Shared the Customer, Shared the Style: Common Customer and Firm-pair Comparability

Po-Hsiang Yu, Lili Jiu, Fang Zhang

Research output: Contribution to conferenceConference paperpeer-review

Abstract

An accounting information system (AIS) enables a business to track economic activities through the recognition, processing, production, and dissemination of accounting information. This study stands at the forefront of an AIS to investigate the determinant factors that shape accounting comparability at the transaction level. If a pair of companies engage business with the same major customer (termed customer-connected pairs (CCPs)), their financial statements would be more comparable as they are subject to the shared customer’s transactions and information demands, which is termed customer style. Using pairs of U.S. listed companies in the same industry, we find evidence consistent with customer style shaping greater comparability. Further, our channel tests show that CCPs demonstrate greater comparability in their accounting practices, the levels of accounting conservatism, and management discretion. Lastly, we discover that analysts are more likely to incorporate CCPs in their portfolios and CCP-following analysts achieve superior forecast performance.
Original languageEnglish
Publication statusPublished - 21 Jun 2024
EventThe Eleventh International Conference of the Journal of International Accounting Research - Regent Taipei Hotel, Taipei, Taiwan, Province of China
Duration: 20 Jun 202422 Jun 2024
https://aaahq.org/Meetings/2024/JIAR (Conference website)
https://aaahq.org/portals/0/documents/meetings/2024/JIAR/2024%20JIAR%20conference%20program%20_Abstract.pdf (Conference abstract)
https://aaahq.org/portals/0/documents/meetings/2024/JIAR/2024%20JIAR%20conference%20program.pdf (Conference program)

Conference

ConferenceThe Eleventh International Conference of the Journal of International Accounting Research
Abbreviated titleJIAR
Country/TerritoryTaiwan, Province of China
CityTaipei
Period20/06/2422/06/24
OtherThe goal of this conference is to expand the diversity and scope of international accounting research, through increased understanding and awareness of the challenges and opportunities of international accounting. Original and rigorous research will provide academics, practitioners, and regulators with deeper insights into international accounting issues. Journal of International Accounting Research (JIAR) continues to welcome innovative and high-quality research that examines how accounting data affects capital market participants. Papers that address interesting and innovative research questions in all areas are welcomed.
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