Management Review

Management Review ›› 2025, Vol. 37 ›› Issue (5): 206-220.

• Accounting and Financial Management • Previous Articles    

Media Reports and Tone Manipulation of Annual Reports: A Reexamination of the Role of Media Governance

Lv Kefu1, Yu Mingyang2, Liu Chen3, Ruan Yongping4   

  1. 1. College of Economics and Management, China Agricultural University, Beijing 100083;
    2. School of Management, Minzu University of China, Beijing 100081;
    3. School of Accounting, Shanghai Lixin University of Accounting and Finance, Shanghai 201620;
    4. School of Business, East China University of Science and Technology, Shanghai 200237
  • Received:2022-06-14 Published:2025-06-18

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Abstract: The dissimilation effect of media in corporate governance is gradually recognized by academia:the sensational effect of media reports can form market pressure on the reported companies. Based on the data of A-share listed companies from 2007 to 2020, this paper discusses the impact of media reports on the tone manipulation of annual reports text of listed companies. The findings show that media reports increase the tone manipulation of the annual reports text. From a temporal perspective, tone manipulation involves both historical information and forward-looking information. From a content perspective, tone manipulation primarily concerns information related to performance, operations, investments, financing, accounting and regulatory matters. Moreover, this paper also finds that under the pressure of media reports, the management's tone manipulation of the annual report text can improve investor impression, mobilize investor sentiment and increase analyst optimism, which can realize the management' s impression management motivation to a certain extent. The moderating effect shows that the more motivated a listed company's management is to manage impression, the greater influence media reports have on the tone manipulation of the annual report text, especially when more attention is paid by the market participants and the listed company has a merger or refinancing plan in the year. The extended texts find that under the pressure of media coverage, management also increases the manipulation of digital information. Moreover, there is a complementary effect between the two manipulations. The the more severely digital information is manipulated, the more obviously annual report text is tone-manipulated. Finally, through the economic consequences test, we find that when the pressure of media attention is greater, the tone manipulation behavior of the management's annual report text will significantly increase the level of mispricing of the company's assets, which seriously endangers the orderly and benign development of the capital market.

Key words: media reports, text tone manipulation, impression management, asset mispricing