Accounting Information Systems


To satisfy legal requirements, listed companies are required to continuously publish a wide range of disclosures and reports.Regulatory authorities such as the SEC in the US or the FSA in the UK have developed a complex set of rules andregulations that aim at expanding transparency of capital markets. Therefore, corporations hire professional editorial teams,often being supported by financial service communication consultancies. While the regulatory objective is to increasetransparency, the management has an inherent motivation to give the reports a positive spin. We aim to explore this conflictby analyzing the sentiment of corporate disclosures and to compare this tone with the price reactions following thedisclosures’ publication. On the basis of an empirical analysis of intraday stock price reactions and word lists which providemeans to assess the tone of documents, our results provide evidence that corporates follow a strategy to positively adjust theirexternal reporting.