Does Financial Statement Structural Comparability Affect Analysts' Forecasts?

This study investigates comparability of firms' financial statement structure, i.e. similarity of lineitems, and its effects on accounting information users. Prior research demonstrates a relationship between accounting-function comparability (i.e., earnings comparability) and analysts' forecast properties. Given the importance of financial statements as a source of information for analysts, we examine whether and how structural comparability of firms' financial statements affects that relationship. Using a dataset of 7,797 firm-year observations from 2009 to 2015, our results indicate that structural comparability mediates the relation between earnings comparability and analysts' coverage, forecast accuracy, and forecast dispersion. While our findings imply that structural comparability enhances financial statement informativeness to analysts, we also provide evidence suggesting that uniformity reduces financial statement informativeness. Overall, this study provides evidence on the underlying mechanism by which accounting-function comparability affects analysts' forecast properties as well as some perspective on the distinction between comparability and uniformity in informative financial reporting