Accounting and Investment: Impression Management & Investor Decisions

This report investigates the influence of impression management strategies, particularly the order of textual presentation and the use of graphical elements, on the investment decisions of non-professional investors. The study highlights that non-professional investors, lacking the experience and knowledge of their professional counterparts, are more susceptible to cognitive biases and the recency effect. Companies often employ self-promotion strategies, manipulating the presentation of information to influence investor perceptions. Research indicates that the placement of negative and positive information within financial documents significantly impacts investment choices. For example, presenting positive information at the end of a document can increase the likelihood of investment. The report concludes that textual presentation order and graphical cues can significantly impact the decisions of non-professional investors, making them vulnerable to impression management tactics, especially by underperforming companies. The report references supporting research and provides insights into the practical implications of these findings within the financial market.

Running head: THE INFLUENCE OF TEXTUAL PRESENTATION
The influence of textual presentation order and graphical presentation on the judgements of non-
professional investors
Name of the Student:
Name of the University:
Author note:

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Title- The influence of textual presentation order and graphical presentation on the judgements
of non-professional investors
Alternative Title: Accounting and Investment
Background:
The impression management is an important strategy adopted by the organizations in
order to influence the investment decision of the non-professional investors, who are less
experienced and knowledgeable to be able to assess the disclosure credibility of the management
in an effective way.
Overview:
Nowadays, many companies use deceptive language while communicating their potential
prospects in future, solely with the purpose of alluring the non-personal investors, who in the
most of the cases, are unable to see through the motives of the management authority. They pay
more heed to qualitative rather than quantitiave information, and end up getting swayed by the
impression management strategies of the companies.
Issues:
Research has indicated that the non-professional investors are more inclined to suffer
from cognitive bias and imitation, while choosing to invest in a company than the professional
counterparts. These people experience what is termed as bounded rationality, that prevents them
from making effective decisions, simply because they act on incomplete information and explore
a very limited number of alternatives, before choosing to invest (Axjonow et al., 2016). Since the

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non-professional investors are growing in number, the way impression management can affect
their decision-making process, can have a remarkable impact on the financial market as a whole.
Analysis:
More than often, the companies adopt the self-promotion strategy, as part of their
impression management strategy, in tempting the attention of the non-professional investors.
While they are dictated by the governmental laws to provide the most authentic information to
the clients, they would deliberately distort the languages or alter the pattern in which information
is being presented to the investors. For instance, research suggests that approximately 64% of the
non-professional investors were less inclined to invest in a company, when negative information
were being presented in the last part of the agreement paper (Hellmann et al., 2017). This is
exactly the reason why negative information are kept in the middle, which part the investors tend
to ignore the most, and the positive information are presented in the last part to influence
investor decision. The same research suggests that 71% of the non-professional investors
exhibited inclination to invest in a company, when positive information were being presented in
the end (Hellmann et al., 2017).
Position:
If my view is to be considered, I would certainly state that the way impression
management can affect the decision of a non-professional investor does not hold truth for the
professional counterpart. The non-professional investors are much more susceptible to any kind
of recency effect, as they lack any practical experience or knowledge that they could apply while
investing in shares of a company. Consequently, I think that the textual presentation order and

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the graphical presentation can have a significant impact on their investment decision of the non-
professional investors.
Final Comments:
To conclude, it is evident that different companies, especially the poor-performing
companies employ the use of self-promotion strategies and others as part of their impression
management strategies to improve their perception in the minds of the non-professional
investors. With the change in text presentation order, or graphical cue, it becomes easier for the
companies to influence the investment decision of the non-professional investors.

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Reference List:
Axjonow, A., Ernstberger, J., & Pott, C. (2016). The impact of corporate social responsibility
disclosure on corporate reputation: A non-professional stakeholder perspective. Journal
of Business Ethics, 1-22.
Hellmann, A., Yeow, C., & De Mello, L. (2017). The influence of textual presentation order and
graphical presentation on the judgements of non-professional investors. Accounting and
Business Research, 47(4), 455-470.