Economic-financial performance versus emotional content of the management report: a persuasion strategy

Abstract

The emotion is present in all human actions, both in the psychic and sensory levels, being, therefore, essential for the decision-making model (FERREIRA, 2008); that economic-financial performance is fundamental for the survival of companies and that it influences the quality of management discourse in disclosure (BUSE; ŞTEFAN, 2014; LI, 2008) and that companies have an emotional profile (BUECHEL; HAHN e WALGENBACH, 2016) and tend to manage the impression of readers with specific language, especially in the face of poor performance (CLATWORTHY; JONES, 2003), the present study aims to verify what effects the economic-financial performance produces on the emotional content of the Management Report. Therefore, using companies listed on the BMF & FBOVESPA, basic emotions were initially quantified (EKMAN; SORENSON e FRIESEN, 1969) Joy, Fear, Anger, Disgust, Surprise and Sadness present in the Management Reports, collected from B3, through the Dictionary of Emotion Terms in Accounting and Finance (KOS; SCARPIN E PINTO, 2019). Then, linear regression with panel data was computed, where each of the emotions represented the dependent
variable, whose explanatory variable was the economic-financial performance, represented
by Profitability, Profitability, Liquidity and Indebtedness, coletados na base de dados Bloomberg. The
results show that economic and financial performance significantly influences the emotional content
in the Management Report, demonstrating that corporate financial texts display more terms of Fear,
Disgust, and Sadness as performance worsens. On the other hand, the findings indicate that better
performing companies tend to insert more Joy terms in financial texts. Thus, it is clear that accounting
narratives, although based on principles and standards, are not neutral.