There are several approaches to mitigate comparability issues:
Standardization: Adoption of uniform accounting standards like IFRS can enhance comparability across countries. Regulators can also enforce standardized reporting practices within industries. Consistent Application: Ensuring consistent application of accounting policies over time helps maintain comparability in financial statements. Disclosure: Companies should provide detailed disclosures about their accounting policies, changes, and assumptions to help stakeholders understand the context of financial statements. Adjustments: Analysts and investors can adjust for differences in accounting policies or currency fluctuations to make more accurate comparisons. Benchmarking: Using industry-specific benchmarks can help compare companies with similar business models and operational environments.