Tone disclosure and financial performance: evidence from Egypt

Doaa Aly, Khaled Hussainey, Sherif El-Halaby

Research output: Contribution to journalArticlepeer-review

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Purpose: This paper aims to examine the extent to which financial performance (FP) represents one of the main determinants for tone disclosure (TD) in Egyptian annual reports. The authors also measure the bidirectional relationship between TD and FP.

Design/methodology/approach: The manual content analysis is used to measure the levels of TD in annual reports for a sample of 105 firms listed on the Egyptian stock market. The sample covers a three-year period (2011-2013).

Findings:The descriptive analysis in this paper shows that Egyptian firms disclose more good news than bad news. Therefore, the net news disclosure, or net variances, between good/bad is positive. The empirical analysis shows a positive association between the narrative disclosure of good/bad news and FP based on return on assets. The authors also find a highly significant association between the auditor, profitability, leverage, firm growth and financial reporting of good/bad news information. Finally, the results of the ordinary least squares regression show that the causality between the two endogenous variables runs from FP to TD. Thus, TD is determined by FP.

Originality/value: This study offers a novel contribution to disclosure studies by being the first study to examine TD in one of the developing countries.
Original languageEnglish
Pages (from-to)63-74
Number of pages12
JournalAccounting Research Journal
Issue number1
Publication statusPublished - 21 May 2018


  • firm performance
  • content analysis
  • tone disclosure


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