Abstract
Purpose: This study aims to examine the impact of a firm’s financial performance on forward-looking disclosure (FLD) tone and assess whether managers are engaging in impression management or providing truthful explanations when their companies have good or poor performance.
Design/methodology/approach: This study used the content analysis method to measure the tone of FLD in the chairman’s statements of Omani financial institutions for the period 2014–2018. Regression analysis is then used to test the research hypotheses.
Findings: The authors found that good-performing firms are disclosing more good news, whereas poor-performing firms disclose more bad news. The results provided evidence that managers in Oman are providing truthful explanations in their narratives.
Practical implications: This study offered interesting policy and practical implications for policymakers, managers and stakeholders. This paper provided insights to policymakers regarding the FLD tone practices used in the chairman’s reports in Oman. Policymakers should be aware of the importance of the chairman’s reports in the eye of multiple stakeholders and, therefore, need to set guidelines on the type and quality of non-financial voluntary information that should be disclosed in such reports in the context of emerging economies. For academics, evidence has been provided by this study’s results regarding the impact of corporate performance on disclosure tone.
Originality/value: This study offered a novel contribution to disclosure studies by being the first to examine the performance-disclosure narrative tone relation, in the context of Oman.
Design/methodology/approach: This study used the content analysis method to measure the tone of FLD in the chairman’s statements of Omani financial institutions for the period 2014–2018. Regression analysis is then used to test the research hypotheses.
Findings: The authors found that good-performing firms are disclosing more good news, whereas poor-performing firms disclose more bad news. The results provided evidence that managers in Oman are providing truthful explanations in their narratives.
Practical implications: This study offered interesting policy and practical implications for policymakers, managers and stakeholders. This paper provided insights to policymakers regarding the FLD tone practices used in the chairman’s reports in Oman. Policymakers should be aware of the importance of the chairman’s reports in the eye of multiple stakeholders and, therefore, need to set guidelines on the type and quality of non-financial voluntary information that should be disclosed in such reports in the context of emerging economies. For academics, evidence has been provided by this study’s results regarding the impact of corporate performance on disclosure tone.
Originality/value: This study offered a novel contribution to disclosure studies by being the first to examine the performance-disclosure narrative tone relation, in the context of Oman.
Original language | English |
---|---|
Pages (from-to) | 838-863 |
Number of pages | 26 |
Journal | International Journal of Accounting & Information Management |
Volume | 31 |
Issue number | 5 |
Early online date | 7 Nov 2023 |
DOIs | |
Publication status | Published - 13 Nov 2023 |
Keywords
- narrative disclosure tone
- corporate performance
- impression management
- Oman