Shared auditors boost financial statement comparability, benefiting market participants and policymakers.
The study looked at how auditors affect the comparability of financial statements. They focused on Chinese companies where auditors are named in reports and standards are principle-based. The researchers found that when two firms share auditors, their financial statements are more comparable. This suggests that individual auditors have their own way of applying accounting rules and making professional judgments. This shows that auditors play a big role in how comparable financial statements are, which is important for investors and policymakers.