Emerging Markets Finance and Trade · 2021 · 21 citations · 12 references
BusinessAccountancyAccountingAuditingCorporate DisclosureCorporate ReportingAnnual Report CommunicationAnnual ReportingFinancial ReportingFinancial Statement AuditsFinancial StatementsRegulatory ReportingAnnual Financial ReportsAnnual Report ToneAnnual Statement ReportingAudit Report ToneInformation DisclosureInquiry LettersRegulatory DisclosureRegulatory Impact On Reporting
This paper examines the impact of the tone used in the annual reports of listed companies on the probability of regulatory inquiries from 2014 to 2019. The empirical results verify that the more positive tone of the annual report, the more it can exert a psychological framing effect, which makes the regulator less likely to issue an annual report inquiry letter. Further analysis shows that this impact that the tone of annual reports has on the probability of a regulatory inquiry is significantly weakened when the company has irregularities or has been issued a modified audit opinion by the auditor. Overall, the results provide the basis for the government to regulate the information disclosure of the annual reports.
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Frames, Biases, and Rational Decision-Making in the Human Brain
Benedetto De Martino, Dharshan Kumaran, Ben Seymour et al. · Science · 2006 · 1.6K citations · Full text
Restoring Trust after Fraud: Does Corporate Governance Matter?
David Farber · The Accounting Review · 2005 · 1.2K citations