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Differential patterns of textual characteristics and company performance in the chairman’s statement

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Purpose – The purpose of this paper is to assess the effect of financial performance on the textual
characteristics of the chairman’s statement. In particular, given the increased motives for poorly
performing management to engage in impression management, the paper focuses on whether
companies’ reporting strategies depend on underlying financial performance.
Design/methodology/approach – The research questions are investigated by examining a range
of textual characteristics in the chairman’s statements of 100 extremely profitable and extremely
unprofitable UK listed companies.
Findings – The results in this paper indicate that the chairman’s statement is subject to impression
management techniques as managers’ propensity to associate themselves with company financial
results is associated with the firm’s underlying financial performance. There is also some evidence that
unprofitable companies focus more on the future, rather than on past performance.
Research limitations/implications – The paper shows the results of this study are based on
samples of extremely profitable or extremely unprofitable companies and thus represent the tails of
the distribution; further research using random sampling could investigate the extent to which the
findings hold for all companies. Additional factors, such as changes in board membership, could also
be examined in future research.
Practical implications – The research in this paper has implications for the current state of
financial reporting whereby auditors do not formally audit, but instead review, the chairman’s
statement to ascertain its consistency with the financial statements.
Originality/value – The paper will be of value to academic researchers in the field of impression
management and to users of annual reports who may rely on the chairman’s statement for decision
making.

Keywords Accounting, Narratives, Chairmen, Financial performance, United Kingdom

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Ketersediaan

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Informasi Detail

Judul Seri

Accounting, Auditing & Accountability Journal

No. Panggil

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Penerbit

: Emerald Group., 2006

Deskripsi Fisik

Accounting, Auditing & Accountability Journal Vol. 19 No. 4, 2006 pp. 493-511

Bahasa

English

ISBN/ISSN

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Klasifikasi

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Tipe Isi

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Tipe Media

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Tipe Pembawa

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Edisi

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Subjek

AKUNTANSI

Info Detail Spesifik

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Pernyataan Tanggungjawab

Asmawati/Syahrial

Versi lain/terkait

Lampiran Berkas

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