The Measurement of Comparability in Accounting Research

Indices of harmony such as the H, C, I and T indices have been developed and used in the accounting literature to quantify the level of comparability of company accounts. This has led to advances in definitions of comparability as well as empirically quantifying the extent of comparability between actual company accounts. These are important because the general concept of comparability is considered desirable, as highlighted by its inclusion as one of four qualitative characteristics in the framework of the International Accounting Standard Board (IASB). This paper rebuts criticisms of harmony indices in the accounting literature by arguing these criticisms either: (a) apply to old indices but not to newer ones, (b) apply to most empirical accounting research, (c) are based on incorrect or irrelevant assertions, or (d) relate to alternative definitions of harmony. This assists the use and interpretation of harmony indices and advances our understanding of what comparability means. New indices within the T index framework are also proposed by directly comparing company accounts and therefore avoiding the previous requirement to define 'accounting methods'. A new index R is also proposed to capture international harmony between countries when within-country uniformity is absent.