The content, evolution and determinants of COVID-19 disclosures in Canadian financial statements and MD&A documents: An impression management perspective

Abstract

We assess content, evolution and determinants of COVID-19 disclosures in accounting documents using natural language processing for TSX60 firms. We evaluate sentiment, extent of disclosure, choice of disclosure medium, links to governance, and the relationship with performance. We focus on accounting-related disclosures, an understudied aspect of corporate responses to the pandemic, and add to the choice of disclosure media literature. Our unique forward-looking longitudinal approach to understanding the content, evolution and determinants of COVID-19 corporate disclosures includes an evaluation of how these disclosures are affected by corporate governance and jurisdictional factors. Our findings include evidence of an inverse relationship between causal reasoning in disclosures and performance, with firms attributing poor performance to the pandemic across years, consistent with impression management.