HOW NEGATIVE MEDIA COVERAGE OF A COMPANY'S CSR PRACTICES AFFECTS CASH FLOW FORECASTING BY ANALYSTS

Authors

  • Meiying Hua Assistant Professor, Accounting and Finance Department, University of Wisconsin – River Falls, United States
  • Christopher Groening Associate Professor, Department of Marketing and Entrepreneurship, Kent State University, United States

Keywords:

Corporate social irresponsibility, CSIR, cash flow forecasting, financial analysts, reputation, risk assessment.

Abstract

In this study, we investigate the impact of corporate social irresponsibility (CSIR) on cash flow
forecasting by financial analysts. We use RepRisk AG's CSIR media reporting dataset with 50,365 firmyear observations to examine whether the negative reputation of a firm's CSIR affects analysts' decisions to
issue cash flow forecasts. The results reveal that analysts are less likely to issue cash flow forecasts when a
firm has a poor CSIR reputation, highlighting the importance of CSIR in assessing firm value. We also
found that the effect of CSIR reputation is contingent on firm and industry-related variables, either
positively or negatively, moderating the effect. Additionally, the disaggregated dimensions of CSIR
reputation (environmental, social, and governance) exhibit the same negative relationship with analysts'
decisions to issue cash flow forecasts. Our findings provide insight into how analysts approach CSIR,
highlighting the importance of reputational effects on cash flow forecasting.

Published

2022-10-11

How to Cite

Meiying , H., & Groening, C. (2022). HOW NEGATIVE MEDIA COVERAGE OF A COMPANY’S CSR PRACTICES AFFECTS CASH FLOW FORECASTING BY ANALYSTS. SADI International Journal of Management and Accounting (SIJMA), 9(4), 1–23. Retrieved from https://sadijournals.org/index.php/SIJMA/article/view/349

Issue

Vol. 9 No. 4 (2022): October- December

Section

Original Peer Review Articles
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