Investigating the Effects of Cost Leadership Strategy and Product Differentiation on the Comparability of Financial Statements of Firms

Objectives: This study aims to investigate the impact of cost leadership and product differentiation strategies on the comparability of financial statements among firms listed on the Tehran Stock Exchange (TSE). As two major strategic approaches, these methods are expected to reduce costs, diversify products, and enhance the evaluation of firms by users of financial information. Methodology/Design/Approach: A sample of 142 firms listed on the TSE during the period 2014–2022 was analyzed. The research hypotheses were tested using multivariate regression and panel data methodology, implemented through EViews-13 software. Findings: The empirical results reveal that both product differentiation and cost leadership strategies are positively and significantly associated with financial statement comparability. Specifically, product differentiation enhances comparability by emphasizing unique characteristics, while cost leadership improves comparability through systematic cost reduction. Innovation: This study contributes to the accounting literature by demonstrating how strategic management choices influence financial reporting quality. The findings highlight that cost leadership and product differentiation strategies not only strengthen operational efficiency but also provide measurable benchmarks that facilitate comparability in financial statements.