Financial disclosure manipulation is unethical and unlawful because it leads to less transparent reporting and harmful economic decisions based on misleading information. The…
Abstract
Purpose
Financial disclosure manipulation is unethical and unlawful because it leads to less transparent reporting and harmful economic decisions based on misleading information. The purpose of this paper is to provide a summary and synthesis of research covering financial disclosure misrepresentation via impression management (IM). Ultimately, this report proposes that virtuous managers may be well-suited to provide transparent, objective disclosure. By extension, virtuous managers may oversee profitable firms and improve capital market efficiency. Suggestions for future research are presented.
Design/methodology/approach
This is an academic literature review covering financial disclosure manipulation. The findings are viewed through the lens of Christian virtue ethics (CVE).
Findings
IM studies commonly focus on specific methods used to mislead disclosure readers. Antecedent and mitigation strategies are less commonly noted in the research. This paper presents and analyzes IM tools and antecedents. Mitigation approaches are considered through the lens of CVE. This report proposes that virtuous managers may be well-suited to provide transparent, objective disclosure. By extension, virtuous managers may oversee profitable firms and improve capital market efficiency.
Originality/value
This present study focuses on the antecedents of IM in financial disclosures and introduces a novel perspective to financial disclosure mitigation – CVE. Financial disclosure authors and readers, researchers, financial regulators and accounting standards setters may be interested in the findings presented in this study.
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The purpose of this paper is to provide a summary and synthesis of US Securities and Exchange Commission accounting and auditing enforcement release (AAER)-based research on…
Abstract
Purpose
The purpose of this paper is to provide a summary and synthesis of US Securities and Exchange Commission accounting and auditing enforcement release (AAER)-based research on financial misreporting firms and the firms’ management. Christian virtue ethics (CVE) is used as a framework for this review. Suggestions for future research are presented.
Design/methodology/approach
This is a review of the academic literature covering AAERs. The findings are viewed through the lens of CVE.
Findings
Several financial misconduct studies use samples developed from AAER targets. These studies commonly focus on specific characteristics of AAER targets. This paper presents and analyzes characteristics of AAER targets and considers how CVE may mitigate fraudulent reporting.
Research limitations/implications
The main limitation of the research is that the literature review is confined to studies of financial fraud that use an AAER-based sample. Nevertheless, the sample is sufficient to provide insight into the common characteristics of AAER target firms and related entities. The benefits of CVE are considered. This study has relevant implications for investors, regulators and researchers concerned with financial reporting quality, fraud, regulatory oversight and business ethics.
Originality/value
This paper provides a set of AAER target features and considers how CVE may mitigate financial fraud. Financial regulators, accounting standards setters and researchers may be interested in the findings presented in this study.
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The paper examines the difference in the disclosure readability of SEC investigated firms and the population of firms traded in the USA. This study aims to further refine the…
Abstract
Purpose
The paper examines the difference in the disclosure readability of SEC investigated firms and the population of firms traded in the USA. This study aims to further refine the obfuscation hypothesis and broader impression management theory.
Design/methodology/approach
The paper used quantitative cross-sectional analysis of archival data gathered from the SEC Accounting and Auditing Enforcement Release Archive and the SEC EDGAR database. A one-sample t-test was used to compare mean readability levels.
Findings
The paper provides empirical evidence to support the assertion that disclosures of the firms being investigated for “books-and-records” infractions are more difficult to read than the disclosure of the average publicly-traded firm in the USA.
Research limitations/implications
First, the study did not make direct matched-pairs comparisons of the readability level. Second, the unique nature of the sample means that the results may not be generalizable. Further research is necessary to expand on this current work.
Practical implications
The paper includes implications for consideration by accounting standards setters, financial regulators and annual report readers.
Originality/value
This paper addresses an identified need to study the existence and degree of complexity and obfuscation in financial disclosures.
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Stephanie Al Otaiba, Jeanine Clancy-Menchetti and Christopher Schatschneider
More than ever before, researchers and policymakers expect general education classroom to be the first line of defense in efforts to prevent reading difficulties. Preventing…
Abstract
More than ever before, researchers and policymakers expect general education classroom to be the first line of defense in efforts to prevent reading difficulties. Preventing reading difficulties through evidence-based beginning reading instruction research features prominently in the 2002 No Child Left Behind legislation (NCLB; P. L. 107-110) and in the 2004 amendments to the Individuals with Disabilities Act (IDEA). The purpose of this chapter is to describe the experimental and quasi-experimental methodological approaches that have been used to examine the effects of professional development in reading on teachers’ instructional practices and students’ reading outcomes and to evaluate the chain of causal linkage in the more recent studies. The first section of the chapter provides a brief history of relevant research. The second section summarizes findings of the National Reading Panel (NRP, 2000) Report and those of a recent review of the literature (Clancy-Menchetti & Al Otaiba, 2006). The final section synthesizes what we have learned from the research.