HRMARS - Accounting information comparability is an important dimension of financial reporting quality because it helps investors and other users compare firm performance under similar economic conditions. Prior research mainly explains differences in accounting information comparability from firm-level factors such as corporate governance, disclosure quality, and audit monitoring. However, firms operate in different institutional environments, and these external conditions may influence how managers interpret and apply accounting standards. In the Chinese capital market, listed firms follow unified accounting standards but operate in regions with different levels of market development and regulatory enforcement. Despite growing research on regional institutional environments, limited evidence exists on whether regional differences affect the comparability of financial reporting across firms. The purpose of this study is therefore to examine how regional differences influence accounting information comparability and whether this relationship varies over time and across regions. Using panel data of non-financial A-share listed firms in China from 2000 to 2024, this study measures accounting information comparability following the approach proposed by De Franco et al. (2011). Regional differences are defined based on firms’ registered provinces and classified into eastern, central, and western regions. Panel regression models with industry and year fixed effects are used to test the hypotheses. The results show that firms located outside the eastern region have significantly lower accounting information comparability. Further analysis indicates that this relationship changes over time and differs across regions. These findings suggest that regional institutional environments influence the consistency of accounting practices across firms. This study contributes to the literature by linking regional institutional environments with accounting information comparability and by providing new evidence from an emerging market. The findings also suggest that improving institutional conditions may help promote more consistent financial reporting across regions.
Chai et al. (Sun,) studied this question.