Explore the evidence.
Understand the reach.

Stakeholders receive a comprehensive message that includes financial information, non-financial information, and a forecast for the future. Chairman’s disclosure is susceptible to manipulation by directors resulting to less transparency and thereby misleading the stakeholders. An evaluation of the chairman's messages in relation to financial performance is conducted in this study. The study examined the top 40 listed companies on the Johannesburg Stock Exchange for the year 2021, using the Gunning Fog Index as a measure of readability of the chairman's statement and Return on Equity (ROE) as a measure of financial performance. In order to determine the relationship between the chairman's statement readability and the company's financial performance, multiple linear regression was applied. This study found that as company performance increases, readability becomes more difficult. In contributing to existing literature, the study examines how the chairman's statement is correlated with financial performance from a South African viewpoint.

The aim of this study is to examine the effect of abnormal accruals on abnormal tone in the Chief Executive Officer (CEO) statements of South Africa’s (SA) top 40 Johannesburg Stock Exchange (JSE) listed businesses in the 2021 financial year.  This study employs the quantile regression analysis and the generalised linear regression model.  For this evaluation, the Top 40 JSE-listed firms' integrated annual reports (IARs), which include the annual financial statements and CEO statements, were extracted from the companies' official web pages.  Findings revealed that abnormal accruals have a negative relationship with the abnormal tone used in the CEO statements of the top 40 JSE-listed companies. i.e., anomalous accruals and irregular tone move in different directions, as abnormal accruals increase, the abnormal tone in CEO statements decreases.  This suggests that abnormal accruals and abnormal tone do not co-occur and that companies with abnormal accruals do not conceal them using abnormal tone in their CEO statements.  We recommend that the amount of flexibility and judgment given to preparers of annual financial statements be reduced to lessen the use of earnings management practices.  The research adds to the sparse literature on tone management and earnings management in developing nations, particularly SA.

The study aimed to design the auditing framework for the audit of the chairperson’s statement. The chairperson’s statement is one of the most read narrative disclosure statements in the integrated report. Non-financial information has become twice as important as financial information yet, it is not required by the International Financial Reporting Standard (IFRS). The chairperson’s statement is not audited and this leads to the use of impression management tactics. This study answers the call from different scholars who have called upon the audit of the chairperson’s statement to curve the use of impression management tactics. The mixed method is used for data analysis. Perception of external auditors is sought through the Likert scale and interviews to ensure triangulation. Descriptive statistics, correlation, and thematic analysis are used to analyze the data. The study found that auditors are aware of the existing concern about the use of impression management in the chairperson’s statement. In this regard, an audit of the chairperson’s statement is deemed appropriate and long overdue. External auditors are the most suitable experts to audit the chairperson’s statement and issue reasonable assurance. Secondly, auditors believe that the reliability of the chairperson’s statement is crucial and to ensure credibility, the company must have strong internal control, and report accurate and complete information in the chairperson’s statement. The auditing framework is designed and shown through an integrative conceptual model. The results are consistent with previous studies that emphasise the need for the assurance of non-financial information in the integrated report. This study triggers debates amongst accounting firms, standard setters, and policymakers on the adoption of the auditing framework for the chairperson’s statement to give assurance to the users. The study contributes to the body of knowledge with an auditing framework to audit the chairperson’s statement, the first of its kind. Lastly, the study adds to the developing debate on the assurance of narrative disclosure parts of the integrated report.

Despite anecdotal evidence indicating that a lack of management support towards internal audits (IAs) affects their efficacy, only a few studies have been conducted on the topic in a provincial government (PG) context. Besides, studies on the lack of management support towards IA efficacy lack theoretical grounding. This research aims to address this knowledge gap. The paper applied principal–agent theory to identify barriers to efficient management support towards the IA role within PGs, using the case of the Western Cape Government (WCG). Initially, questionnaires were sent to 260 WCG participants. The results revealed that management has a bad perception of IA as adding value to the organisation and does not take timely corrective actions based on audit findings and recommendations. The study adds to the limited knowledge about management and the IA relationship within PGs.

Despite anecdotal evidence indicating that a lack of management support towards internal audits (IAs) affects their efficacy, only a few studies have been conducted on the topic in a provincial government (PG) context. Besides, studies on the lack of management support towards IA efficacy lack theoretical grounding. This research aims to address this knowledge gap. The paper applied principal–agent theory to identify barriers to efficient management support towards the IA role within PGs, using the case of the Western Cape Government (WCG). Initially, questionnaires were sent to 260 WCG participants. The results revealed that management has a bad perception of IA as adding value to the organisation and does not take timely corrective actions based on audit findings and recommendations. The study adds to the limited knowledge about management and the IA relationship within PGs.

The study aimed to design the auditing framework for the audit of the chairperson’s statement. The chairperson’s statement is one of the most read narrative disclosure statements in the integrated report. Non-financial information has become twice as important as financial information yet, it is not required by the International Financial Reporting Standard (IFRS). The chairperson’s statement is not audited and this leads to the use of impression management tactics. This study answers the call from different scholars who have called upon the audit of the chairperson’s statement to curve the use of impression management tactics. The mixed method is used for data analysis. Perception of external auditors is sought through the Likert scale and interviews to ensure triangulation. Descriptive statistics, correlation, and thematic analysis are used to analyze the data. The study found that auditors are aware of the existing concern about the use of impression management in the chairperson’s statement. In this regard, an audit of the chairperson’s statement is deemed appropriate and long overdue. External auditors are the most suitable experts to audit the chairperson’s statement and issue reasonable assurance. Secondly, auditors believe that the reliability of the chairperson’s statement is crucial and to ensure credibility, the company must have strong internal control, and report accurate and complete information in the chairperson’s statement. The auditing framework is designed and shown through an integrative conceptual model. The results are consistent with previous studies that emphasise the need for the assurance of non-financial information in the integrated report. This study triggers debates amongst accounting firms, standard setters, and policymakers on the adoption of the auditing framework for the chairperson’s statement to give assurance to the users. The study contributes to the body of knowledge with an auditing framework to audit the chairperson’s statement, the first of its kind. Lastly, the study adds to the developing debate on the assurance of narrative disclosure parts of the integrated report.

Stakeholders receive a comprehensive message that includes financial information, non-financial information, and a forecast for the future. Chairman’s disclosure is susceptible to manipulation by directors resulting to less transparency and thereby misleading the stakeholders. An evaluation of the chairman's messages in relation to financial performance is conducted in this study. The study examined the top 40 listed companies on the Johannesburg Stock Exchange for the year 2021, using the Gunning Fog Index as a measure of readability of the chairman's statement and Return on Equity (ROE) as a measure of financial performance. In order to determine the relationship between the chairman's statement readability and the company's financial performance, multiple linear regression was applied. This study found that as company performance increases, readability becomes more difficult. In contributing to existing literature, the study examines how the chairman's statement is correlated with financial performance from a South African viewpoint.

The aim of this study is to examine the effect of abnormal accruals on abnormal tone in the Chief Executive Officer (CEO) statements of South Africa’s (SA) top 40 Johannesburg Stock Exchange (JSE) listed businesses in the 2021 financial year.  This study employs the quantile regression analysis and the generalised linear regression model.  For this evaluation, the Top 40 JSE-listed firms' integrated annual reports (IARs), which include the annual financial statements and CEO statements, were extracted from the companies' official web pages.  Findings revealed that abnormal accruals have a negative relationship with the abnormal tone used in the CEO statements of the top 40 JSE-listed companies. i.e., anomalous accruals and irregular tone move in different directions, as abnormal accruals increase, the abnormal tone in CEO statements decreases.  This suggests that abnormal accruals and abnormal tone do not co-occur and that companies with abnormal accruals do not conceal them using abnormal tone in their CEO statements.  We recommend that the amount of flexibility and judgment given to preparers of annual financial statements be reduced to lessen the use of earnings management practices.  The research adds to the sparse literature on tone management and earnings management in developing nations, particularly SA.