Walter Aerts

Walter Aerts
University of Antwerp | UA · Accounting and finance

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70
Publications
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Introduction
Skills and Expertise

Publications

Publications (70)
Article
An initial coin offering (ICO) has become a popular venue for crowdfunding at an early stage in a blockchain project. In the ICO process, a whitepaper may serve as an effective marketing tool to influence investor perception and investor trading behaviour. In this paper, we investigate whether management sentiment, as captured by the disclosure ton...
Article
Research on value relevance of reported selling, general and administrative expenses (SG&A) generally employs historical SG&A as reference point for assessment. This practice tends to ignore the interpretational ambiguity that surrounds the economics of SG&A expenditure and what it means for future profitability and firm value. Organizational theor...
Article
This study investigates whether firms engage in peer-based benchmarking in their decision-making regarding selling, general and administrative expenses (SG&A) for a large sample of U.S. listed firms. Peer-based comparison relates to comparing own performance against the performance of a meaningful reference group of other firms. SG&A are to a large...
Article
Policy uncertainty created by regulatory authorities regarding the blockchain matters for the initial coin offering (ICO) market. Using an ICO dataset from four major cryptocurrency exchanges, we find that higher policy uncertainty regarding the blockchain leads to a lower return and a lower trading volume of an ICO on its first trading day. Althou...
Article
We study the association between readability of the ICO whitepaper and the offering's first-day return. Using data from the four largest tokens exchanges in Asia, we find that an ICO whitepaper narrative with more readable disclosures is likely to result in a higher initial return for ICO investors.
Article
We use automated techniques to measure causal reasoning on earnings‐related financial outcomes of a large sample of MD&A sections of US firms and examine the intensity of causal language in that context against extent of analyst following and against properties of analysts’ earnings forecasts. We find a positive and significant association between...
Article
Full-text available
This paper investigates the informativeness of rhetorical impression management patterns of CEO letters. We identify three holistic style patterns (assertive acclaiming, cautious plausibility-based framing and logic-based rationalizing) and examine the relationship of each composite linguistic style feature and the properties of earnings forecastin...
Article
Purpose This paper aims to investigate the informativeness of rhetorical impression management patterns of CEO letters and examines whether these rhetorical features affect financial analysts’ forecasting behaviour. Design/methodology/approach The authors use textual analysis on a sample of 526 CEO letters of US firms and apply factor analysis on...
Article
Full-text available
We investigate whether social comparison of a firm’s reported selling, general and administrative (SG&A) expenses affects financial analysts’ information uncertainty (and their behaviour). Based on a sample of US firms, we examine whether similarity of a firm’s SG&A to an industry-specific peer-based benchmark (or social benchmark) is associated wi...
Article
Full-text available
We investigate whether social comparison of a firm’s reported selling, general and administrative (SG&A) expenses affects financial analysts’ information uncertainty (and their behaviour). Based on a sample of US firms, we examine whether similarity of a firm’s SG&A to an industry-specific peer-based benchmark (or social benchmark) is associated wi...
Article
Full-text available
Purpose Using composite style measures of the letter to shareholders, we elaborate dominant rhetorical profiles and qualify them from an impression management perspective. In addition, we examine how institutional differences affect rhetorical profiles by comparing intensity and contingencies of rhetorical profiles of UK and US companies. Design/...
Article
This study characterises and problematises the language of corporate reporting along region, industry, genre, and content lines by applying readability formulae and more advanced natural language processing (NLP)–based analysis to a manually assembled 2.75-million-word corpus. Readability formulae reveal that, despite its wider readership, sustaina...
Conference Paper
In this paper we build a prototype of an evolvable Accounting Information System (AIS) that supports multiple Generally Accepted Accounting Standards (GAAP) reporting. Reporting in multiple GAAP can have different origins: differences in local and tax GAAP, belonging to an economic group or additional regulations. Regulations change frequently: add...
Article
We examine the intensity of management's performance justification as a remedial narrative impression management device, by investigating the association between behavioural earnings thresholds and causal language intensity on earnings-related outcomes in annual management commentary reports. Not meeting key earnings thresholds, such as positive ea...
Chapter
Narrative accounting disclosures are an integral part of the corporate financial reporting package. They are deemed to provide a view of the company “through the eyes of management”. The narratives represent management's construal of corporate events and are largely discretionary. Research in accounting narratives examines informational and present...
Article
We investigate the association between the intensity of causal reasoning on performance in a firm’s annual management commentary and its earnings management propensity. Anticipated earnings management concerns are argued to constitute a significant accountability predicament, bringing management to offer more intense causal reasoning in order to mi...
Conference Paper
Companies need to apply different sets of accounting rules, hence they need evolvable Accounting Information System (AIS) to be able to comply with regulation. This paper uses a mixed methods approach of case studies and design science to develop guidelines for designing an evolvable AIS that supports reporting in multiple Generally Accepted Accoun...
Article
We examine economic benefits of a firm's corporate reputation by investigating the association between its media reputation and properties of trade payables in a sample of listed UK firms. Our results document a significant positive association between a firm's overall media reputation and both the level of its trade accounts payable and the number...
Conference Paper
This paper uses case studies and design science to develop guidelines for designing an evolvable accounting information system (AIS) that supports multiple GAAP reporting. Increasing reporting requirements (following different sets of accounting rules) and the increasing change of these requirements, require evolvable AIS’s of companies to be able...
Conference Paper
This paper uses case studies and design science to develop guidelines for designing an evolvable accounting information system (AIS) that supports multiple GAAP reporting. Increasing reporting requirements (following different sets of accounting rules) and the increasing change of these requirements, require evolvable AIS’s of companies to be able...
Conference Paper
This paper uses a mixed methods approach of design science and case study research to evaluate structures of Accounting Information Systems (AIS) that report in multiple Generally Accepted Accounting Principles (GAAP), using Normalized Systems Theory (NST). To comply with regulation, many companies need to apply multiple GAAP. In case studies we id...
Article
A positive corporate reputation is generally taken to be a valuable intangible resource leading to competitive advantage. In this paper we examine the association between a firm's media reputation and the amount of trade credit given in a sample of listed UK firms. We argue that media reputation is instrumental in mitigating customer information as...
Chapter
Aerts and Tarca (2010) study attributes of performance explanations in management commentary reports provided by 172 companies from five industries in the USA, Canada, the UK and Australia. They report that, compared to their counterparts in the UK and Australia, companies from the USA and Canada are generally less assertive and less defensive in e...
Article
Full-text available
Based on a sample of listed US firms over the period 2002 up to 2011, we study whether conformity to intra-industry benchmarks in reported SG&A (Selling, General and Administrative expenses) as a characteristic of a firm's cost behaviour, is associated with properties of analyst earnings forecasts (analyst forecast dispersion and analyst forecast a...
Conference Paper
This paper uses case studies and design science to develop guidelines for designing an evolvable accounting information system (AIS) that supports multiple GAAP reporting. Increasing reporting requirements (following different sets of accounting rules) and the increasing change of these requirements, require evolvable AIS’s of companies to be able...
Conference Paper
This paper uses case studies and design science to develop guidelines for designing an evolvable accounting information system (AIS) that supports multiple GAAP reporting. Increasing reporting requirements (following different sets of accounting rules) and the increasing change of these requirements, require evolvable AIS’s of companies to be able...
Conference Paper
This paper uses case studies and design science to develop guidelines for designing an evolvable accounting information system (AIS) that supports multiple GAAP reporting. Increasing reporting requirements (following different sets of accounting rules) and the increasing change of these requirements, require evolvable AIS’s of companies to be able...
Conference Paper
This paper uses case studies and design science to develop guidelines for designing an evolvable accounting information system (AIS) that supports multiple GAAP reporting. Increasing reporting requirements (following different sets of accounting rules) and the increasing change of these requirements, require evolvable AIS’s of companies to be able...
Article
Purpose - This paper seeks to examine the association between a firm's extent and precision of customer value disclosure and its implied cost of equity capital. In addition, it aims to investigate whether industry competition intensity attenuates this association. Design/methodology/approach - The content of corporate websites from four continental...
Article
Empirical This study examines whether accruals earnings management is associated with managers' explanations of performance provided in narrative reports accompanying the financial statements in an international setting that covers voluntary and mandatory institutional environments for management commentary (MC) reporting. Differences in institutio...
Conference Paper
Evolvability is a generally accepted challenge in the development and maintance phases of information systems, including accounting information systems. The REA modeling method is a well-known approach for modeling accounting information systems. However its use in practice for developping real-life accounting systems is deemed to be limited. Norma...
Article
This study identifies factors influencing the preparation, scope and content of management discussion and analysis (MD&A) reports provided by SEC registrants. We interviewed U.S., Canadian, U.K., and Australian financial executives during the period December 2009 to May 2010 to better understand how the reporting environment affects managers’ abili...
Article
We examine the association of earnings management and narrative impression management as reflected in properties of causal explanations of reported earnings in the prospectus of Chinese IPO firms. Anticipated earnings management concerns are argued to be a significant incentive for causal disclosures on earnings in order to rationalize and legitimi...
Article
Quite often, in order to derive meaningful insights, accounting researchers have to analyze large bodies of text. Usually, this is done manually by several human coders, which makes the process time consuming, expensive, and often neither replicable nor accurate. In an attempt to mitigate these problems, we perform a feasibility study investigating...
Article
We examine the association of self-presentational causal disclosures on earnings-related outcomes in the prospectus of Chinese IPO firms and short-term IPO valuation (offer price-based valuation and IPO first-day underpricing). Using detailed content analysis of causal explanations in the management commentary section of the IPO prospectus, we find...
Article
Purpose – This paper aims to study conformity tendencies in selling, general and administrative (SG&A) expenses reporting of US firms through an institutional lens. Design/methodology/approach – The paper examines intra-industry conformity in SG&A reporting over a ten-year period among a sample of US firms. It measures conformity by comparing a fir...
Article
Purpose The purpose of this paper is to study the impact of intra‐industry conformity tendencies on dividend policy among a large sample of US firms. Design/methodology/approach The paper explores mimetic influences on dividend policy. Consistent with prior institutional research, the paper measures mimetic pressures as institutional prevalence or...
Article
A positive corporate reputation is generally taken to be a valuable resource leading to competitive advantage. In this paper we examine the association between a firm's media reputation and the amount of trade credit given in a sample of listed UK firms. Consistent with expectations, our results show that a firm's willingness to extend trade credit...
Article
Full-text available
In this research, we examine a unique aspect of China's regulatory regime, where earnings guidance disclosures are required for loss firms and firms with material net income increases/decreases (50% or more). We find that Chinese firms are reluctant to provide earnings guidance disclosures voluntarily, especially bad news disclosures. Importantly,...
Article
Full-text available
The aim of this study is to investigate whether country differences in the institutional setting for financial reporting affect the attributes of managers’ explanations of performance in management commentary reports. We include 172 listed companies from five industries (building materials, food processors, pharmaceuticals, biotechnology and retail...
Article
Purpose – The purpose of this paper is to investigate the impact of governance on information asymmetry between managers and investors. Hence, the paper seeks to extend prior voluntary disclosure research. Design/methodology/approach – The paper investigates how a firm's governance maps into the level of information asymmetry between managers and i...
Article
Manuscript Type: Empirical Research Question/Issue: This study examines the effect of an earnings-based listing regulation on corporate financial reporting management. In 2001, China revised its listing standards requiring compulsory stock suspension for firms reporting three-year consecutive losses. Suspended stocks are further delisted if they co...
Article
Adopting a monitoring perspective, this study aims to explain how and why firms provide web-based disclosure about their value creation and its underlying processes. We rely on the balanced scoreboard approach to measure disclosure. Our results suggest that costs incurred by capital markets' participants as well as monitoring by the board and the m...
Article
We study the association of Web-based non-financial disclosure and a firm's cost of finance within an international context (North America and continental Europe). We examine voluntary Web placement of non-financial disclosures using an information index covering a firm's value creation process. We find a negative association between the level of W...
Article
Full-text available
Purpose – The purpose of this paper is to examine empirically the impact of web-based intellectual capital (IC) reporting on firm's value and its cost of finance. Design/methodology/approach – A content-analysis of corporate web sites is conducted from four continental European countries (Belgium, France, Germany and The Netherlands) on the presenc...
Article
We extend the literature on voluntary disclosure by investigating the impact of precision attribute of social and human capital disclosure on information asymmetry. We provide evidence on how the stock market reacts to different levels of information precision. Overall, results suggest that quantitative disclosure reduces share price volatility and...
Article
Using a direct measure of environmental legitimacy, we explore the impact of annual report environmental disclosures and environmental press releases as legitimation tools. The sample comprises North American firms (Canada and the United States). The results obtained show that environmental legitimacy is significantly and positively affected by the...
Article
We examine the impact of ownership structure on two distinct investor perception management processes: earnings management and explanatory impression management with regard to earningsrelated outcomes. Using detailed content analysis of earnings explanations in the MDA (Management Discussion and Analysis) section of 104 recent Chinese IPOs, we find...
Article
We study the effect of expected regulatory and litigation costs embedded in a country’s institutional environment on the explanatory content of management commentary reports. Using a behavioural accountability lens, we argue that regulatory control and expected litigation risk affect the attributional framing of financial performance. We also inves...
Article
Prior studies (see e.g. [Rosch, E. (1975). Cognitive reference points. Cognitive Psychology, 7, 532–547]) indicate that multiples of ten serve as cognitive reference points with a view to perceiving and evaluating numbers. In order to explore whether managers set dividends per share (henceforth DPS) at or just above a cognitive reference point, we...
Article
In this study, we analyze the information dynamics between corporate environmental disclosure, financial markets (as proxied by financial analysts' earnings forecasts) and public pressures (as proxied by a firm's media exposure). We adopt a comprehensive view of disclosure that encompasses environmental information that is both print-based as well...
Article
In this study, we assert and test that the determination of corporate performance communication and financial analysts' earnings forecasting work are closely intertwined processes. The resulting endogeneity in capital markets' information dissemination and use is strongly influenced by a country's governance regime. Results from simultaneous equati...
Article
The possibility of measuring and comparing sustainability performance is generally taken for granted in management studies and practices based on the evaluation, selection and ranking of the supposedly best companies in the field. The purpose of this article is to question this basic assumption by analyzing the comparability of sustainability perfo...
Article
Full-text available
Tous droits réservés pour tous les pays. Toute traduction et toute reproduction sous quelque forme que ce soit sont interdites. Les textes publiés dans la série «Les Cahiers du CREF» de HEC Montréal n'engagent que la responsabilité de leurs auteurs. La publication de cette série de rapports de recherche bénéficie d'une subvention du programme de l'...
Article
Full-text available
The advent of Internet has expanded considerably the reach of corporate disclosure. In this paper, we explore two related questions: (1) what are the scope and patterns of corporate socio-economic disclosure on the Internet? (2) What are the determinants of corporate socio-economic disclosure on the Internet? Socio-economic disclosure relates to co...
Article
The purpose of this study is to assess how a firm’s disclosure regarding its web-based performance disclosure maps into financial analysts’ earnings forecasts. We assert and empirically test that the determination of a firm’s web-based performance disclosure and financial analysts’ earnings forecasting work are closely intertwined processes. Howeve...
Article
Full-text available
Using an exploratory research perspective, we examine how multinational firms¿ executives¿ motivations map into corporate website performance disclosure. Our focus is on managements¿ beliefs about the relevance of financial, social and environmental performance disclosures and how these beliefs relate to the firm¿s website disclosure practices. For...
Article
This paper provides a review of the empirical earnings management literature. In particular, it presents a review of the factors that induce and constrain earnings management through accounting decisions. The consequences of actual or assumed earnings management are also discussed. The far majority of the literature focuses on the Anglo-Saxon conte...
Article
Self-serving attributional tendencies in annual report narratives are generally construed as purposive impression management behaviour. Attributional biases in accounting narratives could, however, be primarily the result of a cognitive informational process rather than of an external impression management process. Existing research results are equ...
Article
The purpose of this study is to provide an integrated analysis of corporate environmental communication strategies using stakeholder theory. More precisely, we argue that there is a symbiotic relationship between managerial decisions with respect to environmental disclosure and stakeholders. On the one hand, stakeholders’ claims determine manageria...
Article
Corporate environmental reporting (CER) has been studied from different angles. In this paper we focus on CER from a neo-institutional perspective. CER could indeed be considered as a set of structures and practices that became institutionalised over time. Organizations derive their legitimacy in part from having reporting structures that are seen...
Article
Studies of verbal behaviour in the context of financial accounting narratives have evidenced self-presentational tendencies in corporate framing activities. Different authors demonstrated the tendency to attribute positive effects or outcomes to the company’s own actions or corporate origins (company strategy, decisions, know how, human resources p...
Article
Narrative disclosures in annual reports reflect explanatory activities in which specific attribution patterns can be identified. Research on corporate attributional behaviour within the context of financial accounting narratives has documented this behaviour and evidenced significant preferences for certain kinds of explanations in particular circu...
Chapter
Belgian companies have never taken a pioneering role in the field of consolidated or group accounting practices. Neither has Belgian legislation taken a pro-active stand on consolidation matters.
Article
This paper explores the relative use of performance explanations in terms of the internal logic of the financial accounting model, relating (intermediary) accounting effects and categories (accounting explanations) in annual report narratives. Different communicative aspects of accounting explanations are discussed and lead us to qualify accounting...
Article
Full-text available
Self-serving attributional tendencies in annual report narratives are generally construed as purposive impression management behaviour. Attributional biases in accounting narratives could, however, be primarily the result of a cognitive informational process rather than of an external impression management process. Existing research results are equ...
Article
An introductory financial accounting book for non-specialists, aimed at courses requiring a non-domestic approach to accounting. The book is international in approach and based on the new IFRS GAAP regime for listed European companies (which came into effect in 2005). The book gives students direct exposure to definitions of assets, liabilities and...

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