Birds of the same feather: CEO-CFO surname ties and corporate accounting information comparability

Comparability of accounting information (AIC) is the most basic feature to ensure the usefulness of accounting information. AIC can help users identify and understand the similarities and differences among enterprises and accurately judge the actual operating conditions of enterprises. However, academic and practical understanding of the factors affecting the AIC is far from comprehensive and adequate. Based on social identity theory and agency theory, we examine the effect of CEO-CFO surname ties on comparability of accounting information (AIC). We propose that CEO-CFO surname ties exacerbate the agency problem and subsequently reduce the AIC. In addition, we propose that corporate governance mechanisms moderate the above relationships. That is, the effect of CEO-CFO surname ties on AIC will be weakened in companies with multiple major shareholders or institutional investors’ site visits. The empirical test results obtained using a sample of Chinese-listed companies from 2007 to 2020 support most of our theoretical arguments. This study is the first to empirically test whether and when CEO-CFO surname ties affect AIC. The findings of this study bring important insights for shareholders to improve the quality of corporate governance and for policymakers to effectively improve the quality of information in capital markets.