Legal and Extra-Legal Determinants of Accounting Comparability in ASEAN Countries

This study investigated the role of country-level legal and extra-legal factors in accounting comparability in five Southeast Asian countries from 2014 to 2017.We found that countries with stronger investor protection, stricter enforcement of auditing and reporting standards, higher corporate tax compliance, and more public attention have more comparable financial statements reported by firms. However, accounting comparability decreased in countries with more competitive business environments. A battery of sensitivity and supplementary analysis also supports our main findings. An implication of current findings is extra-legal system is worth accounting for examining the comparability of financial statements and should be given an equal portion as the legal system when explaining the effect of a country factor on the quality of accounting information.