A Methodology for the Analysis of Narrative Accounting Disclosures

Frazier, K. E.; Ingram, R W; Tennyson, B. Mack

doi:10.2307/2490713

“…There are a number of researchers who took this route, including Bhattacharya, Galpin, Ray, and Yu (2009) who read and evaluated over 171 thousand news items about Internet IPOs, and Smith and Taffler (1995) who engaged 146 students to process chairmen's statements. A second method is to employ statistical evaluation of textual data -an approach that was introduced in the accounting context by Frazier, Ingram, and Tennyson (1984) who used a software prototype called Words. Since then, there has been considerable progress in the software applications available and in quantitative linguistics, however most of the algorithms rely on computing the frequencies of words falling into a given category.…”

Section: Research Contextmentioning

confidence: 99%

Market reaction to the positiveness of annual report narratives

Yekini

¹

,

Wisniewski

²

,

Millo

³

2016

The British Accounting Review

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This paper focuses on narratives published by UK companies, defined here as the content of annual reports excluding financial statements and notes to accounts. We endeavour to gauge the tone of these narratives by recording the frequency of positive words appearing in the text. We show that the extent of positiveness is related to market reaction around the disclosure date. This conclusion is maintained even after controlling for the financial figures that are reported simultaneously and company-specific characteristics. Consequently, narratives should not be perceived as mere impression management tools, but also as conduits for disseminating price-sensitive information.JEL codes: M41; G12; G14

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“…For example, Frazier et al (1984) apply factor analysis to extract themes from management analyses of the results of operations in annual reports. The scores from the factor analysis are used to test for differences between good and bad performers and between ownercontrolled and management-controlled companies.…”

Section: Rhetorical Manipulation In Accounting Narrativesmentioning

confidence: 99%

Impression Management: Developing and Illustrating a Scheme of Analysis for Narrative Disclosures - A Methodological Note

Brennan

¹

,

Saorín

²

,

Pierce

³

2008

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Publication informationAccounting, Auditing and Accountability Journal, 22 (5) disclosures. An impression management bias score is devised to capture the extent to which impression management introduces bias into corporate narratives. An example of the application of the composite impression management score and impression management bias score methodology is provided.Findings -While not amounting to systematic evidence, the 21 illustrative examples suggest that impression management is pervasive in corporate financial communications using multiple impression management methods, such that positive information is exaggerated, while negative information is either ignored or is underplayed.Originality/value -Four impression management methods are described in detail, illustrated by 21 examples. These four methods are examined together. New impression management methods are studied in this paper for the first time. This paper extends prior impression management measures in two ways. First, a composite impression management score based on four impression management techniques is articulated. Second, the composite impression management score methodology is extended to capture a measure for bias, in the form of an impression management bias score. This is the first time outside the US that narrative disclosures in press releases have been studied.

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“…He observes that several subjective steps have to be taken to adapt the content to the program, and that those decisions can be arbitrary and fall outside the concept of traditional intercoder reliability. Conway (2007, p. 187), referring to the work of Linderman (2001) Previous studies dealing with the content of accounting narratives have used computer programmes (e.g., Ingram and Frazier, 1983;Frazier et al, 1984;Tennyson et al, 1990;Smith and Taffler, 2000;Rutherford, 2005;Henry, 2008;Matsumoto et al, 2006;Davis et al, 2007) or a mixture of manual and computer coding (e.g., Smith and Taffler, 1992a;Subramanian et al, 1993;Abrahamson and Park, 1994;Abrahamson and Amir, 1996;Smith and Taffler, 2000). Others have done all the coding manually (e.g., Bettman and Weitz, 1983;Staw et al, 1983;Salancik and Meindl, 1984;Courtis, 1986;Jones, 1988;Lang and Lundholm, 2000;Clatworthy and Jones, 2003).…”

Section: Measuring Impression Managementmentioning

confidence: 99%

Methodological Insights

Brennan

¹

,

Guillamón‐Saorín

²

,

Pierce

³

2009

Accounting, Auditing &Amp; Accountability Journal

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Publication informationAccounting, Auditing and Accountability Journal, 22 (5) disclosures. An impression management bias score is devised to capture the extent to which impression management introduces bias into corporate narratives. An example of the application of the composite impression management score and impression management bias score methodology is provided.Findings -While not amounting to systematic evidence, the 21 illustrative examples suggest that impression management is pervasive in corporate financial communications using multiple impression management methods, such that positive information is exaggerated, while negative information is either ignored or is underplayed.Originality/value -Four impression management methods are described in detail, illustrated by 21 examples. These four methods are examined together. New impression management methods are studied in this paper for the first time. This paper extends prior impression management measures in two ways. First, a composite impression management score based on four impression management techniques is articulated. Second, the composite impression management score methodology is extended to capture a measure for bias, in the form of an impression management bias score. This is the first time outside the US that narrative disclosures in press releases have been studied.

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A Methodology for the Analysis of Narrative Accounting Disclosures

Cited by 112 publications

References 10 publications

Market reaction to the positiveness of annual report narratives

Market reaction to the positiveness of annual report narratives

Impression Management: Developing and Illustrating a Scheme of Analysis for Narrative Disclosures - A Methodological Note

Methodological Insights

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