scholarly journals The effect of boilerplate language on nonprofessional investors’ judgments

2021 ◽  
pp. 1-26
Author(s):  
Ozlem Arikan
Keyword(s):  
Nonprofessional Investors

The Impact of Strategic Relevance and Assurance of Sustainability Indicators on Investors' Decisions

2014 ◽  
Vol 34 (1) ◽  
pp. 131-162 ◽  
Author(s):  
Mandy M. Cheng ◽  
Wendy J. Green ◽  
John Chi Wa Ko
Keyword(s):  
Strategic Alignment ◽  
Investment Decisions ◽  
Company Strategy ◽  
Cost Leadership ◽  
Nonprofessional Investors ◽  
Differentiation Strategy ◽  
Leadership Strategy ◽  
Strategy Versus ◽  
The Impact ◽  
Cost Leadership Strategy

SUMMARY In this study, we report two 2 × 2 between-subjects experiments that investigate the effect of strategic relevance of reported sustainability information and its assurance on nonprofessional investors' investment decisions. The first experiment manipulates strategic relevance of reported environmental, social, and governance (ESG) indicators between “high” and “low” by varying the company strategy (sustainability-based differentiation strategy versus cost leadership strategy unrelated to sustainability). The second experiment manipulates the strategic alignment of the ESG indicators (holding strategy constant). We also manipulate the presence (absence) of assurance in both experiments. Results from both experiments document that investors perceive ESG indicators to be more important, and are more willing to invest in the company if ESG indicators have higher strategic relevance. Experiment one also provides evidence that assurance increases investors' willingness to invest to a greater extent when ESG indicators have high relevance to the company strategy. Our findings suggest that the assurance of ESG indicators has a beneficial signaling role in communicating the importance of this reported information to investors.

Using CSR Disclosure Quality to Develop Social Resilience to Exogenous Shocks: A Test of Investor Perceptions

2015 ◽  
Vol 27 (2) ◽  
pp. 155-177 ◽  
Author(s):  
Kimberly A. Zahller ◽  
Vicky Arnold ◽  
Robin W. Roberts
Keyword(s):  
Strong Support ◽  
Management Control ◽  
Path Model ◽  
Organizational Legitimacy ◽  
Social Resilience ◽  
Exogenous Shock ◽  
Nonprofessional Investors ◽  
Exogenous Shocks ◽  
Csr Disclosure ◽  
Corporate Social

ABSTRACT Our overarching purpose is to propose and test a theory of social resilience to exogenous shocks. The theory posits that high-quality corporate social responsibility (CSR) disclosure promotes the perception of organizational legitimacy, creating social resilience to exogenous shocks (external events outside management control). Using a path model and data from 100 experienced, nonprofessional investors, we examine whether the quality of a corporation's voluntary CSR disclosure increases its perceived organizational legitimacy and if increases in perceived legitimacy help insulate that organization from negative investor reactions following an exogenous shock. The results provide strong support for the model and show that when CSR disclosures are higher quality, investors perceive organizational legitimacy to be higher, inferring that organizations should emphasize quantifiable, consistent, and comparable reporting. Further, the results indicate that higher levels of perceived organizational legitimacy are associated with greater levels of organizational resilience to an intra-industry exogenous shock.

Is an Emoji Worth a Thousand Words? The Effect of Emoji Usage on Nonprofessional Investors’ Perceptions

2021 ◽  
Author(s):  
Hilda E. Carrillo ◽  
Robin Pennington ◽  
Yibo (James) Zhang
Keyword(s):  
Social Psychology ◽  
Decision Making ◽  
Data Collection ◽  
Positive Emotions ◽  
Research Community ◽  
Unintended Consequences ◽  
Bad News ◽  
Good News ◽  
Verbal Cues ◽  
Nonprofessional Investors

Emojis act as non-verbal cues to disambiguate and communicate affect and are increasingly used in online corporate disclosures. Emotion work, a concept founded in social psychology, suggests that individuals adjust their behavior as emotions are evoked or suppressed. Despite the growing evidence that emojis may influence judgments and decisions due to their deliberate expression of context and affect, the accounting research community has yet to investigate emojis’ impact. We experimentally explore whether emojis can soften nonprofessional investors’ perceptions of bad news or enhance perceptions of good news. We find that emojis modestly suppress participants’ positive emotions on positive news, influencing their investment-related judgments and decision-making. Subsequent data collection fails to replicate the initial findings in a less experienced participant pool, suggesting that investing experience may play a role. Our study enhances our understanding of the unintended consequences of emojis and introduces a sociology-based principle into the accounting literature.

How Disclosing a Prior Cyberattack Influences the Efficacy of Cybersecurity Risk Management Reporting and Independent Assurance

2019 ◽  
Vol 33 (3) ◽  
pp. 183-200 ◽  
Author(s):  
Michele L. Frank ◽  
Jonathan H. Grenier ◽  
Jonathan S. Pyzoha
Keyword(s):  
Risk Management ◽  
Voluntary Disclosure ◽  
Data Availability ◽  
Third Party ◽  
Nonprofessional Investors ◽  
Reporting Framework ◽  
Reliability Enhancement ◽  
Management Reporting ◽  
A Company

ABSTRACT This paper provides evidence that the efficacy of voluntary cybersecurity risk management reporting and independent assurance, in terms of enhancing investment attractiveness, depends on whether a company has disclosed a prior cyberattack. Based on the voluntary disclosure literature, we predict and find that issuing the management component of the AICPA's cybersecurity reporting framework absent assurance is more effective when a company has not (versus has) disclosed a prior cyberattack, as nonprofessional investors are less likely to question the reliability of management's reporting. However, obtaining third party assurance of management's report provides a greater benefit for companies that have (versus have not) disclosed a prior cyberattack, as these companies benefit more from the reliability enhancement of assurance. Finally, we find it may be possible to enhance a company's investment attractiveness by issuing the independent assurance report by itself. Our results have implications for companies' cybersecurity risk management reporting and assurance decisions. Data Availability: Data are available upon request.

Presentational format and financial consumers’ behaviour: an eye-tracking study

2019 ◽  
Vol 37 (3) ◽  
pp. 821-837 ◽  
Author(s):  
Maria Gabriella Ceravolo ◽  
Vincenzo Farina ◽  
Lucrezia Fattobene ◽  
Lucia Leonelli ◽  
GianMario Raggetti
Keyword(s):  
Information Processing ◽  
Eye Tracking ◽  
Neural Mechanisms ◽  
Financial Disclosure ◽  
Sources Of Information ◽  
Cross Sectional ◽  
Content Type ◽  
Nonprofessional Investors ◽  
Cross Sectional Design ◽  
Practical Implications

Purpose The purpose of this paper is to examine whether financial consumers are sensitive to presentational format of financial disclosure documents and whether this influences the financial attractiveness of products. Design/methodology/approach In order to observe and measure consumers’ attention, the authors exploit the unobtrusive methodology of eye tracking on a sample of nonprofessional investors, applying an ecological protocol, through a cross-sectional design. Findings The analysis reveals that financial information processing and attention distribution are influenced by the way the information is conveyed. Moreover, some layouts induce individuals to rate the products as less financially attractive, independent of the information content. This suggests the importance of studying the neural mechanisms of investors’ behaviour in the scrutiny of financial product documents. Practical implications The results lead to recommend regulators and managers to study how investors respond to financial disclosure documents by exploiting neuroscientific techniques. Moreover, there is a role for the search of any benefit coming from emphasising specific sources of information inside documents. Originality/value This research investigates the influence of presentational format on consumers’ information processing measuring the underlying neurophysiological processes; the consequent perception of financial attractiveness is also explored.

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