Mandatory IFRS adoption leads to limited financial comparability across firms.
The study looked at how adopting International Financial Reporting Standards (IFRS) affects how comparable financial information is. They found that the overall impact of mandatory IFRS adoption on comparability is small. Firms with strong incentives to comply with IFRS saw the biggest increase in comparability. Companies in countries with strict reporting rules also had more noticeable effects. Public companies using IFRS became less comparable to local private firms following different accounting standards.