Optimistic tone and economic crisis
DOI:
https://doi.org/10.5007/2175-8069.2014v11n23p155Abstract
As well as the quantitative information, the narrative nature can be subject to manipulation and so can its content as its format of presentation, be exploited by the company management opportunistically to influence user’s perceptions, hiding or misrepresenting information to avoid harmful interpretations or, at least, to reduce them. The aim of this paper is to analyze whether, in a context of economic recession, the information contained in the director’s report of Spanish listed companies, reflects the underlying reality in the financial statements, analyzing the information’s tone. The results of the empirical analysis point to that, despite the existence of a certain level of manipulation by companies that obtained a worse financial performance, the tone has informative content.
References
ACCOUNTING STANDARDS BOARD. Reporting Statement on the Operating and Financial Review. London: ASB, 2006.
AERTS, W. Inertia in the Attributional Content of Annual Accounting Narratives. European Accounting Review, v.10, n. 1, p. 3-32, 2001.
AERTS, W. Picking up the Pieces: Impression Management in the Retrospective Attributional Framing of Accounting Outcomes. Accounting, Organizations and Society, v. 30, p. 493-517, 2005.
ANDERSON, R.C.; DURU, A.; REEB, D.M. (2009): Founders, Heirs, and Corporate Opacity in the United States, Journal of Financial Economics, v. 92, n. 2, p. 205-222, 2009.
BAIRD, J.E.; ZELIN II, R.C. The Effects of Information Ordering on Investor Perceptions: An Experiment Utilizing Presidents´Letters, Journal of Financial and Strategic Decisions, v.13, n. 3, p. 71-80, 2000.
BENASSI, R K. ; MENEZES DA FONSECA, J; DOUGLAS, R.; MÁRCIO, L. Reflexos do desempenho financeiro nas boas notícias: análise linguística em companhias brasileiras transparentes. Revista Contemporânea de Contabilidade, v. 11, n. 22, p. 49-72, enero/abril 2014.
BOWEN, R.M.; DAVIS, A.K.; MATSUMOTO, D.A. Emphasis on Pro Forma Versus GAAP earnings in Quarterly Press Releases: Determinants, SEC Intervention and Market reactions. The Accounting Review, v.80, n. 4, p. 1011-1038, 2005.
CANADIAN INSTITUTE OF CHARTERED ACCOUNTANTS. Management’s Discussion and Analysis: Guidance on Preparation and Disclosure. Toronto: CICA, 2002.
CLATWORTHY, M.; JONES, M. Financial Reporting of Good News and Bad News: Evidence from Accounting Narratives. Accounting & Business Research, v. 33, n. 3, p. 171-185, 2003.
CLATWORTHY, M.; JONES, M.J. The Effect of Thematic Structure on The variability of Annual Report Readability, Accounting, Auditing & Accountability Journal, v. 14, n. 3, pp. 311-326, 2001.
COHEN, J. A Coefficient of Agreement for Nominal Scales. Educational and Psychological Measurement, v. 20, p. 37-46, 1960.
COURTIS, J.K. Annual Report Readability Variability: Tests of the Obfuscation Hypothesis, Accounting, Auditing and Accountability Journal, v. 11, n. 4, pp. 459-471, 1998.
DEMERS, E.; VEGA, C. Soft Information in Earnings Announcements: News or Noise? Papel de trabajo, 2010/33/AC, Fontainebleau: INSEAD, 2010.
ELLIOTT, W. Emphasis and Information Display of Non-GAAP Earnings Measures: Effects on Professional and Non-Professional Investor Judgments and Decisions. Papel de trabajo, 2004. Disponible en http://dx.doi.org/10.2139/ssrn.497548. Acceso en 4.09.2012.
HENRY, E. Market Reaction to Verbal Components of Earnings Press Releases: Event Study Using a Predictive Algorithm. Journal of Emerging Technologies in Accounting, v. 3, p. 1-19, 2006.
HENRY, E. Are Investors Influenced by How Earnings Press Releases are Written? Journal of Business Communication, v. 45, p. 363-407, 2008.
HENRY, E.; LEONE, A.J. Measuring Qualitative Information in Capital Markets Research. Papel de trabajo, 2010.
HILDEBRANDT, H.W.; SNYDER, R.D. The Pollyanna Hypothesis in Business Writing: Initial Results, Suggestions for Research. Journal of Business Communication, v. 18, n. 1, p. 5-15, 1981.
HOOGHIEMSTRA, R. The Construction of Reality: Cultural Differences in Self-Serving Behaviour in Accounting Narratives. Tesis doctoral. Rotterdam: Erasmus University Rotterdam, 2003.
INTERNATIONAL ACCOUNTING STANDARDS BOARD. IFRS Practice Statement-Management Commentary, A Framework for Presentation. London: IASB, 2010.
JONES, M. Readability of Annual Reports: Western Versus Asian Evidence – A Comment to Contextualize. Accounting, Auditing and Accountability Journal, v. 9, n. 2, p. 86-91, 1996.
LANG, M.; LUNDHOLM, R. Voluntary Disclosure and Equity Offerings: Reducing Information Asymmetry or Hyping the Stock? Contemporary Accounting Research, v. 17, n. 4 , p. 623-662, 2000.
LI, F. Annual Report Readability, Current Earnings, and Earnings Persistence. Journal of Accounting and Economics, v.45 n. 2-3, p. 221-247, 2008.
LI, F. The Information Content of Forward-Looking Statements in Corporate Filings-A Naïve Bayesian Machine Learning Approach. Journal of Accounting Research, v. 48, p. 1049-1102, 2010.
MERKL-DAVIES, D.M. The Obfuscation Hypothesis Re-Examined: Analysing Impression Management in Narrative Annual Report Documents. Tesis doctoral. Bangor: Bangor University, 2007. Disponible en http://researchrepository.ucd.ie/bitstream/handle/10197/2907/04_21%20Merkl-Davies%20Brennan%20Discretionary%20Disclosure%20Strategies%20in%20Corporate%20Narratives.pdf?sequence=1. Acceso el 15.11.2013.
MERKL-DAVIES, D.M.; BRENNAN, N.M.; MCLEAY, S.J. Impression Management and Retrospective Sense-Making in Corporate Narratives: A Social Psychology Perspective. Accounting, Auditing and Accountability Journal, v. 24, n. 3, p. 315-344, 2011.
MILGROM, P. Good News and Bad News: Representation Theorems and Applications. Bell Journal of Economics, v.12, v. 2, p. 380-391, 1981.
PATELLI, L.; PEDRINI, M. Is the Optimism in CEO’s Letters to Shareholders Sincere? Impression Management versus Communicative Action during the Economic Crisis”, Journal of Business Ethics, doi: 10.1007/s10551-013-1855-3, 2013.
PIOTROSKI, J. Segment reporting fineness and the precision of investors beliefs. Papel de trabajo. Universidad de Chicago, 2003.
RAHMAN, S. Impression management motivations, strategies and disclosure credibility of corporate narratives. Journal of Management Research, v.4, n.3, p. 1-14, 2012.
REVSINE, L. The Selective Financial Misrepresentation Hypothesis. Accounting Horizons, v. 5, n. 4, p. 16-27, 1991.
RUTHERFORD, B.A Genre Analysis of Corporate Annual Report Narratives. Journal of Business Communication, v. 42, n. 4, p. 349-378, 2005.
SALOTTI, B.M. Divulgação voluntária da Demonstração dos Fluxos de Caixa no mercado de capitais brasileiro. Tesis doctoral. Faculdade de Economia, Administração e Contabilidade da Universidade de São Paulo, Brasil, 2005.
SCHLEICHER,T.; WALKER, M. Bias in the Tone of Forward-Looking Narratives. Accounting and Bussines Reseach, v. 40, n. 4, p. 371-390, 2010.
SECURITIES AND EXCHANGE COMMISSION. Final Rule: Disclosure in Management’s Discussion and Analysis about Off-balance Sheet Arrangements and Aggregate Contractual Obligations. Washington DC, WA: SEC, 2003.
SMITH, M.; DONG, Y.; REN, Y. The predictive ability of corporate narrative disclosures: Australian evidence. Asian Review of Accounting, v. 19, n.2, p. 157-170, 2011.
SYDSERFF, R.; WEETMAN, P. Developments in Content Analysis: A Transitivity Index and DICTION Scores. Accounting, Auditing and Accountability Journal, v.15, n. 4, p. 523-545, 2002.
UANG, J.Y; CITRON, D.B.; SUDARSANAM, S.; TAFFLER, R.J. Management Going-Concern Disclosures: Impact of Corporate Governance and Auditor Reputation. European Financial Management, v. 12, p. 789-816, 2006.
VERRECCHIA, Robert E. Essays on disclosure. Journal of Accounting and Economics, v. 32, n. 1-3, p. 97-180, Diciembre, 2001.
Downloads
Published
How to Cite
Issue
Section
License
Os Direitos Autorais para artigos publicados neste periódico são do autor, com direitos de primeira publicação para a Revista. Em virtude de aparecerem nesta Revista de acesso público, os artigos são de uso gratuito, com atribuições próprias, em aplicações educacionais, de exercício profissional e para gestão pública. A Revista adotou a licença Creative Commons Atribuição 4.0 Internacional - CC BY NC ND. Esta licença permite acessar, baixar (download), copiar, imprimir, compartilhar, reutilizar e distribuir os artigos desde que com a citação da fonte, atribuindo os devidos créditos de autoria. Nesses casos, nenhuma permissão é necessária por parte dos autores ou dos editores. Autores têm autorização para assumir contratos adicionais separadamente, para distribuição não-exclusiva da versão do trabalho publicada nesta revista (ex.: publicar em repositório institucional ou um capítulo de livro).
Esta obra está licenciada sob uma Licença Creative Commons.
