关键词: 语调, 可读性, 公司违规, 信息强化效应, 金融监管

Abstract: Based on the text information abstracted from the annual financial reports of Chinese A-Share listed companies from 2006 to 2019, this paper examines the economic relationship between the tone and readability of the annual report and corporate fraud risk. The three main findings are as follows: first, with the increase of the negative tone and decrease of the readability of annual financial report, the probability and severity of corporate fraud increase significantly. Second, the mechanism test illustrates that tone and readability indicators convey incremental information of firm’s financial distress and operational risk, and then help identify the corporate potential fraud risk. Third, when the firm’s information transparency is low and profitability is poor, the negative tone can be supplementary verification of performance indicators, revealing that the firm faces greater fraud motivation. Similarly, when the readability indicator is low, the negative tone indicator shows information reinforcement effect. The interactive verification of two textual indicators can effectively identify the potential motivation of corporate fraud. The above results show that textual data abstracted from annual reports of listed companies could serve as an innovative tool for regulators to improve supervision efficiency, forestall and defuse major risks.

Key words: Tone, Readability, Corporate Fraud, Information Reinforcement Effect, Financial Regulation