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The purpose of the study was to examine the effects of prescription drug advertising health risk disclosure prominence and the mediating role of introspective message attention.

An experiment was conducted to test varying levels of health risk disclosure prominence in prescription drug advertising (high vs low).

The results showed that a more prominent health risk disclosure than a less prominent one enhanced introspective message attention, risk knowledge and risk perception of the drug’s side effects. In addition, the introspective attention mediated the health risk disclosure effects on risk knowledge and risk perception.

The artificial experimental setting should be considered. In addition, various therapeutic categories and health risk disclosure formats need to be examined.

To ensure fair balance in prescription drug advertising, message designers should present a sufficient level of health risk disclosure prominence.

To encourage consumers to make informed prescription drug decisions, health risk information provided through prescription drug advertising may be important. Health-marketing promotional messages should address fair balance by considering health risk disclosure prominence.

Although the FDA has issued its risk communication guidance draft for pharmaceutical manufacturers to ensure fair balance between benefit and risk information in pharmaceutical promotion, little empirical research has been conducted to test the health risk disclosure prominence effects on consumers’ health-related perception about the drug. This study fills the gap in the literature.

The purpose of this paper is to identify the web-based features of corporate social responsibility (CSR) disclosure that play a role in making CSR information prominent to investors and give the information better recognition for investment decisions.

The authors posit a positive association between the company’s capital market performance and the web-based features used for CSR disclosure by the company. The authors argue that the more effective the feature is in enhancing the prominence of CSR information, the higher is the share turnover and market value of shares of a company, and the lower is its share prices’ bid-ask spread. Five specific web-based features, namely, the location, accessibility, medium, variety and extent of disclosure are identified as features used for web-based CSR disclosure. The research framework is drawn from Brennan and Merkl–Davies’ (2013) impression management strategies and Merton’s (1987) “investor recognition hypothesis”.

The findings show that visual and structural emphases of CSR information via specific web-based features enhance information prominence and could favourably influence investors’ impression towards the company. Investors are likely to make investment decisions in favour of the company, resulting in a higher share turnover along with increased market value of the shares of the company and lower bid-ask spread of its share prices.

The paper highlights the significance of utilisation of web-based features in enhancing CSR information prominence for impression management purposes.

The findings have the potential to benefit preparers, users and policymakers by enhancing their knowledge and understanding of the utilisation of web-based CSR disclosure features. Specifically, preparers will be more aware of web-based feature(s) that could be useful in projecting CSR-related information to their stakeholders.

The study will help enhance the dissemination of web-based CSR information.

The study adds to the literature on web-based CSR disclosure, by developing a structured approach to examine the effectiveness of web-based features for investors’ impression management.

The purpose of this paper is to introduce a model to assess web-based corporate social responsibility (CSR) disclosure prominence and use this model to explore the prominence of CSR disclosures of listed New Zealand (NZ) companies.

A CSR Disclosure Prominence Indicator Model was constructed using five key elements that include the dissemination medium, accessibility, location, content variety and extent of CSR disclosures. The websites of 65 of the largest listed NZ companies from 11 industry groupings were explored through this model.

A significant proportion (81.5 per cent) of listed NZ companies in the sample were utilising their websites for communicating CSR information to stakeholders. The CSR Disclosure Prominence Indicator Model revealed that companies that have CSR-related disclosures on their websites used multiple dissemination media and locations to enhance prominence of such disclosures. CSR commentary on the webpage was the most prominent dissemination medium due to its ease of accessibility, with a separate CSR webpage being the most prominent location. Environmental performance and society-related issues received the most prominent emphasis. Although companies from “sensitive” industry sectors appeared to disclose their CSR information more prominently, those from “less sensitive” industries also attempted to make their CSR disclosure more prominent and noticeable through strategic placement and through the extent of disclosure.

The paper highlights the importance of managing web-based CSR disclosure prominence, thereby highlighting its significance in communication of CSR information.

Prominently placed CSR disclosures could be a significant platform for companies to strategically manage their image and identity. The CSR Disclosure Prominence Indicator Model could be utilised by companies to effectively assess and manage the prominence of CSR disclosures on their websites for more effective communication with stakeholders.

The paper complements earlier studies on CSR disclosures by constructing and applying a model to assess the prominence of web-based CSR disclosures.

This study investigates the use of the internet by the largest companies based in Sweden and Spain to communicate their engagement in corporate social responsibility (CSR) activities. Its purpose is to analyse to what extent, if any, are there differences in the CSR communication on the web sites companies from these two countries.

The paper examines CSR communication on the internet by companies based in Sweden and Spain. Non-parametric statistics are used to analyse some factors that influence disclosure, namely country, industry affiliation, profitability, and size.

Findings suggest that in spite of the existence of a high degree of similarity between CSR communication practices, companies from Spain place social responsibility information in more prominent sections and devote more space to said information. Swedish companies are found to disclose more their codes of conduct/ethics and CSR-related press clips and published articles.

The sample is small. There may be content analysis issues associated with subjectivity in the coding process.

It adds to the scarce research on CSR communication by companies in these countries by providing new empirical data and extends prior research comparing such practices in different international models of CSR.

Effective August 23, 2004, the US Securities and Exchange Commission (SEC) requires all firms to disclose restatements via an item 4.02 Form 8‐K filing. However, a significant number of firms continue to disclose restatements using means other than an 8‐K. Commonly referred to as stealth restatements, the purpose of this paper is to investigate the materiality of restatements disclosed in either the 10‐K or the 10‐Q by comparing them to those disclosed via 8‐K.

Univariate and multivariate analyses compare the characteristics of and the market reaction to 10‐K/10‐Q restatements to those of 8‐K restatements.

The authors find stealth restatements are more likely to be those not affecting net income, with longer filing delays, not subject to SEC investigation and made by firms audited by non‐big four accounting firms. The authors document a negative market reaction to 8‐K restatements around the restatement disclosure date. However, for stealth restatements they find no market reaction around the 10‐K/10‐Q filing date and for up to 22 trading days after the 10‐K/10‐Q filings. Research limitations/implications – The study shows a significant difference in materiality between stealth and 8‐K restatements.

The study is important to investors, regulators and academics because it supports the notion that stealth restatements include less significant information relative to that disclosed in 8‐K restatements. This result is in line with the SEC disclosure requirement.

The significant number of stealth restatements since 2004 begs the question as to what kind of information is being disclosed in these restatements. The paper responds to this question.

The purpose of this study is to investigate the association between nonaudit services (NAS) and out-of-period adjustments (OOPAs). Over the years, the number of OOPAs has risen while the number of restatements has decreased. This could indicate an improvement in financial reporting quality. It could also indicate the use of a type of stealth restatement for opportunistic purposes. These less prominent restatements are more likely to go undetected and could perpetuate opportunistic disclosure and mitigate the likelihood of unfavorable market reactions.

The authors use a two-stage multivariate regression analysis to examine the relationship between NAS and the reporting of an OOPA. The authors use prior research on NAS to guide the model development. The authors perform several robustness checks including different types of NAS and different characteristics of OOPAs.

The results indicate that NAS has a significantly negative association with the existence of OOPAs. The core findings suggest that NAS does not impair auditor independence. Rather, greater amounts of NAS may contribute to knowledge spillover, which leads to higher financial reporting and audit quality. The results are robust to several additional tests.

The results raise interesting implications for regulators, executives, auditors, investors and future research. The authors provide insight into the relationship between NAS and auditor independence.

To the best of the authors’ knowledge, prior research has not considered the effect of NAS on OOPAs. The authors contribute to the literature by providing evidence that OOPAs, a form of stealth restatements, is an important consideration in audit quality research.

The purpose of this paper is to explore the impact of a particular firm’s stakeholder orientation, particularly employee orientation, on corporate communications with stakeholders concerning financial irregularities.

This study explores the impact of a particular firm’s stakeholder orientation, particularly employee orientation, on corporate communications with stakeholders concerning financial irregularities. Using a sample of 762 firm restatements, the authors separate their observations by disclosure transparency (high or low transparency of disclosure) and use logit regressions to examine whether companies with stronger employee orientation make more or less transparent restatement disclosures.

The findings show that higher levels of investment in employee orientation are associated with less transparent restatement disclosures. Further, examining a subsample of restatements in which managers may have greater discretion over how a restatement is disclosed confirms this finding. However, supplemental tests show that increased external monitoring may mitigate these effects.

The findings provide support that other stakeholders, such as shareholders, should weigh the potential pros/cons of management investments in corporate social responsibility (CSR). These concerns are more important now as firms continue to embrace a stakeholder-focused model of management which allocates resources to numerous stakeholder groups.

This paper extends the growing body of research that assesses the impact of CSR on firm outcomes (Kim et al., 2012; Guo et al., 2016; Hmaittane et al., 2019). Further, this paper contributes to the disclosure transparency literature by finding an association between CSR investment levels and the manner in which a firm discloses a restatement.

Management has considerable discretion over how to present and announce earnings components that are either unusual or infrequent, but not both (hereafter referred to as special items). In this study, we study the independent and joint effects of the accounting presentation format of, and the level of announcement prominence given to income-decreasing special items on investors’ judgments about the persistence of declining earnings.

Our study uses a 3 (format) × 2 (prominence) between-subjects design. In the experiment, participants act as proxies for nonprofessional investors to assess the persistence of a hypothetical firm’s declining earnings and make investment decisions.

Our results suggest that investors’ judgments are influenced by accounting presentation format and the level of announcement prominence. With respect to format, both classification and disaggregation affect investors’ assessment of earnings persistence. In addition, the degree of prominence given to an income-decreasing special item, albeit self-serving and not audited, introduces additional influence beyond that of accounting presentation format. In particular, we find that announcement prominence has a greater effect when the special item is aggregated with other operating expenses than when the special item is presented under the two other alternatives.

Our study contributes to the literature by demonstrating that presentation format and announcement prominence both have significant impact on investors’ judgments and decisions, and that their effects are interactive. Our results also indicate that future research can possibly gain better insight if it considers the accounting attributes of the special items in addition to their economic attributes.

This article examines the first action by the US Securities and Exchange Commission to enforce the “equal-or-greater-prominence” requirement of its rules governing the presentation by SEC-reporting companies, in their SEC filings and earnings releases, of financial measures not prepared in accordance with generally accepted accounting principles (GAAP).

This article provides an in-depth analysis of the equal-or-greater-prominence rule and the SEC’s enforcement posture in the context of the SEC’s concern that some companies present non-GAAP financial measures in a manner that inappropriately gives the non-GAAP measures greater authority than the comparable GAAP financial measures.

Although the appropriate use of non-GAAP financial measures can enhance investor understanding of a company’s business and operating results, investors could be misled about the company’s GAAP results by disclosures that unduly highlight non-GAAP measures. The SEC’s enforcement action signals a focus on the manner in which companies present non-GAAP financial measures as well as on how they calculate the measures.

This article provides expert guidance on a major SEC disclosure requirement from an experienced securities lawyer.

The economic downturn and financial meltdown in the changing retirement savings and pension landscape in the US placed individual investors and financial companies at risk. Recognizing the need for more financial literacy among investors, the US financial services companies for retirement plans and investment options (i.e. the retirement financial services providers (RFSPs)) have stepped up consumer marketing, particularly through creation of corporate websites. Seeing their potential for increasing literacy and aiding consumer financial decisions, a majority of RFSPs are promoting websites and a large number of consumers use them. With this backdrop, the purpose of this paper is to examine the use of these websites and their conformity to existing regulations regarding design and structure.

The present study used a quantitative content analysis to examine the types of disclosure information presented on the corporate websites of RFSPs during 2013-2015. It also examined the adherence to the Federal Trade Commission’s (FTC) clear and conspicuous standards (CCS) disclosure guidelines over the three-year period. Finally, this study examined the levels of financial literacy activities employed on 164 RFSPs’ websites over the three-year period.

This study shows that RFSPs are increasingly providing disclosure information for target consumers via their websites. Although problems still exist with the presentation of that material in terms of the FTC’s suggestions for prominence, there have been some improvements in compliance with proximity of disclosures. In addition, just under one-fourth of the RFSPs were providing tactics and features on their websites to potentially aid in the creation and maintenance of critical financial literacy and acumen.

The key point emerging from this analysis is that financial services providers, regulators, advocacy groups, and policymakers should continue to address varying levels of financial literacy activities to promote the deliberation and discussion of the retirement issues and topics across media while facilitating the provision and dissemination of financial information and data in a clear and conspicuous manner.

This is the first study to explore the content of RFSPs’ websites with regard to disclosure information, adherence to FTC CCS disclosure guidelines, and the use of techniques related to various levels of financial literacy from 2013-2015.