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Does International Financial Reporting Standards adoption improve or impede comparability? New evidence from Chinese dual‐class firms

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  • Jenny Xinjiao Guan
  • Kangtao Ye
  • Shanshan Zhang
  • Xiao‐Jun Zhang

Abstract

We analyze a unique set of Chinese firms to isolate the impact of accounting standards on financial reporting comparability and capital markets. From 2001 to 2006, these companies simultaneously maintained two sets of financial statements because of their dual‐class share structure: statements for A‐shares followed Chinese Generally Accepted Accounting Principles (GAAP), whereas those for B‐shares followed International Financial Reporting Standards (IFRS). We find a disparity in financial reporting comparability between these two accounting standards: IFRS produce less comparable information than Chinese GAAP. We also find that the disparity in comparability is related to fair value accounting, especially when corporate governance is weak.

Suggested Citation

  • Jenny Xinjiao Guan & Kangtao Ye & Shanshan Zhang & Xiao‐Jun Zhang, 2025. "Does International Financial Reporting Standards adoption improve or impede comparability? New evidence from Chinese dual‐class firms," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 52(2), pages 1025-1058, April.
    • Handle: RePEc:bla:jbfnac:v:52:y:2025:i:2:p:1025-1058
    DOI: 10.1111/jbfa.12835
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