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Does a More Functionally Diverse Top Management Team Make the Financial Statements More Comparable?

Year: 2026

Type: article

Abstract: ABSTRACT We examine whether top management team (TMT) functional diversity affects financial statement comparability. Drawing upon upper echelons theory and the information sharing perspective in diversity research, we argue that TMT functional diversity produces more comparable financial statements due to better information sharing and integration. Using a sample of US firms, we find that financial statement comparability is positively associated with TMT functional diversity. We also find that the positive relationship between TMT functional diversity and comparability is more pronounced in firms with a poor information environment. Our findings remain robust after addressing endogeneity concerns. This study contributes to the existing literature by identifying TMT functional diversity as an important determinant of financial statement comparability.

Source: Journal of Corporate Accounting & Finance

DOI: 10.1002/jcaf.70043

Authors: Md Mahmudul Hasan, Audrey Wen‐Hsin Hsu, Sayan Sarkar, Tsung‐Hsuan Joey Yang

Institutions: Old Dominion University, National Taiwan University, Chunghwa Telecom (Taiwan), University of Mary Washington

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $3,460

OpenAlex ID: W7162040033

FWCI:

Cites: 45

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