Purpose

This paper examines the effect of audit committee (AC) reporting, measured by the tone of audit committee disclosures, in improving financial reporting quality as proxied by earnings management.

Design/methodology/approach

The authors focus on the textual properties of AC reports, particularly the tone of AC disclosure, and their impact on financial reporting quality proxied using real and accruals-based earnings management. For additional analysis, the authors use a financial reporting index and matched sample. The analysis is based on a sample of UK FTSE 350 firms.

Findings

The analysis suggests that AC reports are not boilerplate but varied in language. The authors find AC reporting is negatively associated with both real and accruals-based earnings management. In our additional tests, the authors find a positive association between financial reporting quality index and reporting tone.

Research limitations/implications

Overall, this paper provides baseline evidence for future research and policy making and reveals that ACs reporting what they have done increases transparency and impacts on reporting quality.

Practical implications

Overall, this paper suggests that the tone of AC reports seems to convey information that affects the communication function of AC reporting and thereby helps to improve reporting quality.

Originality/value

Though the importance of AC disclosures in improving reporting quality is well recognised in policy guidelines and governance recommendations, no study has employed computer-based textual analysis of AC reports and investigated the effect of AC disclosure tone and the role it can play in achieving higher reporting quality.

中文翻译：

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审计委员会披露基调和盈余管理

目的

本文研究了审计委员会 (AC) 报告的影响，以审计委员会披露的语气来衡量，在提高盈余管理所代表的财务报告质量方面。

设计/方法/方法

作者专注于 AC 报告的文本属性，尤其是 AC 披露的基调，以及它们对使用基于实际和应计收益管理的财务报告质量的影响。为了进一步分析，作者使用了财务报告指数和匹配样本。该分析基于英国 FTSE 350 公司的样本。

发现

分析表明，AC 报告不是样板文件，而是语言不同。作者发现 AC 报告与实际盈余管理和应计盈余管理均呈负相关。在我们的额外测试中，作者发现财务报告质量指数和报告语气之间存在正相关。

研究限制/影响

总的来说，本文为未来的研究和政策制定提供了基线证据，并揭示了 AC 报告他们所做的事情会增加透明度并影响报告质量。

实际影响

总体而言，本文认为 AC 报告的语气似乎传达了影响 AC 报告沟通功能的信息，从而有助于提高报告质量。

原创性/价值

尽管 AC 披露在提高报告质量方面的重要性在政策指南和治理建议中得到了广泛认可，但没有研究对 AC 报告采用基于计算机的文本分析，并调查了 AC 披露语气的影响及其在实现更高报告质量方面可以发挥的作用质量。