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Financial statement comparability and corporate debt maturity

Document Type : Research Paper

Authors

1 Associate Professor, Department of Accounting, Shahid Beheshti University, Tehran, Iran

2 Assistant Professor, Department of Accounting, Shahid Beheshti University, Tehran, Iran

3 Master of Accounting, Shahid Beheshti University, Tehran, Iran

Abstract

Financial statement comparability improves the quality of financial information and the information environment, and enabling users to identify similarities and differences between different companies, and evaluating the performance of managers and supervising them. So, it is expected that increasing the comparability of financial statements will limit the opportunism of managers. In this regard, in this study, the relationship between comparability of companies and debt maturity has been investigated. The data of the present study were collected using the financial information of 125 companies listed on the Tehran Stock Exchange in the period 2013 to 2019 (882 observation). To analyze the data, a multivariate linear regression model of the generalized least squares type by utilizing combined data was used. The results showed that there is a negative and significant relationship between the comparability of financial statements and the maturity of the company's debt. Therefore, it can be concluded that the Financial statement comparability plays an important role in aligning incentives in the company and by reducing information asymmetry and potential agency costs, can substitute for the use of short-term debt by serving as a corporate governance mechanism.

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References
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Empirical Studies in Financial Accounting
Volume 19, Issue 75
October 2022
Pages 95-123
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History
  • Receive Date: 18 May 2022
  • Revise Date: 02 October 2022
  • Accept Date: 03 October 2022
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