BUS 421 Lecture Notes - Lecture 2: Global Reporting Initiative, Gas Explosion, Tonne
16 Dec 2017
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Document Summary
There is pressure to prepare csr docs to inform s/h about firms" voluntary activities undertaken to operate in an economically, social, environmentally sustainable manner. Occurs when using complex syntax to impress readers and/or hide poor firm performance. There are some studies that show that firms that provide more disclosure are in fact csr underperformers used as a mechanism to manage s/h impressions, could indicate greenwashing. Readability indices can possibly advance disclosure research by examining specific characteristics, to measure obfuscation in csr disclosures. Researchers in acc/fin are increasingly using readability indices to examine relationship btwn language & other variables (e. g. invest efficiency, analyst forecasts) Views of acc research are based on different assumptions abt why corps voluntarily disclose info to public leads to different understandings of incentives for providing disclosure: voluntary disclosures are value-relevant. Focus on econ value relevance of voluntary disclosure to assess relationship btwn fin performance & disclosure. Incomplete revelation hypothesis (irh) is an alternate to emh, where markets.
