To read the full version of this content please select one of the options below:

Measuring annual report narratives disclosure: Empirical evidence from forward-looking information in the UK prior the financial crisis

Suzan Abed (Accounting Department, Applied Science University, Amman, Jordan)
Basil Al-Najjar (Birkbeck University of London, London, UK)
Clare Roberts (Business School, University of Aberdeen, Aberdeen, UK)

Managerial Auditing Journal

ISSN: 0268-6902

Article publication date: 4 April 2016



This paper aims to investigate empirically the common alternative methods of measuring annual report narratives. Five alternative methods are employed, a weighted and un-weighted disclosure index and three textual coding systems, measuring the amount of space devoted to relevant disclosures.


The authors investigate the forward-looking voluntary disclosures of 30 UK non-financial companies. They employ descriptive analysis, correlation matrix, mean comparison t-test, rankings and multiple regression analysis of disclosure measures against determinants of corporate voluntary reporting.


The results reveal that while the alternative methods of forward-looking voluntary disclosure are highly correlated, important significant differences do nevertheless emerge. In particular, it appears important to measure volume rather than simply the existence or non-existence of each type of disclosure. Overall, we detect that the optimal method is content analysis by text-unit rather than by sentence.


This paper contributes to the extant literature in forward-looking disclosure by reporting important differences among alternative content analyses. However, the decision regarding whether this should be a computerised or a manual content analysis appears not to be driven by differences in the resulting measures. Rather, the choice is the outcome of a trade-off between the time involved in setting up coding rules for computerised analysis versus the time saved undertaking the analysis itself.



The authors are grateful to the Applied Science Private University, Amman, Jordan, for the financial support granted to this research project (Gran No. DRGS-2015-2016-36).


Abed, S., Al-Najjar, B. and Roberts, C. (2016), "Measuring annual report narratives disclosure: Empirical evidence from forward-looking information in the UK prior the financial crisis", Managerial Auditing Journal, Vol. 31 No. 4/5, pp. 338-361.



Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited