Accounting Essay: The Impact of Impression Management on Investors

This essay critically analyzes impression management within the context of financial reporting, drawing upon the provided article by Hellmann, Yeow, & de Mello (2017). It addresses the objectivity and neutrality of accounting information, highlighting how companies may manipulate financial statements to influence investor perceptions. The essay explores the motivations behind impression management, which include maintaining a positive corporate image and attracting stakeholders. It discusses impression management strategies, such as window dressing, and examines their effectiveness and ethical implications, particularly concerning the accounting profession. The author argues that while impression management can be a tool for good corporate governance, it should be restricted to ethical practices, and professional accountants should guide companies in ways that adhere to accounting standards and regulations. The essay concludes by emphasizing the importance of ethical conduct in the accounting field and the potential consequences for accountants involved in misrepresentation.

Running head: ACCOUNTING
Accounting
Name of the Student:
Name of the University:
Author’s Note:

1ACCOUNTING
Nonprofessional professional investors rely upon the published financial information of
the company. They use evaluates the financial performance and financial position of the
company based on the key figures disclosed in the financial statement of the company. Though
there are various other sources from where investors can gather information about the financial
and operational performance of the company, they do objectively use the published financial
information for their investment decision. Investors believe it to be neutral source of information
for their analysis and investment decision-making. In my opinion, the published financial
information may always not be a neutral source of information. Various corporate frauds can be
cited where companies have manipulated the figures in their financial statement to attract
investors.
Impression management can be considered as a proactive and reactive process intended
for maintaining the corporate identity. Therefore, the main motivation behind the impression
management is to maintain a good corporate image and to maintain the corporate identity. The
proactive approach of impression management is to exhibit such corporate behaviors, which will
attract the interest of various stakeholders and will receive good complements from the investors
and stakeholders. On the other hand, the reactive impression management is the process of
gathering feedbacks from the customers and stakeholders and to take such corrective initiatives,
which will help them to make improvement in their process and corporate behaviors. In my
opinion, the main objective of the impression management is to maintain good corporate
governance practices, which will help the organization to achieve a sustainable growth.
There are various impression management practices and strategies such as window
dressing of the financial information in the financial statements and presentation of manipulated
corporate governance information to the stakeholders. I can observe from various case studies

2ACCOUNTING
including the paper “The impact of information presentation order on the judgements of non-
professional investors”, that most of the companies prefer to attract the stakeholders by
presenting manipulated financial information. Sometimes they get success in achieving their
objectives by window dressing of the financial information, but it might be unsuccessful if the
corporate governance compliance rules are strict and management and public accountants deliver
their duties with honesty and professionalism.
Impression management initiatives can be against the ethical accounting and professional
practices, hence such activities might involve some management and professional accountants. If
professional accountants are found to be involved with such window dressing of the financial
information and misrepresentation of the financial information of the company then, their status
of being public accountants and the authority of auditor might be cancelled. Therefore, in my
opinion, impression management should be restricted to the ethical corporate practices and
professional accountants should suggest such ways of impression management to the
management of the companies, which are within the statutory and accounting norms of the
respective countries.

3ACCOUNTING
Bibliography:
Bolino, M., Long, D. and Turnley, W., 2016. Impression management in organizations: Critical
questions, answers, and areas for future research. Annual Review of Organizational Psychology
and Organizational Behavior, 3, pp.377-406.
Hall, J.A., Pennington, N. and Lueders, A., 2014. Impression management and formation on
Facebook: A lens model approach. New Media & Society, 16(6), pp.958-982.
Hellmann, A., Yeow, C. & de Mello, L, (2017). The impact of information presentation order on
the judgements of non-professional investors. Accounting and Business Research, 47(4), pp.
445-470.
Rosenfeld, P., Edwards, J.E. and Thomas, M.D., 2015. Impression management. Wiley
Encyclopedia of Management, pp.1-2.