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Factors impacting the credibility of website disclosures

Lori L. Epping (Beacom School of Business, University of South Dakota, Vermillion, South Dakota, USA)
W. Mark Wilder (Patterson School of Accountancy, University of Mississippi, Oxford, Mississippi, USA)

Journal of Financial Reporting and Accounting

ISSN: 1985-2517

Article publication date: 5 July 2011

Abstract

Purpose

The purpose of this study is to examine credibility attributes in a website disclosure venue.

Design/methodology/approach

A total of 100 MBA and Masters of accountancy students participated in an experiment to assess whether specific disclosure characteristics impact the credibility of optimistic, forward‐looking voluntary disclosures. The disclosure characteristics examined include management's ability to meet the current earnings forecast and the disclosure of positive corporate governance qualities. A between‐subjects 2×2 analysis of variance (ANOVA) is used to test the hypotheses.

Findings

The findings indicate that disclosure of positive corporate governance qualities improves the credibility of optimistic, forward‐looking voluntary disclosures. In addition, the credibility of optimistic, forward‐looking voluntary disclosures is greater when management has met its current earnings forecast.

Research limitations/implications

Suggestions for future research include determining whether the importance of credibility attributes differ across presentation venues. For example, credibility attributes that are important in a website venue may be less important when used in conjunction with voluntary MD&A disclosures. In addition, the impact of the disclosure of corporate governance qualities on the credibility of voluntary disclosures may differ across subject groups.

Originality/value

The increasing use of the investor relations pages of corporate websites and the push for enhanced disclosures underscores the importance of understanding voluntary disclosures in a website venue and the related attributes that improve the credibility of these disclosures.

Keywords

Citation

Epping, L.L. and Wilder, W.M. (2011), "Factors impacting the credibility of website disclosures", Journal of Financial Reporting and Accounting, Vol. 9 No. 1, pp. 27-46. https://doi.org/10.1108/19852511111139787

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited