The purpose of this paper is to investigate whether companies listed on the Johannesburg Stock Exchange use impression management techniques to obscure financial performance across the corporate reporting suite.
Mixed-effect linear regression models were used to examine whether there is a relationship between the financial performance of a company and the length or complexity of the reports produced.
Consistent with trends examined internationally, companies with lower financial performance tend to present lengthier disclosures throughout the reporting complement. However, there is limited evidence to suggest a definitive relationship between report complexity and performance. Corporate reports have maintained a consistent level of complexity and are not easily readable.
This paper is unique as it simultaneously considers multiple corporate reports, including the annual financial statements, integrated reports and market announcements. The paper contributes to the limited body of literature on impression management from emerging economies.
A comparison of the complexity measures to the average education level of South Africans indicates that most corporate reports are not readable to the layman investor. Thus, despite there being no definitive relationship between complexity and performance, there is impetus to simplify corporate reporting.
