Companies in judicial reorganization: An analysis of print management in management reports

Abstract

Print management in financial reports is a mechanism to change the user's perception of accounting information, directing them to the understanding desired by the firm's management. In judicial reorganization scenarios, financial reports can be used as an instrument to legitimize the condition of the firm or the chain of events that led it to this condition. This research aims to verify whether there is characteristic evidence of print management in the management reports of publicly-held companies listed on B[3] that entered the judicial reorganization process in the period between 2014 and 2019. The set of data analyzed are from companies that obtained approval of their request for judicial reorganization in the period with management reports published on the CVM website. 66 reports from 11 companies were analyzed in the periods of 3 years before and 3 years after the judicial reorganization process. For analysis, two print management metrics were adopted, the TOM and the Flesch Readability Index (IFLF). The data were analyzed descriptively and by non-parametric correlation instruments. The result of the analysis showed that there is a change in the print management (TOM) of the accounting narratives with a tendency to neutrality from the third year to the first year before the judicial reorganization process of the analyzed firms. The result of the survey made it possible to consider that companies tend to reduce the positive TONE of accounting narratives as they approach a scenario of judicial reorganization, and that after this scenario there is a tendency to return to the management of the printing of reports. The results of this study also contribute to the perception of market agents about possible changes in the narratives of companies' accounting reports when their indicators tend to scenarios of financial difficulties.