Project Director

Wilkins, Anne

Department Examiner

Jones, Rebecca; Sompayrac, Joanie


Dept. of Accounting


University of Tennessee at Chattanooga

Place of Publication

Chattanooga (Tenn.)


Prior research show that many investors rely on other information appearing alongside the audited financial statements in companies’ annual reports to make their economic decisions and falsely assume that the unaudited other information is also audited. Additionally, company management utilizes rhetorical strategies in other information to offer explanations and opinions conveying positive messages about the company value which audited financial data may not indicate. The expectation gap of investors on audit over other information and the concern of management manipulation incentivized the proposal of the Public Company Accounting Oversight Board (PCAOB) to establish a standard to extend auditors’ responsibility over the other information. Similarly, the International Foundation of Accountants (IFCA) revised the auditing standard ISA 720, effective for the years ending on or after December 15, 2016, that “requires the auditor to read and consider the other information.” This study addresses the question of how the revised ISA 720 would impact this use of rhetoric in financial reporting, or more specifically, how the increased auditors’ responsibilities over other information, internationally enacted by the revised ISA 720, would decrease management’s positive massaging as a rhetorical strategy used in those texts. This study serves as a starting point for discussing the fundamental question of how rhetoric in financial reporting should and could be regulated and provides some evidence for PCAOB on whether additional regulation of other information is worth compliance costs to the company.


My special thanks go to my thesis director, Dr. Anne Wilkins for her expert guidance and continuous support throughout this project. I would also like to express my gratitude to my examining committee, Dr. Rebecca Jones and Dr. Joanie Sompayrac, for their insightful comments and encouragement. Additionally, I would like to thank Mr. Alexis Devitre for the technical help as well as my family and friends for their emotional support every step of this process.


B. S.; An honors thesis submitted to the faculty of the University of Tennessee at Chattanooga in partial fulfillment of the requirements of the degree of Bachelor of Science.




Accounting; Auditing -- Standards; Financial statements -- Standards


Rhetoric; Accounting; Audit; Financial reporting; Regulation; Textual analysis



Document Type



35 leaves




Under copyright.


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