Corporate culture and financial statement comparability

Mansoor Afzali

doi:10.1016/j.adiac.2022.100640

Corporate culture and financial statement comparability

Mansoor Afzali

Accounting, Helsinki

Research output: Contribution to journal › Article › Scientific › peer-review

11 Citations (Scopus)

Abstract

In this paper, I empirically examine the influence of corporate culture on the comparability of financial statements. I predict that firms with strong corporate cultures have less-opportunistic managers, who make homogenous decisions
when faced with similar economic events, resulting in greater accounting
comparability. For a sample of U.S. companies, I find empirical evidence
consistent with this prediction: firms with strong corporate cultures have greater
peer- and industry-level comparability. These results are robust to using an
entropy-balanced sample, correcting for sample selection bias using Heckman’s
two-step procedure, and employing different measures of corporate culture
strength. Further analysis reveals that sudden CEO turnovers that move firms
towards (away from) a stronger corporate culture positively (negatively)
influence post-turnover accounting comparability. My results provide new
insights on the role of corporate culture for financial reporting.

Original language	English
Article number	100640
Peer-reviewed scientific journal	Advances in Accounting
Volume	60
Number of pages	11
ISSN	0882-6110
DOIs	https://doi.org/10.1016/j.adiac.2022.100640
Publication status	Published - 22.12.2022
MoE publication type	A1 Journal article - refereed

Keywords

512 Business and Management
corporate culture
financial statement comparability

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Corporate culture and financial statement comparability

Abstract

Keywords

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