Financial statement comparability

Manager characteristics

Non-GAAP disclosures.

Working Paper: "Low Ability Managers and Financial Statement Comparability (2022)"                This study investigates whether low ability managers employ financial statement comparability (FSC) as a means of disguising poor firm performance. Using a sample of firms and turnover events from 1996 to 2016, my results confirm this research question. Firms with low ability managers have low levels of FSC and low FSC is associated with decreased manager turnover for poor firm performance. These findings have practical implications for standard setters, boards of directors, and investors as a reduction in FSC makes it more difficult to recognize and dismiss poorly performing managers, impairing a key corporate governance mechanism.