Equity Incentives, Audit Opinions, and Annual Report’s tone: An Analysis Based on Text Information

Peiya Hu (), Xiaoqian Huang () and Yiwen Xiang ()
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Peiya Hu: China Three Gorges University, College of Science and Technology
Xiaoqian Huang: China Three Gorges University, College of Science and Technology
Yiwen Xiang: China Three Gorges University, College of Science and Technology

A chapter in Proceedings of the 2023 3rd International Conference on Financial Management and Economic Transition (FMET 2023), 2024, pp 303-316 from Springer

Abstract: Abstract This paper takes the listed companies in 2011-2021 as the initial sample to study the impact of equity incentive on the annual report’s tone, and uses the management expense rate and audit opinion as moderating variables to study the role of equity incentive in the annual report’s tone. Research has found that when companies implement a certain degree of equity incentives, the tone of their annual reports is more positive. Further research has found that the effect of equity incentives on the tone of annual reports is influenced by the management expense ratio and audit opinions. Combining the implementation of equity incentives for executives with the annual report information of the company helps to deeply explore the macro overview of the company's corporate behavior under the implementation of incentives for executives on its current and future development, providing a new perspective for understanding the decision-making and planning of listed companies.

Keywords: Equity Incentives; Annual Report’s Tone; Audit Opinions (search for similar items in EconPapers)
Date: 2024
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DOI: 10.2991/978-94-6463-272-9_34

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