Thesis (Ph.D.) - Cairo University - Faculty of Commerce - Department of Accounting

This study attempts to explore whether management{u2019}s manipulation of firms{u2019} narrative disclosures tone (i.e. enhanced levels of abnormal disclosure tone) can help in detecting the existence of earnings management practices and in assessing firms{u2019} earnings quality. Specifically, it examines if there is an association between abnormal tone levels in corporate narrative disclosures and earnings management practices in the Egyptian firms. In addition, the study investigates if abnormal disclosure tone levelscan be related to earnings quality elements (earnings smoothness, persistenceandvalue-relevance/informativeness).The study uses a sample of earnings press releases of Egyptian firms listed in the Egyptian stock exchange index (EGX 100) over a five-year period (2014-2018). To measure disclosure tone in firms{u2019} earnings press releases, both manual and computerized textual analysis (DICTION 7) are employed, while using the financial-domain modified wordlist of Henry (2008).Abnormal disclosure tone levels are estimated using the model proposed by Huang et al. (2014). Earnings management is measured using discretionary accruals, which is estimated using the cross-section modified jones model (Dechow et al.,1995). In addition, three proxies are used to measure earnings quality (earnings smoothness, persistence and value-relevance/informativeness).Results reveal a significant positive association between manually-coded abnormal disclosure tone levels in Egyptian firms{u2019}earnings press releases and earnings management. However, this association is not found, when using computer-coded abnormal disclosure tone.Results show a partial evidence regarding the association between abnormal disclosure tone levels and earnings quality

Issued also as CD