Financial Statement Comparability and Managers’ Linguistic Choices in Conference Calls

This study examines the impact of financial statement comparability on managers’ decisions of linguistic complexity in conference calls. We find that financial statement comparability lowers managerial linguistic complexity during conference calls. By further decomposing managerial linguistic complexity into an information component and an obfuscation component, we find that comparability lowers the information component of conference calls, but not the obfuscation component. This finding suggests that managers strategically adjust the information content of disclosure during conference calls depending on financial information comparability. This strategic disclosure behavior in conference calls is manifested under management disclosure incentives based on firms’ market positions. Overall, our findings advance our understanding of management disclosure incentives regarding voluntary disclosure concurrently with financial statement comparability.