Abstract
This study examines whether levels of economic development affect IFRS information comparability. Since the extant literature indicates that accounting information comparability is also affected by code law versus common law legal origins, we hold the legal system variable constant by focusing on a single code law legal jurisdiction, and document significant evidence on the effect of variations in economic development across regions in China on IFRS information comparability. Specifically, we find comparability is higher for firms from more developed regions in the pre-IFRS convergence period, but not in the post-IFRS convergence periods; and the magnitude of improvement in information comparability upon IFRS convergence is greater for firms from less developed regions. Taken together, our findings suggest that firms from less developed regions in a code law legal jurisdiction actually have more to gain from IFRS convergence.
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