Bassyouny, H. and Abdelfattah, T. (2021) Executives vs. Governance: Who Has the Predictive Power? Evidence from Narrative Tone. Review of Quantitative Finance and Accounting. 0924-865X.
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Bassyouny_Abdelfattah_2021_RQFA_Executives_vs_governance_Who_has_t ... (758kB) |
| Item Type: | Article |
|---|---|
| Abstract: | This study aims to investigate not only Narrative Disclosure Tone predictive power, but also who has this power within companies to predict future performance in the UK context (executive vs. governance). We conduct a computerized textual analysis to measure the tone of UK annual reports narratives. Our results contribute to accounting and financial reporting literature by showing that corporate narrative tone can predict future performance. However, answering our main question about who has this predictive power, we found executives’ reporting tone has the power to predict a company’s future performance but not governance tone. Considering the moderation effect of the 2014 financial reporting guidance, we found this guidance increases corporate narrative tone power in general and executive tone in particular in predicting future performance. Moreover, the current study contributes to financial reporting literature by providing a UK evidence, which operates under the principles-based approach with more flexibility in financial reporting than the US context that follows the rules-based approach. Finally, this study has practical implications for regulators and external users of financial reporting. |
| Additional Information: | Journal has 12 month embargo for AAMs. |
| Uncontrolled Keywords: | Accounting, Finance, General Business, Management and Accounting |
| Creators: | Bassyouny, Hesham and Abdelfattah, Tarek |
| Faculties, Divisions and Institutes: |
Faculties > Faculty of Business & Law > Accounting & Finance University Faculties, Divisions and Research Centres - OLD > Research Centre > China and Emerging Economies Centre Research Centres > China and Emerging Economies Centre |
| Date: | 18 June 2021 |
| Date Type: | Publication |
| Journal or Publication Title: | Review of Quantitative Finance and Accounting |
| Language: | English |
| DOI: | https://doi.org/10.1007/s11156-021-00997-y |
| ISSN: | 0924-865X |
| Status: | Published / Disseminated |
| Refereed: | Yes |
| Related URLs: | |
| URI: | http://nectar.northampton.ac.uk/id/eprint/14784 |
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