Designing a Structural Model of the Impact of Financial Narrative Disclosure on the Credibility of Financial Reports

Document Type : Original Article

Authors
Ali Omer Mohammed Al Barazanji 1
Fereydon Rahnamarodposhti 2
HAMIDREZA KORDLOUIE 3
Maziar Ghasemi 4
1 Ph.D. candidate, Accounting Department, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran
2 Professor, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University
3 Associate Professor, Financial Management Department, Faculty of Accounting and Management, Islamshahr Branch, Islamic Azad University, Islamshahr, Iran
4 Assistant Professor, Department of Management, Adiban Higher Education Institute, Garmsar, Semnan Province, Iran
10.22034/jik.2026.24250
Abstract
Financial narrative, by combining intra-organizational factors (management incentives, transparency culture), exogenous factors (regulations, stakeholder pressure), and content characteristics (presentation structure, level of transparency), directly shapes the credibility of financial reports; in such a way that the more the narrative is based on supporting data, analytical balance (simultaneous mention of opportunities and risks), and intentional transparency, the content credibility of the report increases by strengthening components such as corporate governance quality, external validation capability, and coherence with technological innovations. The method used in this research is fieldwork and factor analysis. The statistical population of this research included people active in the accounting and auditing profession, and a questionnaire was completed in 1404. The method used in this research was a combination. Initially, the multifaceted grounded theory method was used to identify the research variables using interviews and searches in previous research. The influential factors were finalized using the Lavosheh index. Finally, the research questions were analyzed using factor analysis. Finally, the model of the impact of the type of financial narrative on the credibility of the content of financial reports was presented. The results showed that the results of the research showed that financial narrative, including (internal factors (inherent to the company), external factors (environmental), content factors, presentation structure, level of transparency) has a direct effect on the credibility of the content of financial reports, including (quality of corporate governance and supervisory structure, characteristics of report content, external validation, contextual and behavioral factors, technology and innovation in reporting).
Keywords
Type of financial narrative, credibility of the content of financial reports JEL: C52،M42،M40،D21
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