Do managers really guide through the fog? On the challenges in assessing the causes of voluntary disclosure

Dyer, Travis; Lang, Mark H.; Stice‐Lawrence, Lorien

doi:10.1016/j.jacceco.2016.08.001

Cited by 40 publications

(23 citation statements)

References 9 publications

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“…In financial reporting, boilerplate disclosures are relatively common (see, e.g., statements in SEC 1998 , 2013 ; Higgins 2014 ), have been shown to exist in many countries (Lang and Stice-Lawrence 2015 ), and have increased over time (Dyer et al 2017 ). Moreover, boilerplate disclosures likely play a role in the increasing complexity and loss of readability of corporate disclosures (e.g., Li 2008 ; Dyer et al 2016 , 2017 ). 70 Boilerplate disclosures are also common in CSR reports (see Section 3.4 ).…”

Section: Implementation Issues For Mandatory Csr Reporting Standardsmentioning

confidence: 99%

Mandatory CSR and sustainability reporting: economic analysis and literature review

2021

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This study collates potential economic effects of mandated disclosure and reporting standards for corporate social responsibility (CSR) and sustainability topics. We first outline key features of CSR reporting. Next, we draw on relevant academic literatures in accounting, finance, economics, and management to discuss and evaluate the potential economic consequences of a requirement for CSR and sustainability reporting for U.S. firms, including effects in capital markets, on stakeholders other than investors, and on firm behavior. We also discuss issues related to the implementation and enforcement of CSR and sustainability reporting standards as well as two approaches to sustainability reporting that differ in their overarching goals and materiality standards. Our analysis yields a number of insights that are relevant for the current debate on mandatory CSR and sustainability reporting. It also points scholars to avenues for future research.

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Section: Implementation Issues For Mandatory Csr Reporting Standardsmentioning

confidence: 99%

Mandatory CSR and sustainability reporting: economic analysis and literature review

2021

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“…Finally, Wang, Hsieh, and Sarkis () suggest that firms with the weak CSR performance disclose less readable information but Ben‐Amar and Belgacem () report a direct relationship between a firm's CSR orientation and the complexity of management disclosures. While some empirical evidence supports the existence of bad news obfuscation (Chakrabarty, Seetharaman, Swanson, & Wang, ; Li, ; Lo et al, ), other researchers note that there remains uncertainty about precisely where, and to what extent, readability manipulation may exist in management narratives (Ajina et al, ; Dyer et al, ).…”

Section: Review Of the Literature And Hypotheses Developmentmentioning

confidence: 99%

“…There was a need for further contributions to works covering existing theories of financial disclosure by investigating managers' use of linguistic features in their corporate communications (Robinson & Lokanan, ; Rutherford, ). Researchers note that there remains uncertainty concerning where manipulation may exist in management narratives (Ajina et al, ; Dyer et al, ). According to Chung, Hrazdil, Novak, and Suwanyangyuan (), fine‐grained data offers incremental value over summary information.…”

Section: Review Of the Literature And Hypotheses Developmentmentioning

confidence: 99%

“…The characteristics of the U.S. Securities and Exchange Commission (SEC) accounting enforcement targets have been explored in recent research (Beasley, Carcello, Hermanson, & Neal, ; Cao, Leng, Feroz, & Davalos, ; Dechow, Hutton, Kim, & Sloan, ; Files, Sharp, & Thompson, ; Karpoff, Lee, & Martin, ; Leng, Feroz, Cao, & Davalos, ; Lo, Ramos, & Rogo, ; Minhas & Hussain, ). However, there was a need for further contributions to works covering existing theories of financial disclosure by investigating managers' use of linguistic features in their corporate communications (El‐Haj, Rayson, Walker, Young, & Simaki, ; Robinson & Lokanan, ; Rutherford, ) and considering the specific topics being disclosed (Ajina, Laouiti, & Msolli, ; Dyer, Lang, & Stice‐Lawrence, ; Merkley, ). Absent from the IM research was an exploration of managers' disclosures concerning regulatory enforcement investigations.…”

Section: Introductionmentioning

confidence: 99%

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Disclosure characteristics of firms being investigated by the SEC

Demaline

2019

J Corp Accounting Finance

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The purpose of this study is to explore the characteristics of managers' 10-K disclosures concerning U.S. Securities and Exchange Commission (SEC) investigations. This study examined the quantitative linguistic characteristics of 171 company disclosures discussing the firms' involvement in an SEC investigation related to fraudulent financial reporting. The results suggest that these disclosures have a relatively negative sentiment and were relatively difficult to read. The results failed to provide sufficient statistical evidence to support the notion that managers systematically attempt to blame external parties for the potential wrongdoing and related investigation. The study results add to the stream of research related to impression management in corporate disclosures while also supplementing research on how companies respond to negative events such as regulatory investigations. This study may be of interest to financial regulators, investors, and accounting standards setters, all of whom are interested in maximizing the usefulness of financial information. K E Y W O R D SAAER, financial disclosure, impression management, readability, SEC enforcement, tone

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“…The complexity in the disclosure of information is also the object of analysis from the perspective of disclosure theory. From this perspective, the discussions can be divided into two lines: (i) that which considers prolonged and technically complex disclosure as beneficial (Guay et al, 2016;Li, 2008;Verrecchia, 2001); and (ii) that which considers prolonged and complex disclosures as characteristics that can make understanding difficult and obscure important information (Dyer, Lang & Stice-Lawrence, 2016;Melloni, Caglio & Perego, 2017;Navarro-García & Bastida, 2010).…”

Section: Introductionmentioning

confidence: 99%

Complexity in financial disclosure: the role of the characteristics of hiring firms

Zambra

Malaquias

Rech

et al. 2019

Rev. contab. finanç.

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The main purpose of this research is to analyze the relationship between characteristics of hiring firms and the perception of auditors/accountants that provide services to them regarding complexity in the elaboration/disclosure of sensitivity analyses and risk management. We seek to analyze whether characteristics of firms that have a better level of disclosure could also be associated with the complexity perceived by the professionals that provide services to such firms concerning the information to do with sensitivity analyses and risk management. Information about risk management arouses considerable debate in the area of accounting and finance; nevertheless, how it is addressed, from the point of view of the professionals, still deserves more attention. The results of this study may lead to an improvement, or even a revision, of the standards related with sensitivity analyses and risk management involving financial instruments. The study sample was composed of respondents from South America, namely accountants and auditors from Brazil and Chile. The perception of complexity was evaluated through a structured questionnaire, which was applied using electronic forms. Regarding the explanatory variables, the quantitative model considers the following characteristics of hiring firms: auditor type; firm size; industry; listed firms; transparency; exporting firms. The main advancement provided by this research lies in it revealing that some characteristics of companies usually associated with better levels of disclosure are not necessarily reflected in the perception by accountants/auditors of lower levels of complexity in the elaboration/disclosure of sensitivity analyses and risk management.

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Do managers really guide through the fog? On the challenges in assessing the causes of voluntary disclosure

Cited by 40 publications

References 9 publications

Mandatory CSR and sustainability reporting: economic analysis and literature review

Mandatory CSR and sustainability reporting: economic analysis and literature review

Disclosure characteristics of firms being investigated by the SEC

Complexity in financial disclosure: the role of the characteristics of hiring firms

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