Optimistic tone of MD&A and the relationship with reduced sales revenues in times of crisis
In times of crisis, companies may want to maintain their attractiveness by inducing users of accounting information through the tone of their financial reports. In this context, the study verified whether non-financial companies in the United States adopt an optimistic tone in their Management'...
| Autores: | , |
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| Tipo de recurso: | artículo |
| Estado: | Versión publicada |
| Fecha de publicación: | 2024 |
| País: | Brasil |
| Institución: | Universidade Federal de Santa Catarina (UFSC) |
| Repositorio: | Revista Contemporânea de Contabilidade (Online) |
| Idioma: | inglés portugués |
| OAI Identifier: | oai:periodicos.ufsc.br:article/100257 |
| Acceso en línea: | https://periodicos.ufsc.br/index.php/contabilidade/article/view/100257 |
| Access Level: | acceso abierto |
| Palabra clave: | MD&A Otimismo Análise de texto Crises Optimism Text analysis Optimismo Análisis de texto Crisis |
| Sumario: | In times of crisis, companies may want to maintain their attractiveness by inducing users of accounting information through the tone of their financial reports. In this context, the study verified whether non-financial companies in the United States adopt an optimistic tone in their Management's Discussion and Analysis (MD&A) when they face reduced sales revenue in years of crisis. Considering a period from 2005 to 2022, the results of the diff in diffs regression with panel data indicated that in times of crisis, companies with reduced revenue tend to adopt an optimistic tone in their MD&A, suggesting that this tone may be a strategic response to revenue declines. This result is corroborated when considering two different samples: for medium-sized companies in the United States and Brazil. The research highlights the importance of analysts and investors monitoring financial data, in addition to MD&A analyses, especially in times of crisis, in order to reduce uncertainty in investment decisions. Furthermore, the discussion among regulators regarding the need for regulations that promote improvements in MD&A is ratified, as well as the need to control periods of crisis in determining the tone of financial reports released by companies. |
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