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Cost uniqueness and financial statement comparability

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  • Wang, Duo
  • Hu, Yunge
  • Li, Yanxi

Abstract

As a critical driver of corporate transformation, cost management serves as a cornerstone for advancing high-quality enterprise development. However, the uniqueness of costs may compromise the comparability of financial reporting across entities. This study examines a sample of Chinese A-share listed companies from 2007–2022 to demonstrate that cost uniqueness significantly reduces financial statement comparability (FSC). Mechanism analysis reveals that cost uniqueness reduces FSC by increasing information asymmetry. Heterogeneity analysis reveals that firms with more complex investment-financing activities, those operating in high-tech industries, and those in highly competitive sectors exhibit a strong negative association between cost uniqueness and FSC. The findings extend the determinants of FSC to internal cost characteristics, offer practical implications for listed companies to enhance disclosure quality, and provide insights for investors and regulators to strategically leverage cost-specific information in their decision-making.

Suggested Citation

  • Wang, Duo & Hu, Yunge & Li, Yanxi, 2025. "Cost uniqueness and financial statement comparability," Finance Research Letters, Elsevier, vol. 85(PC).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pc:s154461232501356x
    DOI: 10.1016/j.frl.2025.108099
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