It is the cache of ${baseHref}. It is a snapshot of the page. The current page could have changed in the meantime.
Tip: To quickly find your search term on this page, press Ctrl+F or ⌘-F (Mac) and use the find bar.

Impression Management Motivations, Strategies and Disclosure Credibility of Corporate Narratives | Rahman | Journal of Management Research

Impression Management Motivations, Strategies and Disclosure Credibility of Corporate Narratives

Sheehan Rahman

Abstract


This paper explores the key factors that influence disclosure credibility of corporate managers. Mercer (2004) provided a critical and comprehensive account of the academic literature on disclosure credibility. This paper finds that investors, while determining the credibility of a management disclosure, examine four basic factors—the situational incentives at the time of the disclosure, management’s trustworthiness and competence, the degree of assurance for the message from internal and external sources, and several characteristics of the disclosure such as its precision, venue of release and time horizon.



Full Text:

PDF

References


Adelberg, A.H. (1979). Narrative disclosures contained in annual reports: means of communication or manipulation. Accounting and Business Research, 10 (Summer): 179-189.

Aerts, W. (1994). On the use of accounting logic as an explanatory category in narrative accounting disclosures. Accounting, Organizations and Society, 19(4/5): 337-353.

Aerts, W. (2005). Picking up the pieces: impression management in the retrospective attributional framing of accounting outcomes. Accounting, Organizations and Society, 30: 493-517.

Baginski, S., Conrad, E. and Hassell, J. (1993). The effects of management forecast precision on equity pricing and on the assessment of earnings uncertainty. The Accounting Review, 68 (4): 913-927.

Baird, J.E. and Zelin, R.C. (2000). The effects of information ordering on investor perceptions: an experiment utilizing president’s letters. Journal of Financial and strategic Decisions, 13(3): 71-81.

Baker, H.E. and Kare, D.D. (1992). Relationship between annual report readability and corporate financial performance. Management Research News, 15(1): 1-4.

Barrett, A. (2002). Slammed! Investors are telling companies that creative accounting will no longer fly. Business Week, March 4: 34.

Barton, J. and Mercer, M. (2005). To blame or not to blame: analysts’ reactions to explanations of poor management performance. Journal of Accounting and Economics, 39: 509-533.

Beasley, M. (1996). An empirical analysis between the relationship between the board of director composition and financial statement fraud. The Accounting Review, 71 (4): 443-465.

Birnbaum, M. and Stegner, S. (1979). Source credibility in social judgement: bias, expertise and judges’ point of view. Journal of Personality and Social Psychology, 37: 48-78.

Black, B., Jung, H. and Kim, W. (2003). Does corporate governance affect firm’s market values? Evidence from Korea. Working Paper, Stanford Law School.

Blackwell, D., Noland, T. and Winters, D. (1998). The value of auditor assurance: evidence from loan pricing. Journal of Accounting Research, 36 (1): 57-70.

Bowen, R.M., Davis, A.K. and Matsumoto, D.A. (2005). Emphasis on pro-forma versus GAAP earnings in quarterly press releases: determinants, SEC intervention and market reactions. The Accounting Review, 80(4): 1011-1038.

Cairney, T. and Richardson, F. (1999). The credibility of management forecasts of annual earnings. Working Paper, Florida Atlantic University.

Casser, G. (2001). Self-serving behaviour and the voluntary disclosure of capital market performance. Accounting Research Journal, 14(2): 126-137.

Chaiken, S. and Eagley, A. (1976). Communication modality as a determinant of message persuasiveness and message comprehensibility. Journal of Personality and Social Psychology, 34 (4): 605-614.

Clatworthy, M. and Jones, M.J. (2001). The effect of thematic structure on the variability of annual report readability. Accounting, Auditing and Accountability Journal, 14 (3): 311-326.

Clatworthy, M. and Jones, M.J. (2003). Financial reporting of good news and bad news: evidence from accounting narratives. Accounting and Business Research, 33(3): 171-185.

Courtis, J.K. (1986). An investigation into annual report readability and corporate risk-return relationships. Accounting and Business Research, 16 (Autumn): 285-294.

Courtis, J.K. (1995). Readability of annual reports: Western versus Asian evidence. Accounting, Auditing and Accountability, 8(2): 4-17.

Courtis, J.K. (1998). Annual report readability variability: tests of the obfuscation hypothesis. Accounting, Auditing and Accountability Journal, 11(4): 459-471.

Courtis, J.K. (2004). Corporate report obfuscation: artefact or phenomenon? British Accounting Review, 36(3): 291-312.

Eagly, A., Wood, W. and Chaikem, S. (1978). Causal inferences about communicators and their effect on opinion change. Journal of Personality and Social Psychology, 36: 424-435.

Elliot, W.B. (2006). Are investors influenced by pro-forma emphasis and reconciliations in earnings announcements? The accounting Review, 81(1): 113-133.

Frost, C. (1997). Disclosure policy choices of UK firms receiving modified audit reports. Journal of Accounting and Economics, 23 (2): 163-187.

Godfrey, J., Mather, P. and Ramsay, A. (2003). Earnings and impression management in financial reports: the case of CEO changes. Abacus, 39(1): 95-123.

Gogoi, P. (2001). Making bad news pay. Business Week, September 3: EB24.

Guillamon-Saorin, E. (2006). Impression management in financial reporting: evidence from the UK and Spain. Unpublished doctoral dissertation, University College Dublin.

Hassell, J., Jennings, R. and Lasser, D. (1988). Management earnings forecasts; their usefulness as a source of firm-specific information to security analysts. Journal of Financial Research, 11(4): 303-319.

Healy, P.M. and Wahlen, J.M. (1999). A review of earnings management literature and its implications for standard setting. Accounting Horizons, 13: 365-383.

Hirst, D.E., Koonce, L. and Miller, J. (1999). The joint affect of management’s prior forecast accuracy and the form of its financial forecast on investor judgements. Journal of Accounting Research, Supplement: 1-24.

Hodge, F., Hopkins, P. and Pratt, J. (2000). Classification discretion, reporting reputation, and disclosure credibility: the case of hybrid securities. Working Paper, Indianan University.

Hodge, F., Hopkins, P. and Pratt, J. (2001). Hyper-linking unaudited information to audited financial statements; effects on investor judgements. The Accounting Review, 76 (4): 675-691.

Hoogheimsrtra, R. (2000). Corporate communication and impression management—new perspectives: why companies engage in social reporting. Journal of Business Ethics, 27: 55-68.

Hovland, C., Janis, I. and Kelly, H. (1953). Communication and Persuasion. New haven, CT: Yale University Press.

Hutton, A., Miller, G. and Skinner, D. (2003). The role of supplementary statements with management earnings forecast. Journal of Accounting Research, 25 (1): 90-110.

Jennings, R. (1987). Unsystematic security price movements, management earnings forecasts, and revisions in consensus analyst earnings forecasts. Journal of Accounting Research, 25 (10): 90-110.

Jones, M.J. (1988). A longitudinal study of the readability of the chairman’s narratives in the corporate reports of a UK company. Accounting and Business Research, 18(2): 297-306.

Kelley, H. (1972). Attribution in social interaction. Attrbutions: Perceiving the Causes of Behavior, ed. Jones, E., Kanouse, D., Kelley, H., Nisbett, R., Valins, S., Weiner, B. Published Morrison NJ: General Learning Press:151-174.

Kelton, A.S. (2006). Internet financial reporting: the effects of hyperlinks and irrelevant information on investor judgements. Unpublished doctoral dissertation, The University of Tennessee, Knoxville.

King, R., Pownall, G. and Waymire, G. (1990). Expectations adjustment via timely management forecasts: review, synthesis and suggestions for future research. Journal of Accounting Literature, 9: 113-144.

Klien, A. (1999). Audit committee, board of director characteristics, and earnings management. Journal of Accounting and Economics, 33: 375-400.

Koch, A. (1999). Financial distress and the credibility of management forecasts. Working Paper, Caregie Mellon University.

Lang, M. and Lundholm, R. (2000). Voluntary disclosure and equity offerings: reducing information asymmetry or hyping the stock? Contemporary Accounting Research, 17(4): 623-662.

Leary, M.R. and Kowlaski, R.M. (1990). Impression management: a literature review and two-component model. Psychological Bulletin, 107(1): 34-47.

Leftwich, R. (1983). Accounting information in private markets: evidence from private lending agreements. The Accounting Review, 64 (1): 1-27.

Lewellen, W.G., Park, T. and Ro., B.T. (1996). Self-serving behaviour in managers discretionary information disclosure decisions. Journal of accounting and Economics, 21(2): 227-251.

Lewis, N.R., Parker, L.D., Pound, G.D. and Sutcliffe, P. (1986). Accounting report readability: the use of readability techniques. Accounting and Business Research, 16 (Summer): 199-213.

Li, F. (2006). Annual report readability, current earnings and earnings persistence. Working Paper, University of Michigan.

Li., K. (2002). Nextel defends its accounting. The Street.com, October 8.

Libby, R. (1979). Bankers’ and auditors’ perception of the message communicated by the audit report. Journal of Accounting Research, 17 (1): 99-122.

Matsumoto, D., Pronk, M and Roelofsen, E. (2006). Do analysts mitigate optimism by management? Working Paper, University of Washington.

McNicols, M. (1989). Evidence of information asymmetries from management earnings forecasts and stock returns. The Accounting Review, 58 (1): 23-42.

Mercer, M. (2004). How do investors assess the credibility of management disclosures? Accounting Horizons, 18 (3): 185-196.

Merkl-Davies, D.M. and Brennan, N.M. (2007). Discretionary disclosure strategies in corporate narratives: incremental information or impression management? Journal of Accounting Literature, 26: 116-194.

Pennebaker, J.W., Mehl, M.R. and Neiderhoffer, K. (2003). Psychological aspects of natural language use: our words, our selves. Annual Review of Psychology, 54: 547-577.

Petty, R. and Wegener, D. (1998). Attitude change: multiple roles for persuasion variables. The Handbook of Social Psychology (Vol. I), ed. Gilbert, D., Fiske, S. and Lindzey, G. Published Boston, MA: McGraw-Hill: 323-390.

Pownall, G., Wasley, C. and Waymire, G. (1993): The stock price effects of alternative types of management earnings forecasts. The Accounting Review, 68 (4): 896-912.

Rutherford, B.A. (2003). Obfuscation, textual complexity and the role of regulated narrative disclosure in corporate governance. Journal of Management and Governance, 7: 187-210.

Rutherford, B.A. (2005). Genre analysis of corporate annual report narratives: a corpus linguistics based approach. Journal of Business Communication, 42(4): 324-348.

Schrand, C. and Walther, B.R. (2000). Strategic benchmarks in earnings announcements: the selective disclosure of prior period earnings components. The Accounting Review, 75(2): 151-177.

Smith, M. and Taffler, R.J. (1992). Readability and understandability: different measures of the textual complexity of accounting narrative. Accounting, auditing and Accountability Journal, 13(5): 624-646.

Smith, M. and Taffler, R.J. (2000). The chairman’s statement: a content analysis of discretionary narrative disclosures. Accounting, Auditing and Accountability Journal, 13(5): 624-646.

Staw, B.M., McKechnie, P.I. and Puffer, S.M. (1983). The justification of organizational performance. Administrative Science Quarterly, 28: 582-600.

Subramanian, R., Insley, R. and Blackwell, R.D. (1993). Performance and readability: a comparison of annual reports and profitable and unprofitable corporations. The Journal of Business Communication, 30(1): 49-60.

Sydserff, R. and Weetman, P. (2002). Developments in content analysis: a transitivity index and DICTION scores. Accounting, Auditing and Accountability Journal, 12(4); 1459-488.

Thomas, J. (1997). Disclosure in the marketplace: the making of meaning in annual reports. The Journal of Business Communication, 34(1): 47-66.

Williams, P. (1996). The relation between a prior earnings forecast by management and analyst response to a current management forecast. The Accounting Review, 71 (1): 103-113.

Yuthas, K., Rogers, R. and Dillard, J.F. (2002). Communicative action and corporate annual reports. Journal of Business Ethics, 41 (1-2): 141-157.




DOI: http://dx.doi.org/10.5296/jmr.v4i3.1576

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.

To make sure that you can receive messages from us, please add the 'macrothink.org' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.

Copyright © Macrothink Institute ISSN 1941-899X

'Macrothink Institute' is a trademark of Macrothink Institute, Inc.