The readability of chairman's statement, current earnings and earnings persistence: a case of Malaysian companies / Siti Nabilah Mohd Shaari, Nurfarizan Mazhani Mahmud and Suryani Abdul Raman

• Main Authors: Mohd Shaari, Siti Nabilah, Mahmud, Nurfarizan Mazhani, Abdul Raman, Suryani
• Format: Research Reports
• Language: English
• Published: 2011
• Subjects: Earnings management; Profits. Corporate profits
• Online Access: https://ir.uitm.edu.my/id/eprint/76666/1/76666.pdf; https://ir.uitm.edu.my/id/eprint/76666/

The study tries to find the relationship between readability of chairman's statements with current earnings and earnings persistence. This study examines the companies under Main Board of Bursa Malaysia, starting from 2004 until 2006. The testing of relationship between readability of chairman's statements and current earnings follows the prediction of obfuscation hypothesis (Courtis, 1998 and Li, 2008), where it predicts negative relationship between the company's current performance, and its annual report level of complexity. However, previous literatures, including Malaysian literature (Smith, Jamil, Johari and Ahmad, 2006; Abu Bakar and Ameer, 201 0; Courtis, 1995; and Smith and Taffler, 1992) find mixed results regarding the testing of obfuscation hypothesis. Therefore, this study attempts to test not only the readability of chairman's statements with current earnings but also future earnings performance.