The discussion about the relationship between tone at the top and financial reporting practices has been primarily focused on the oversight role played by the board of directors and other structural elements of corporate governance. Another relevant determinant of tone at the top is the corporate narrative language, since it is a fundamental way in which the chief executive officer (CEO) enacts leadership. In this study, we empirically explore the association between financial reporting aggressiveness and five thematic indicators capturing different traits of ethical leadership from 535 annual letters to shareholders. We find that aggressive financial reporting is positively associated with CEO letters using a language which is resolute, complex, and not engaging. Our empirical findings highlight the importance of examining discretionary corporate narratives for the auditing process and the role of tone at the top in influencing accounting practices.

Patelli, L., Pedrini, M., Is Tone at the Top Associated with Financial Reporting Aggressiveness?, <<JOURNAL OF BUSINESS ETHICS>>, 2015; (126(1)): 3-19. [doi:10.1007/s10551-013-1994-6] [http://hdl.handle.net/10807/84252]

Is Tone at the Top Associated with Financial Reporting Aggressiveness?

Pedrini, Matteo
Secondo
2015

Abstract

The discussion about the relationship between tone at the top and financial reporting practices has been primarily focused on the oversight role played by the board of directors and other structural elements of corporate governance. Another relevant determinant of tone at the top is the corporate narrative language, since it is a fundamental way in which the chief executive officer (CEO) enacts leadership. In this study, we empirically explore the association between financial reporting aggressiveness and five thematic indicators capturing different traits of ethical leadership from 535 annual letters to shareholders. We find that aggressive financial reporting is positively associated with CEO letters using a language which is resolute, complex, and not engaging. Our empirical findings highlight the importance of examining discretionary corporate narratives for the auditing process and the role of tone at the top in influencing accounting practices.
Inglese
Patelli, L., Pedrini, M., Is Tone at the Top Associated with Financial Reporting Aggressiveness?, <>, 2015; (126(1)): 3-19. [doi:10.1007/s10551-013-1994-6] [http://hdl.handle.net/10807/84252]
File in questo prodotto:
Non ci sono file associati a questo prodotto.

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/10807/84252
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 58
  • ???jsp.display-item.citation.isi??? 51
social impact