Joint credit system, accounting information quality, and management's tone management in annual reports

Based on data from Chinese listed companies during the period from 2012 to 2023, this study investigates the relationships among the joint credit system, accounting information quality, and management's tone in annual reports. The findings indicate that the joint credit system exerts a significant influence on the tone of management's annual reports: on the one hand, it positively affects the use of optimistic tone; on the other hand, it negatively affects the use of pessimistic tone. Furthermore, the joint credit system indirectly influences management's tone through the enhancement of accounting information quality. The mediating role of accounting information quality between the joint credit system and report tone exhibits heterogeneity among firms with different levels of financial leverage. This study provides a new theoretical perspective for understanding how the joint credit system affects the tone of management's annual reports through accounting information quality.