Comparability across companies allows analysts to identify real economic similarities in and differences between underlying economic events because those similarities or differences are not obscured by accounting methods or disclosure practices.

Question

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Comparability enables analysts to make meaningful comparisons across different companies' financial statements by removing the impact of accounting methods or disclosure practices. This allows analysts to identify real economic similarities and differences between companies and make informed decisions.

Comparability Across Companies Allows Analysts to Identify Real Economic Similarities