Does financial crisis affect financial reporting of good news and bad news? Online publication date: Sat, 27-Dec-2014
by Mohammad Said Ressas; Khaled Hussainey
International Journal of Accounting, Auditing and Performance Evaluation (IJAAPE), Vol. 10, No. 4, 2014
Abstract: The objective of this paper is to examine the impact of financial crisis on financial reporting of good news and bad news in the UK annual report narrative sections. We use the manual content analysis to measure levels of good news and bad news information for a sample of 110 chairman statements of financial institutions. Our sample covers a five year period (2006-2010), which represents the global financial crisis year (2008), two years before the crisis and two years after the crisis. Our regression analysis shows that UK financial companies disclose more good news information than bad news information. We also find that the crisis affects the financial reporting of good news and bad news. These results suggest that after controlling for other firm characteristics and corporate governance mechanisms, UK financial companies disclose more bad news information during and after the crisis period, while they disclose less good news during these periods.
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