Impression management in financially distressed firms: Evidence from integrated reporting in Australia

Anthony C. Ng; Ferdinand A. Gul

doi:10.1016/j.jcae.2026.100542

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Impression management in financially distressed firms: Evidence from integrated reporting in Australia

Journal article

Open access

Peer reviewed

Impression management in financially distressed firms: Evidence from integrated reporting in Australia

Anthony C. Ng and Ferdinand A. Gul

Journal of Contemporary Accounting and Economics, Vol.22(1), pp.1-37

2026

DOI: https://doi.org/10.1016/j.jcae.2026.100542

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Abstract

financial reporting

integrated reporting

firm value

impression management

obfuscation

financial distress

This study investigates whether financially distressed firms in Australia utilize integrated reporting (IR) as a tool for impression management (IM) to conceal poor financial performance. Using data from 2015 to 2017, we construct an IR conformity (IRC) index based on the International Integrated Reporting Council (IIRC) framework. We find a non-linear and concave relationship between IRC and firm value among distressed firms: while moderate IR conformity is positively associated with firm value, higher conformity is penalized by the market. Additional corroborative analyses reveal similar non-linear patterns between IRC and bid–ask spreads, crash risk, and earnings management proxies. These findings suggest that distressed firms may strategically adopt IR to manage impressions rather than enhance transparency and that capital markets tend to respond negatively to excessive IR conformity.

Details

Title: Impression management in financially distressed firms: Evidence from integrated reporting in Australia
Authors: Anthony C. Ng (Corresponding Author) - The University of Melbourne
Ferdinand A. Gul - University of the Sunshine Coast, Queensland, School of Business and Creative Industries
Publication details: Journal of Contemporary Accounting and Economics, Vol.22(1), pp.1-37
Publisher: Elsevier Ltd
Date published: 2026
DOI: 10.1016/j.jcae.2026.100542
ISSN: 2352-3298; 1815-5669
Data Availability: The authors do not have permission to share data.
Organisation Unit: School of Business and Creative Industries
Language: English
Record Identifier: 991200022602621
Output Type: Journal article

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