Are User Perceptions of Chairman Addresses Managed through Syntactical Complexity and Rationalisation?

Leopold Bayerlein and Paul Davidson

Australian Accounting Review, 2015, vol. 25, issue 2, 192-203

Abstract: type="main">

This study assesses whether or not the preparers of chairman addresses of large listed Australian firms manage user perceptions through the syntactical complexity of the provided information and/or the rationalisation of unwanted information. It applies an innovative assessment approach for the rationalisation of unwanted information. The study analyses the chairman addresses of 87 firms included in the Standard & Poor's ASX200 index using the Flesch readability formula, as well as the relative occurrence frequency of sentences with particular connotations within each analysed report. The findings of this study demonstrate that although the comprehension difficulty of chairman addresses is generally high, preparers do not attempt to manage user perceptions through syntactical complexity or rationalisation. Specifically, the study finds no evidence that chairman addresses that contain predominantly negative news are more difficult to comprehend than chairman addresses that contain predominantly positive news. Furthermore, it is concluded that preparers do not use rationalisations to manage user perceptions. Prior literature has thus far failed to investigate the rationalisation of information as a potential perception management tool and no other recent contribution to the literature has investigated the syntactical complexity of Australian chairman addresses that contain predominantly positive or negative news. This study aims to fill that gap.

Date: 2015
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