AAA Spark Meeting of the Regions

Management’s Hopeful Tone and Financial Reporting Quality

• In Event: Managerial Influence on Reporting Quality

Abstract

This study utilizes machine learning approach to capture managerial hopeful tone using earnings call transcripts of the US public traded companies. This paper argues hope as a specific element of management’s psychology and investigates the impact of managerial hopeful tone on financial reporting quality (FRQ). Based on the evidence presented in both the psychology (positive psychology) and the accounting (management’s characteristics) literatures, this study argues that hopeful managers adopt better financial reporting practices and make more effective decisions. Thus, the study hypothesizes that management’s hopeful tone is positively associated with FRQ.

Author

• Iyad Rock, University of Wisconsin–Whitewater