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The authors investigate whether abnormal tone in corporate narrative disclosures is associated with earnings management and earnings quality, in an emerging market context. Based on agency theory and opportunistic/impression management perspective, this study examines whether executives manage disclosure tone to support their opportunistic behavior, when using earnings management.

This study uses a sample of earnings press releases of publicly traded firms in the MENA region during 2014–2019. It employs textual analysis to measure disclosure tone. The authors estimate abnormal disclosure tone after controlling for firm characteristics. Discretionary accruals proxy for earnings management and are estimated using Modified Jones model. Earnings quality is measured using accounting-based and market-based proxies: earnings smoothness, persistence, predictability and value relevance/informativeness.

Results show a positive association between abnormal disclosure tone and earnings management. Additionally, results show that earnings persistence is higher for firms with lower levels of abnormal disclosure tone. Results are sustained for earnings smoothness, but not for predictability and value relevance/informativeness.

Results provide initial evidence of management's use of tone management jointly with earnings management. This adds to prior studies adopting the opportunistic perspective of disclosure tone, through showing that discretionary tone in narrative disclosures can be strategically used by management to influence investors' perceptions.

The results provide valuable insight to board of directors, auditors and market participants on the possible biases emerging from tone of narrative disclosures in corporate reports. For regulators and standard-setters, results shed light on the need for regulations and rules beyond financial statements, to guide disclosure of narrative information in different corporate reports.

This study contributes to the rare evidence that investigates textual disclosure characteristics to uncover management's opportunistic practices and assess earnings quality. Where majority of studies concentrate on developed markets, this study provides novel evidence of emerging markets by examining the association between abnormal disclosure tone and earnings management/earnings quality. Also, it validates the tone management model proposed by Huang et al. (2014) for capturing tone manipulation.

The purpose of this paper is to provide a multidimensional model for assessing the quality of corporate environmental reporting (CER) incorporating both preparer- and user-based views.

As opposed to frequently used researcher-chosen proxies, the authors used an online questionnaire asking preparers and users how they assess the quality of a company’s environmental report.

The analysis of the responses of 177 users and 86 preparers shows that quantity was not perceived as the most significant element in determining quality. Besides quantity, the respondents also perceived information types, measures used, themes disclosed, adopting reporting guidelines, inclusion of assurance statement and the use of visual tools as significant dimensions/features of reporting quality.

The online questionnaire has some limitations, especially in terms of researcher being absent to clarify meanings and, hence, possibilities that respondents may misinterpret the questionnaire elements.

Considering that robust, reliable measurement of reporting quality is difficult, preparers, standard setters and policy makers need multidimensional quality models that incorporate both users’ perceptions of quality and preparers’ pragmatic understanding of the quality delivery process. These will make the preparers informed of whether their disclosure may be falling short of users’ expectations.

Amid, increasing complexity of CER, the research contributes to the growing body of literature on assessing the quality of CER by developing a less subjective, multidimensional, preparer–user-based quality model. This innovative quality model goes beyond the traditional quality models, subjective author-based quality measures. Focussing on the three dimensions of reporting quality – content, credibility and communication – it also offers a high-level resolution of meaning of CER quality.

The purpose of this paper is to examine the quality of voluntary intellectual capital (IC) by universities in New Zealand, Australia, and the UK.

An IC framework was developed to measure IC reporting in the university sector. Content analysis was used to analyse the 2011 annual reports before a three-year comparative analysis of 90 universities (eight New Zealand universities, 38 Australian universities, and 44 UK universities) was undertaken.

New Zealand and Australian universities outperformed the UK universities in terms of IC disclosures. Additionally, the study found moderate increases in the levels of IC disclosures over the period of the study. The quality of IC disclosures by New Zealand universities was generally higher than their Australian and UK counterparts. Internal capital and human capital were the most disclosed categories with external capital being the least frequently disclosed in all three countries. However, the quality of external capital disclosures was higher than internal and human capital. Finally, most IC disclosures were narrative in nature.

The framework developed in this study could be adapted, further enhanced, and then applied to exploring IC disclosures in higher educational institutes in other jurisdictions.

This is the first comparative analysis of IC disclosures made by universities in three countries.

The purpose of this study is to estimate the effect of information disclosure on firm value for firms in the Integrated Latin American Market (MILA) over the period 2011–2017.

The study uses structural equation modeling (SEM), where the latent variable “Disclosure Quality” is measured using five textual analysis variables as indicators. The final sample is composed of 1,412 observations representing 198 firms from which we were able to collect annual reports and financial information required.

The authors find a positive and statistically significant effect of “Disclosure Quality” on firm value. The indirect effect of language on firm value is also captured. Text similarity, negative tone, readability and text length in corporate disclosure are negatively related to firm value while using positive tone is positively related. In the exploratory analysis, the authors have significant effects of textual measures on disclosure quality.

The research is original and unique as it approaches the relation between disclosure quality and market valuation of the firm using SEM for firms participating in the MILA.

El propósito es estimar el efecto de la calidad en la revelación de información sobre el valor de la firma para empresas que hacen parte del mercado integrado Latinoamericano (MILA) durante el periodo 2011–2017.

El estudio utiliza un modelo de ecuaciones estructurales (SEM), donde la variable latente “Calidad de la información” es medida usando cinco variables de análisis textual como indicadores. La muestra final está conpuesta de 1,412 observaciones que representan 198 empresas para las cuales se pudo recolectar los reportes anuales y la información financiera requerida

Nosotros encontramos una relación positiva y estadísticamente significativa entre la variable “Calidad de la información” y valor de la firma. El efecto indirecto del lenguaje en el valor de la firma es igualmente observado. La similaridad en el texto, el tono negativo, la legibilidad y el largo del texto en la revelación corporativa están relacionados de manera negativa con el valor de la firma mientras que el tono positivo está relacionado de manera positiva. En el análisis exploratorio, nosotros encontramos un efecto estadísticamente significativo entre las medidas de texto y la calidad de la revelación.

La investigación es original y única en cuanto aproxima la relación entre calidad de la revelación y desempeño de la firma usando un modelo de ecuaciones estructurales para las firmas participantes del mercado integrado Latinoamericano (MILA).

This study aims to examine the moderating effect of media exposure and media legitimacy on the environmental audit committee (EAC) regarding environmental disclosure quality as measured by voluntary and timely disclosure.

This paper was based on a sample of 81 French nonfinancial companies listed on the SBF 120 index and covered a six-year period; from 2014 to 2019. To test the hypotheses, a feasible generalized least squares regression was applied. Moreover, the authors checked the results using an additional analysis and the generalized method of moment model for endogeneity problems.

The results obtained show that for 482 French firm-year observations during the period 2014–2019, the media exposure does not play a moderating role between the EAC and the voluntary environmental disclosure; However, it plays a moderating role between the EAC and the timely environmental disclosure. The results also show that media legitimacy plays a moderating role between the EAC and the quality of environmental information. After testing for endogeneity problems, the findings remain unchanged.

The findings of this study may be of interest to academic researchers, practitioners and regulators who are interested in determining the quality of environmental disclosure by considering the role of the EAC while giving a role to media exposure and media legitimacy in the French context. Considering the EAC as a powerful source of effective corporate governance to improve the quality of environmental disclosure for decision-making, the research provides valuable insights for policymakers and managers on the importance of this mechanism and the importance of the environmental media and its tone in making environmental reporting useful and relevant.

The originality of the work lies in the fact that it is one of the first works that deal with the moderating effect of media exposure on the relationship between the EAC and the quality of environmental information disclosure measured by voluntary and timely disclosure. To the best of the authors’ knowledge, no previous empirical studies have been conducted on this relationship in the French context or in other contexts.

This study aims to investigate the relationship between the quality and volume of carbon emission disclosures (CED) in UK higher educational institutions (HEIs), with an emphasis on the impact of the Higher Education Funding Council of England (HEFCE) carbon reduction target on such disclosures.

Based on stewardship theory, this study explores the decision usefulness of the CED by HEIs, i.e. whether a larger volume of CED means that it is more useful to readers and stakeholders. A framework was developed to measure the CED quality. The relationships between CED volume and quality were examined using the ordered probit regression model.

CED volume in annual reports and HEFCE carbon reduction target were found to have a significant positive impact on CED quality. There exists a void in research with carbon disclosures by HEIs, an area which has been widely researched with regard to profit-seeking organisations. The study adds to the earlier related studies by its contribution about HEIs to the disclosure literature.

The study is distinct in investigating the relationship between volume and quality of CED by HEIs. However, the impact of CED would need to be clear to motivate the HEIs to engage in such disclosure. Thus, future studies should investigate the impact of both volume and quality of CED on reputation.

The study recognises that the characteristics of HEIs are distinct from profit-seeking organisations, which have been widely researched in literature. Generalising the research studies on profit-oriented companies for the most publicly funded UK HEIs may mislead any outcome. This study is distinct from the reader’s point of view in exploring whether more CED is more useful in better decision-making.

The purpose of this paper is to investigate how disclosure quality affects the relation between chief executive officer (CEO) power and the variability of firm performance. Moreover, it also examines the impacts of ownership structure and disclosure quality on the relationship between CEO power and performance variability.

Empirical research was carried out.

It was found that: first, firms whose CEOs have more power will exhibit higher performance, but display more variability in firm performance. Second, disclosure quality can affect the relationship between CEO power and the variability of firm performance and more specifically, increase in disclosure quality reduces the performance variability caused by CEO power. Third, the effects of CEO power on the variability of firm performance are higher in state‐owned firms than in non‐state‐owned firms. Moreover, the effect of higher disclosure quality for lowering the variability of firm performance is stronger in state‐owned firms than in non‐state‐owned firms.

First, the authors find that when evaluating corporate governance practices, both firm performance and the variability of firm performance should be taken into account. Second, this paper fills the void in the extant literatures by demonstrating that CEO power, as well as disclosure quality, can affect firms' operational risk. Third, for firm owners, when firms are facing large uncertainty from institutional environment, a great trade‐off between firm performance and operational risk, when determining the degree of CEO power, will play an important role in corporate governance.

This paper complements the extant literatures by examining the impacts of CEO power to firm output from the dimensions of both firm performance and operational risk; and by examining the impacts of ownership structure and disclosure quality on the relationship between CEO power and performance variability.

Using a sample of UK FTSE 350 companies continuously listed in the period 2007-2011, this paper aims to investigate the impact of the quality and quantity of corporate environmental disclosure on analysts’ recommendations.

The study adopted a method based on that developed by Beck et al. (2010). The “CONI” approach measures information diversity, content and volume. It involves dual qualitative and quantitative measurement, which is suitable for the purpose of this paper.

The findings suggest that the quality of environmental disclosure is associated with more favourable buy recommendations. Mere volume of disclosure is insufficient for effective signalling about environmental strategies. Further tests show that only discretionary quality disclosure that is influenced by managerial intervention receives optimistic recommendation, suggesting that analysts are more likely to give better recommendation when managers have a higher level of discretion in their disclosures.

This paper contributes to the academic literature by empirically examining the association between sell-side analyst recommendations on both innate and discretionary components of environmental disclosures (quality and volume) within the UK context. This is a significant extension of the existing literature, which has focused on the related association between analyst recommendations and corporate social responsibility, mainly measured by corporate social responsibility ratings or a dummy variable reflecting the existence of supplementary corporate social responsibility reports in different international setting. The topic is of interest to contemporary accounting scholars and responds to calls for more research into how analysts use nonfinancial data such as environmental data in making recommendations.

This study aims to provide empirical evidence on the determinants of voluntary integrated reporting (<IR>) disclosure quality.

The samples include companies from the Integrated Reporting Examples Database on the International Integrated Reporting Committee’s (IIRC) website, except South Africa and Brazil, where reporting is mandatory. The final sample includes 29 countries, with 148 companies and 592 observations for the study period 2014–2017. Content analysis is used to measure <IR> disclosure quality derived from the <IR> principles and elements published by IIRC (2013). The fraction regression probit model is used to test the proposed hypothesis.

This study provides empirical evidence that competition from new entrants and country-level accounting competence encourage companies to implement the International Integrated Reporting Framework (IIRF). Signaling theory and diffusion of innovation theory can be used to explain this association. Meanwhile, product market competition of existing rivals has been found to reduce the adoption of the <IR> framework, which is consistent with the proprietary cost theory. Finally, this study finds that company reputation does not affect voluntary <IR> disclosure quality.

This study did not examine the barriers to entry to explain the effect of competition from new entrants as a possible determinant of <IR> disclosure quality. Furthermore, the inclusion of <IR> in the accounting curriculum of universities and certification bodies in certain countries has not been considered as a control variable. The results might also be limited to companies that voluntarily submitted into the Integrated Reporting Examples Database on the IIRC website. All these limitations provide ample avenues for future research.

This research provides implications for governments and standard setters to further sharpen the competence of accountants through memberships in professional accountancy organisations or through training and seminars related to <IR>. The results also suggest that universities should include the topic of <IR> in the accounting program curriculum to increase the understanding of prospective accountants about this reporting regime. The results also show differences on the impact of competition between new entrants and existing rivals on <IR> disclosure quality. This can be used by IIRC or other standard setters to predict the <IR adoption>.

This study uses the diffusion of innovation theory to explain the association between country-level accounting competence and <IR> disclosure quality. Few studies have researched this association. The results show that a country’s accounting competence increases the application of the IIRF in corporate reporting. <IR> has been considered an innovation in corporate reporting and can be implemented by the company if its professional accountants have enough knowledge of this reporting framework.

The purpose of this paper is to investigate the potential influence of corporate governance mechanisms on risk disclosure quality in Tunisia.

The authors examine 152 annual reports of Tunisian non-financial-listed firms during 2008–2013, and use the manual content analysis method to measure the risk disclosure quality.

The authors find that the quality of risk disclosure in Tunisian companies is relatively low, and also find that the quality of risk disclosure is positively associated with institutional ownership, board independence, the presence of women on the board, the presence of family members on the board and the independence of audit committee. Managerial ownership has a negative effect on risk disclosure quality. Finally, the authors find that the revolution decreases the influence of concentration ownership, government ownership, family ownership and audit committee size on risk disclosure quality.

Using a comprehensive set of corporate governance mechanisms and a new measure for risk disclosure quality in Tunisia, the authors provide the first empirical evidence on the impact of corporate governance mechanisms on risk disclosure quality in a developing country. The study has theoretical and practical implications for both developed and developing countries.