Accounting Comparability and the Accuracy of Peer-based Valuation Models.” The Accounting Review 90 (6): 2571–2601. doi:10.2308/accr-51053.
   Web of Science ®Google Scholar
• Yu, F., and X. Yu. 2011. “Corporate Lobbying and Fraud Detection.” Journal of Financial and Quantitative Analysis 46 (6): 1865–1891. doi:10.1017/S0022109011000457.
   Web of Science ®Google Scholar