Rutherford, B.A. (2003) Obfuscation, Textual Complexity and the Role of Regulated Narrative Accounting Disclosure in Corporate Governance. Journal of Management and Governance, 7 (2). pp. 187-210. ISSN 1385-3457.
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This paper examines whether poorly performingcompanies use textual complexity to obfuscatein the Operating and Financial Review (OFR) andthus undermine effective communication and goodgovernance. Prior research on the obfuscationhypothesis has reached confused andcontradictory conclusions. The OFR is a usefulobject for testing the hypothesis because itssemi-regulated status provides a measure ofcommonality of content while leaving scope forvariability in textual complexity. This studyexamines whole texts, employs a larger numberof variables and proxy measures than previousstudies, and uses regression analysis, toovercome some of the possible causes ofinconsistency in previous results. It concludesthat poorly performing companies do notobfuscate by the use of textual complexity.OFRs are nonetheless textually complex and byno means all this complexity can be attributedto the complexity of the underlying activitiesto be described. The consequences of thisfinding for regulators and researchers arebriefly examined. The weakness of the evidencefor the hypothesised obfuscation by textualcomplexity shifts attention to other forms ofobfuscation and some suggestions for futureresearch are made.
|Uncontrolled keywords:||accounting narratives, impression management, obfuscation hypothesis, Operating and Financial Review, textual complexity|
|Subjects:||H Social Sciences > HF Commerce > HF5601 Accounting|
|Divisions:||Faculties > Social Sciences > Kent Business School > Accounting and Finance|
|Depositing User:||Brian A Rutherford|
|Date Deposited:||04 Sep 2008 08:57|
|Last Modified:||14 Jan 2010 14:19|
|Resource URI:||http://kar.kent.ac.uk/id/eprint/5167 (The current URI for this page, for reference purposes)|
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