A methodology for analysing and evaluating narratives in annual reports: a comprehensive descriptive profile and metrics for disclosure quality attributes

TLDR: A comprehensive four-dimensional framework for the holistic content analysis of accounting narratives and a computer assisted methodology for implementing this framework is presented in this paper. But, it does not address the problem of quality measurement.

About: This article is published in Accounting Forum.The article was published on 2004-09-01 and is currently open access. It has received 963 citations till now. The article focuses on the topics: Voluntary disclosure & Business reporting.

Figures

Figure 3: Illustration of Sentence Splits to Create Text Units

Table 6: Composite Quality Index and Individual Component Scores

Figure 4: Extract from Coding Instrument

Table 5: Pearson Correlations between Proxies for Amount and Spread Dimensions of Disclosure Quality

Table 1: Distribution of Cadbury Schweppes Text Units across Main Topics

Table 3: Distribution of Cadbury Schweppes Text Units by Type

Frequently asked questions

Q1. What have the authors contributed in "A methodology for analysing and evaluating narratives in annual reports: a comprehensive descriptive profile and metrics for disclosure quality attributes" ?

There is a consensus that the business reporting model needs to expand to serve the changing information needs of the market and provide the information required for enhanced corporate transparency and accountability. Worldwide, regulators view narrative disclosures as the key to achieving the desired step-change in the quality of corporate reporting. This paper responds to this call and contributes in two principal ways. First, the paper introduces to the academic literature a comprehensive fourdimensional framework for the holistic content analysis of accounting narratives and presents a computer-assisted methodology for implementing this framework. This procedure provides a rich descriptive profile of a company ’ s narrative disclosures based on the coding of topic and three type attributes. Second, the paper explores the complex concept of quality, and the problematic nature of quality measurement. It makes a preliminary attempt to identify some of the attributes of quality ( such as relative amount of disclosure and topic spread ), suggests observable proxies for these and offers a tentative summary measure of disclosure quality. 

Q2. What are the future works in "A methodology for analysing and evaluating narratives in annual reports: a comprehensive descriptive profile and metrics for disclosure quality attributes" ?

The importance of public voluntary disclosures made by listed companies is expected to increase in the future. 22 Voluntary disclosures are important to companies, to their stakeholders/information intermediaries and to researchers as a means of advancing their understanding of major issues ( such as the link between enhanced disclosure and the functioning of the capital market ). Further research that builds on and extends the ideas presented in this paper is essential. The emphasis given to particular topic categories can be readily calculated.