The perceived credibility of forward-looking performance disclosures
By Vasiliki Athanasakou, K. Hussainey. 2014
111 citations recorded by the source corpus.
We investigate the credibility of forward-looking performance disclosures (FLPDs) in the narrative sections of annual reports, as perceived by investors. Our proxy for these disclosures is an index of statements about future performance. We find that companies issue more FLPDs when raising debt or conveying bad news in the financial statements. In the presence of these managerial incentives, investor reliance on FLPDs increases with the quality of earnings reported in the audited financial statements. Our results suggest that firms derive a benefit in terms of higher credibility for their narrative disclosures from having a reputation for high quality earnings.
Subfields: Accounting, Finance
View Paper: https://www.semanticscholar.org/paper/53d0f44d3c71156f09909d4f62beae7f0bbf9f97
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In Accounting
- Ahmed Hassanein
- K. Hussainey
- Khaleed Omair Alotaibi
- Collins G. Ntim
- Ahmed A. Elamer
- Hussein A. Abdou
In Finance
Citations in the corpus
- Is forward-looking financial disclosure really informative? Evidence from UK narrative statements (2015, background): “Likewise, Athanasakou and Hussainey (2014) argue that managers use future-oriented information when they have incentives to provide untruthful disclosure and mislead investors.”
- Are CSR disclosures relevant for investors? Empirical evidence from Germany (2016, unknown): “Recent literature (e.g. Athanasakou and Hussainey, 2014; Campbell et al. , 2014; Muslu et al. , 2014) has started to investigate the information content of narrative disclosures in the annual report.”