A Manifestation of Impression Management in Corporate Reporting in Jse Top 40 Listed Companies

Abstract

Purpose: The purpose of the study is to exposes impression management in the developing country, with a specific focus on the Top 40 Johannesburg Stock Exchange (JSE). Despite not being required by the International Financial Reporting Standards, the Chairperson's statement is the most read statement among the more than 80% of listed companies. The study investigated profitable and unprofitable companies' use of impression management through passive voice and personal references.
 Methodology: Secondary data in form of annual reports were used and self-attribution theory was used as framework. Mixed content analysis was used. Using a targeted sample, the study differentiated between 20 profitable and 20 unprofitable companies, based on the change in pre-tax profit between fiscal 2019 and fiscal 2020.
 Findings: Profitable and unprofitable companies used self-attribution bias. The Mann-Whitney test finds no significant difference despite profitable organizations’ using more self-attribution than unprofitable companies. The continued use of impression management deceives investors and impairs their ability to make informed decisions
 Implications: The study sends a strong warning to potential investors on use of impression management by listed companies. Further, the study further adds to the debate on impression management through self-attribution in corporate reporting.