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

Beattie, V., McInnes, W. and Fearnley, S. (2004) A methodology for analysing and evaluating narratives in annual reports: a comprehensive descriptive profile and metrics for disclosure quality attributes. Accounting Forum, 28(3), pp. 205-236. (doi: 10.1016/j.accfor.2004.07.001)

Abstract

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. In recent years, accounting researchers have increasingly focused their efforts on investigating disclosure and it is now recognised that there is an urgent need to develop disclosure metrics to facilitate research into voluntary disclosure and quality [Core, J. E. (2001). A review of the empirical disclosure literature. Journal of Accounting and Economics, 31(3), 441–456]. This paper responds to this call and contributes in two principal ways. First, the paper introduces to the academic literature a comprehensive four-dimensional 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.

• Item Type: Articles
• Additional Information: Final version as accepted by Accounting Forum supplied by the author
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Beattie, Prof Vivien
• Authors: Beattie, V., McInnes, W., and Fearnley, S.
• Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
• College/School: College of Social Sciences > Adam Smith Business School > Accounting and Finance
• Journal Name: Accounting Forum
• Publisher: Elsevier Ltd
• ISSN: 1467-6303
• Copyright Holders: Copyright © 2004 Elsevier Ltd
• First Published: First published in Accounting Forum 28(3):205-236
• Publisher Policy: Reproduced in accordance with the copyright policy of the publisher.