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This study examines whether manipulation in attributes of corporate narrative disclosures and the use of graphical representations can bias non-professional investors' judgment towards firms' future performance, in an emerging market context.

The authors conduct three different experiments with a 2 × 2 between-subjects design, using accounting and finance senior undergraduate students to proxy for the non-professional investors.

Results show that simple (more readable) disclosures improve non-professional investors' judgment towards firms' future performance. In addition, it is found that non-professional investors are prone to a recency effect from the intentional ordering of narrative information, when using complex (less readable) narratives. However, no primacy effect is found, when using simple (more readable) disclosures. The results further provide evidence that the inclusion of graphical representations, along with the manipulated narrative disclosures, can moderate the recency effect of information order, when using less readable and complex narrative disclosures.

The results reveal that although the content of corporate disclosures can be objective, neutral and relevant, manipulation in textual features and the use of graphical presentations, can interact to impact how non-professional investors perceive and process the disclosed information. This study provides an Egyptian evidence regarding this issue, as the majority of prior studies concentrate on developed capital markets. In addition, it contributes to prior studies evaluating the appropriateness of the Belief Adjustment Model predictions about the effect of textual presentation order on decision-making, by providing evidence from an emerging market.

Results attempt to increase the awareness of investors and encourage them to use multiple sources of information to avoid the probable bias that can result from management's manipulation of narratives. In addition, the study could be of interest to regulators and standard-setters, where the results reveal the need for guidelines and regulations to guide the disclosure of narrative information and the use of graphical information in corporate reports.

To the best of the authors' knowledge, this is the first study to examine the effect of two impression management strategies in narrative disclosures (readability and information order), along with the use of graphical representations, on non-professional investors' judgment in an emerging market, like Egypt.

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.

This paper aims to use a grounded theory approach to reveal that corporate private disclosure content has structure and this is critical in making “invisible” intangibles in corporate value creation visible to capital market participants.

A grounded theory approach is used to develop novel empirical patterns concerning the nature of corporate disclosure content in the form of narrative. This is further developed using literature of value creation and of narrative.

Structure to content is based on common underlying value creation and narrative structures, and the use of similar categories of corporate intangibles in corporate disclosure cases. It is also based on common change or response qualities of the value creation story as well as persistence in telling the core value creation story. The disclosure is a source of information per se and also creates an informed context for capital market participants to interpret the meaning of new events in a more informed way.

These insights into the structure of private disclosure content are different to the views of relevant information content implied in public disclosure means such as in financial reports or in the demands of stock exchanges for “material” or price sensitive information. They are also different to conventional academic concepts of (capital market) value relevance.

This analysis further develops the grounded theory insights into disclosure content and could help improve new disclosure guidance by regulators.

The insights create many new opportunities for developing theory and enhancing public disclosure content. The paper illustrates this potential by exploring new ways of measuring the value relevance of this novel form of contextual information and associated benchmarks. This connects value creation narrative to a conventional value relevance view and could stimulate new types of market event studies.

Risk information provides information to enable stakeholders to make informed decisions about a company. Corporate communications should be readable and unbiased so as not to hamper disclosure usefulness. This study assesses whether risk disclosures in the integrated reports are readable and unbiased.

The readability and narrative tone of South African listed companies' risk and risk management disclosures as disclosed in their integrated reports are analysed using automated software for the Top 40 JSE listed companies from 2015 to 2019.

The results show that risk and risk management disclosures are unreadable and lack any improvement in readability during the period. Additionally, these disclosures are biased toward narrative tones signalling communality and certainty.

The study adds to the literature on the readability of corporate reports, by focussing on the readability and narrative tone of risk and risk management disclosures during a period of increased scrutiny over the content of such disclosures. Also, by analysing risk disclosure and risk management disclosure separately, and by performing trend analysis to determine whether requirement changes related to content (specifically King IV) affect readability and narrative tones.

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.

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.

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.

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.

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.

This research aims to understand how companies communicate their understanding of water-related challenges and their responses to identify new pathways for addressing this challenge to further advance rising interest in water sustainability strategies of corporations.

Through a content analysis of corporate disclosures, this paper identifies the actions and challenges reported by 35 FTSE 100 companies. These are analyzed quantitatively and qualitatively to explore variations in the subject of disclosure and the narrative framing.

The findings identify a clear split across the types of water sustainability reporting according to the industrial sector and subject of disclosure, linking to different narratives used according to legitimacy pressures.

This paper finds that energy, materials and consumer staples sectors consistently outperform other sectors on the reporting of water issues and the scope which is covered. This has implications for the design of regulations and incentives to increase water sustainability management activities in large companies, which currently under-report.

This paper highlights the need for policy implementation to further integrate water-related topics into company reporting and identifies situations where the narrative disclosed may distort the underlying situation that is being communicated.

This paper explores the narratives used in company reporting to identify the challenges related to water sustainability and the actions taken in response. This can contribute to developing a pathway towards increased water sustainability (e.g. through new policy design).

The purpose of this paper is to investigate whether the political setting (civil war versus temporary truce) in a country has an influence on firms' current narrative, visual, and numerical intellectual capital disclosure being included in the current market value of equity.

Using content analysis for data generation, this study identifies narrative, visual, and numerical intellectual capital disclosure in firms' annual reports. Financial data were obtained from firms' annual reports and the stock exchange. Fixed effect panel regression was conducted separately for the civil war period and temporary truce period.

The paper finds that during the period entirely beset by civil war, the current market value of equity includes net book value and current earnings only, and does not include narrative, visual, or numerical intellectual capital disclosure. During the period of temporary truce, the current market value of equity includes net book value, current earnings, and narrative disclosure, but not visual or numerical intellectual capital disclosure.

The findings provide insights into the effectiveness of disclosure strategies in politically unstable environments.

This study analyses the disclosure strategies in a civil war and temporary truce context.

The objective of this paper is to review the use of the fog index in accounting research.

This paper uses a systematic literature review (SLR) methodology with a sample of 126 accounting research articles. The review applies the theoretical framework of disclosure's stewardship, valuation and accountability roles to identify the contributions and challenges of using the fog index in accounting research.

This paper shows that the primary contribution of the fog index to accounting research relates to the disclosure obfuscation hypothesis (e.g. whether management obfuscates narratives associated with earnings). It also finds that the challenge in using the fog index is in disentangling its measure of firm environmental complexity from narrative obfuscation. Regarding disclosure utility, there is limited evidence on the differential effects of complexity on investor types and whether the fog index findings are associated with narrative obfuscation or firm environmental complexity is driven by investor types.

The authors develop a research database of fog index studies categorised based on contributions to disclosure obfuscation or disclosure utility, highlighting contributions to the stewardship, valuation and accountability roles of disclosures, which researchers can use to develop future studies.

This paper contributes to accounting literature by offering the first comprehensive review on the use of the fog index in accounting research. It offers researchers a consolidated review of the study of linguistic complexity of accounting information and disclosure functions using a theoretical framework that can inform regulators, policymakers and future researchers in designing future research/policy.

The purpose of this paper is to investigate the relationship between narrative disclosures and corporate performance based on Australian evidence. In particular it builds a model which discriminates between good and poor performing companies based on their corporate narratives.

A sample of Australian manufacturing companies is classified into two groups based on earnings per share (EPS) movement between 2008 and 2009. A content analysis of their discretionary narrative disclosures is used to classify and predict group membership.

This study finds that the word‐based variables based on discretionary disclosures are significantly correlated with corporate performance. Word‐based variables can successfully classify companies between “good” performers and “poor” performers with an accuracy of 86 percent.

The relatively small sample size, for Australian manufacturing companies, limits both the predictive ability of the model and its generalisability elsewhere.

The findings of the paper demonstrate that certain keywords, notably the use of “high/highest” and “dividends” are significantly and positively associated with superior performance.

The study builds a classification model for continuing Australian companies, whereas prior research focuses on UK and US companies and is based on a healthy/failed distinction.

This paper aims to develop a holistic measure for analysing impression management and for detecting bias introduced into corporate narratives as a result of impression management.

Prior research on the seven impression management methods in the literature is summarised. Four of the less‐researched methods are described in detail, and are illustrated with examples from UK annual results' press releases (ARPRs). A method of computing a holistic composite impression management score based on these four impression management methods is developed, based on both quantitative and qualitative data in corporate narrative disclosures. An impression management bias score is devised to capture the extent to which impression management introduces bias into corporate narratives. An example of the application of the composite impression management score and impression management bias score methodology is provided.

While not amounting to systematic evidence, the 21 illustrative examples suggest that impression management is pervasive in corporate financial communications using multiple impression management methods, such that positive information is exaggerated, while negative information is either ignored or is underplayed.

Four impression management methods are described in detail, illustrated by 21 examples. These four methods are examined together. New impression management methods are studied in this paper for the first time. This paper extends prior impression management measures in two ways. First, a composite impression management score based on four impression management techniques is articulated. Second, the composite impression management score methodology is extended to capture a measure for bias, in the form of an impression management bias score. This is the first time outside the USA that narrative disclosures in press releases have been studied.