Watch that tone: An investigation of the use and stylistic consequences of tone in corporate accountability disclosures
Accounting, Auditing & Accountability Journal
ISSN: 0951-3574
Article publication date: 17 September 2019
Issue publication date: 17 January 2020
Abstract
Purpose
The purpose of this paper is to investigate: how dimensions of tone vary across different forms of corporate accountability narrative; the impact of tone on readability; and the determinants of tone, including consideration of its use in impression management.
Design/methodology/approach
Using a multi-year sample of listed companies, the authors measure dimensions of tone across multiple narrative types within the annual report and standalone corporate social responsibility report. Statistical analysis is used to investigate variations of tone across narrative type, each dimension’s influence on readability and the role of antecedent factors.
Findings
Analysis reveals that dimensions of tone vary significantly across narrative types (genres) suggesting that tonal patterns form part of the specific stylistic conventions of each genre. Tone is found to be a significant determinant of readability. Little evidence of obfuscation using tone was found, while disclosure type is the most salient determinant of tone.
Practical implications
The study illuminates latent or underlying disclosure norms that can facilitate the identification of “exceptional” cases that do not conform with expected tonal patterns of a particular narrative type and may warrant closer inspection by preparers, auditors or regulators. The issues raised regarding the clarity and balance of textual disclosures highlight the challenges in regulating corporate narratives.
Originality/value
This study highlights that tone is a more nuanced and layered concept than suggested by much of the prior literature. Further, tone ought to be considered in studies examining textual complexity.
Keywords
Citation
Fisher, R., van Staden, C.J. and Richards, G. (2020), "Watch that tone: An investigation of the use and stylistic consequences of tone in corporate accountability disclosures", Accounting, Auditing & Accountability Journal, Vol. 33 No. 1, pp. 77-105. https://doi.org/10.1108/AAAJ-10-2016-2745
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited