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Reporting practice, impression management and company performance : a longitudinal and comparative analysis of water leakage disclosure.

Cooper, S. and Slack, R. (2015) 'Reporting practice, impression management and company performance : a longitudinal and comparative analysis of water leakage disclosure.', Accounting and business research., 45 (6-7). pp. 801-840.

Abstract

This paper aims to determine whether corporate reporting practice, consistent with impression management, changes depending upon company performance. A longitudinal analysis, rarely used in prior impression management research, enables changes in annual report disclosures, both narrative and visual, to be identified and considered relative to a company's performance. Our analysis is based upon the disclosure of leakage performance, a strategic and stakeholder issue in the water industry, by all 10 water and sewerage companies (WASCs) in England and Wales over the 7-year period 2005–2006 to 2011–2012. Our longitudinal data are also compared across companies and contrasted with the expert counter account provided by the industry regulator, OFWAT. We find that the level, nature and presentation of a WASC's leakage disclosures change markedly reflective of their performance against OFWAT's target. Our evidence shows that the changes in reporting practice include the use of tactics and presentational methods consistent with impression management, raising concerns regarding the balance and trustworthiness of voluntary disclosures in the annual report. We suggest that the International Accounting Standards Board should further consider their guidance on narrative disclosures, including presentational format, to reduce the scope for impression management within corporate reporting.

Item Type:Article
Keywords:Reporting, Impression management, Performance, Leakage, Targets, Disclosure.
Full text:(AM) Accepted Manuscript
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Status:Peer-reviewed
Publisher Web site:http://dx.doi.org/10.1080/00014788.2015.1081554
Publisher statement:This is an Accepted Manuscript of an article published by Taylor & Francis Group in Accounting and Business Research on 11/11/2015, available online at: http://www.tandfonline.com/10.1080/00014788.2015.1081554.
Record Created:18 Nov 2015 09:20
Last Modified:14 May 2017 00:49

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