If a firm says it’s ethical, you might want to be sceptical

Firms whose reports included trust words were found to pay much more in auditing fees than others. (Image: Depositphotos)

The Wall Street Journal

Fri, 28 Jun 2024

By Lisa WardCertain words that many companies use in their annual reports – words like ethical, integrity and responsibility – are meant to convey trustworthiness.But new research suggests that firms that use such words in their annual filings, known as 10-Ks required by the US Securities and Exchange Commission (SEC), are associated with a variety of negative outcomes.Use of the words in annual statements, for instance, was correlated with a decreased interest in the stock of the company in question, the study found. In the fi...

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