Harmony between the information contained in the text and figures of Brazilian companies’ annual reports

Authors

  • Marcelo Sanches Pagliarussi Professor at the University of São Paulo - Ribeirão Preto
  • Thiago Neiva Guimarães Assistant Professor at Faculdades Unidas do Norte de Minas
  • Tiago Alves Ferreira

DOI:

https://doi.org/10.17524/repec.v9i1.1177

Keywords:

Annual Reports, Cognitive Dissonance, Content Analysis

Abstract

The purpose of this study is to analyze the harmony between information provided in the narrative sections of annual reports and the corporate financial performance. The sample consisted of 120 companies listed on BM&FBovespa (Brazilian Stock Exchange) in 2009 -- 60 with greater positive variation and 60 with greater negative variation in net accounting profit. Keywords relating to three central topics were selected: profitability, growth and management. Through content analysis, the meaning of these keywords in the reports was evaluated (quantitative positive, qualitative positive, quantitative negative and qualitative negative). Once the frequencies were obtained, two logistic regressions were performed to compare the text to the numbers, one on the raw frequency of words and another by a weighting of terms. The results indicate that, in the information linked to the topic of profitability, the text is harmonious with the numbers. In the information relating to growth, harmony is partial. In addition, when it comes to information linked to management, there is conflict between the narrative sections and corporate performance. Finally, it was found that, the more subjective the information, the greater the conflict.

Author Biographies

Marcelo Sanches Pagliarussi, Professor at the University of São Paulo - Ribeirão Preto

PhD. in Materials Science and Engineering from Universidade Federal de São Carlos

Thiago Neiva Guimarães, Assistant Professor at Faculdades Unidas do Norte de Minas

Master’s Degree in Accounting at Fucape Business School

Tiago Alves Ferreira

Master’s student in Accounting at Fucape Business School

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Published

2015-03-31

How to Cite

Pagliarussi, M. S., Guimarães, T. N., & Ferreira, T. A. (2015). Harmony between the information contained in the text and figures of Brazilian companies’ annual reports. Journal of Education and Research in Accounting (REPeC), 9(1). https://doi.org/10.17524/repec.v9i1.1177

Issue

Vol. 9 No. 1 (2015): January-March

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Articles

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