Linguistic signs within financial reports that forecast trouble for companies

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Journal ISSN
Volume Title
School of Business | Bachelor's thesis
Date
2020
Major/Subject
Mcode
Degree programme
Laskentatoimi
Language
en
Pages
25
Series
Abstract
The importance of financial information has grown in the recent years as the business environment and industries have become more complex. Simultaneously it has become more important for investors to be able to analyze thoroughly all parts of financial reports as a textual analysis can reveal something that the numeric key figures do not. Thus, it is useful to recognize key components and noteworthy signals also within the text parts of financial reports. The thesis is a literature review on the topic of linguistic attributes in financial reporting. It at first investigates how the textual information disclosure in financial reports is regulated and then proceeds to review the existing literature on three different signs of trouble within financial statement texts. The aim is to find answers to two research questions: which linguistic signs implicate problems, and what kind of financial problems can the signs be associated with. The results show correlation between textual characteristics such as text length and tone ambiguity, and financial problems like lower earnings and stricter loan terms.
Description
Thesis advisor
Kykkänen, Tapani
Keywords
financial report, linguistics, information disclosure, readability
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