The Effect of Financial Statement Comparability on Cost Stickiness
Abstract
ABSTRACT This study examines the impact of financial statement comparability on asymmetric cost behavior, commonly known as cost stickiness. Using a comprehensive U.S. sample (1999–2020), we document a positive association between greater comparability and increased cost stickiness. The relationship is markedly stronger for firms facing high uncertainty and for firms whose analyst forecasts are less accurate or more dispersed. We also find that higher comparability notably raises the likelihood of subsequent sales growth and increases the future value derived from incurred costs. Overall, more comparable accounting enables managers to convert slack resources into profits and design strategies to bolster future sales.
Fields of Study & Subjects
Auditing
Earnings Management
Governance
Accounting and Organizational Management
Accounting Theory and Financial Reporting
Publication details
- Journal / source
- Journal of International Financial Management and Accounting
- Volume
- 37
- Issue
- 3
- Pages
- 539–563
- Publication date
- 18 January 2026
- Language
- EN