This study examines the effect of accounting information comparability, which is regarded as one of the qualitative characteristics that financial information should have in the conceptual framework, by examining its effect on users of accounting information through a literature review and an empirical analysis based on Japanese data.
The literature review indicates that accounting information comparability has positive effects on investors as well as managers. The empirical results also illustrate that accounting information comparability reduces information asymmetry among investors and has a positive effect on capital markets. In addition, the results show that accounting information comparability not only reduces information asymmetry between managers and investors, but also provides a monitoring function for managers.