1. Introduction
The purpose of this study was to investigate and report the relations among social media and accounting and auditing. We chose to analyze the relationships between social media and accounting and auditing because the ubiquitous adoption of Internet technologies in both fixed and mobile forms has driven the widespread growth of social media that operate within global social networks [
1]. Moreover, investors can not only monitor a brand’s performance, but also predict its future value [
2]. Social media can be powerful in changing users’ opinions [
2]. In other words, we can remember Tesla’s share value after the CEO’s (Elon Musk) tweets that the company is going to go private and about the unexpected productivity, which led to a soar in Tesla stocks [
3]. Musk’s Twitter habit has already cost the CEO and Tesla
$40 million in fines and forced Musk to give up his role as chairman in a settlement with the Securities and Exchange Commission over the tweets about taking the company private [
4]. A year after Musk’s infamous tweet, Tesla failed to deliver the profitability that was promised, despite strong sales growth [
3]. If we take into consideration the recent news concerning COVID-19 and the need for the application of a new sustainability reporting system, which would have a pervasive impact on the entire economic and social fabric of the world post-COVID-19 [
5], we can understand that we are going to face an unexpectedly rapid change in our basic routines, more than we can imagine.
Thus, it is evident that social media have become a crucial part of our lives. During the COVID-19 pandemic, social media platforms such as Twitter and Facebook have played an important role in conveying information, both accurate and inaccurate, thereby creating mass confusion [
6]. As the response to COVID-19 has reduced face to face contact, communication via social media has increased [
6]. Moreover, before the COVID-19 pandemic, plenty of studies had tried to explain social media’s impact on our lives [
2]. Schniederjans et al. [
7] analyzed the relation between a company’s performance and its impression management on social media. Luo et al. [
2] studied the impact of social media on stock’s future value. Akmese et al. [
8] deduced that companies that were being traded on BIST and had active social media accounts achieved higher performances than entities with inactive social media accounts. Drake et al. [
9] suggested that the equity research posted online by social media analysts provides investors with information that is similar to but arrives earlier than sell-side equity research.
This study actually tries to fill the corporate knowledge gap about social media, accounting and auditing, in response to the crucial points about them, hopefully leading to the existence of useful data to companies. As social media accounts can attract stakeholders, accounting can show the real time results of this attraction, and auditing can inform the stakeholders about the entity’s actions. Thus, there is a theoretical connection among these factors, and we aimed to prove this relation with quantitative research in a population that included Greek companies listed on ATHEX. In our study, we used Greek listed companies because many of them have underdeveloped social media strategies, and their reports came from different audit companies (not only Big4 firms), but they also involved different auditing opinions (not only unmodified opinion). We also included companies that have not having the ability to operate as a going concern. Additionally, listed Greek companies have similar reporting of financial statements, because they are listed on the Greek Stock Exchange. Thus, because of the characteristics we mentioned above, the results will be constructive for future studies. Twitter, Facebook and LinkedIn were chosen as the social media platforms, because they are already developed, and they are capable of providing validated and useful corporate information. More specifically, Twitter and LinkedIn are quite popular in the corporate environment, and Facebook was one of the top social media platforms in Greece in 2018 [
10]. We gathered the posts of social media accounts for the 2018 fiscal year in this case. These posts were analyzed by their content based on Yang J. and Liu S.’s research [
11]. According to Yang J. and Liu S. [
11], firms employ an assertive impression management (IM) strategy to emphasize positive outcomes through multiple self-presentational patterns, and tend to omit negative earnings news by posting a significantly lower volume of negative earnings-related tweets than positive earnings-related tweets. Therefore, we took into consideration the (IM) strategies as expedient in our research in order to characterize social media posts; for instance, we categorized social media posts according to their content as direct positive with financial content, direct positive with non-financial content, neutral and negative. We created the appropriate sample for each given question, and with the support of the Kruskal–Wallis model and OLS regression model, we came up with research results.
Concerning the paper’s structure, in
Section 2, we review the existing and relevant literature on social media, accounting, finance and auditing.
Section 3 introduces the methodology of the research and analyzes the hypothesis.
Section 4 examines the statistical and econometrical data, and the results as well. Finally,
Section 5 discusses the conclusions of the research, the implications and suggestions for future research.
5. Conclusions
We explored the relation among social media, accounting, and auditing. We found that social media use had a positive effect on company gross profits. In other words, the companies that had at least one social media account on Twitter, Facebook or LinkedIn and applied an assertive strategy of impression management were more profitable than the entities that did not have any social media account, or they had inactive social media accounts. Findings of a specific model revealed that the companies with at least a social media account on Twitter, Facebook or LinkedIn presented higher profits than entities without any account.
This paper provides insights into accounting effects on social media posts. From an OLS regression model, we conclude that total assets, earnings before taxes and total liabilities impact on Twitter’s general posts and the impression management strategies as well. Due to positive coefficients of variables, we understand that when the company intends to increase profits or plans to pay its liabilities, it boosts general posts on Twitter and it follows an assertive impression management strategy. Due to the negative coefficient of total assets, it is evident that when a company presents a high value of total assets, it is not going to boost general social media posts. In addition, we found that there is a powerful dependency between total liabilities and general posts on Facebook. There is also a strong negative correlation between total assets. Therefore, as with Twitter’s case, when the company intends to raise their profits, it will increase general Facebook posts. When the value of total assets is limited, then the entity boosts general Facebook posts. The results are included in
Table 8.
We deduce that financial posts on Twitter are closely related with total assets, cash and total liabilities at the 0.05 level. Like the previous cases, when the value of the total company assets is low or starts to be diminished, the company increases financial posts on Twitter; while when the company is going to pay its liabilities or there is a need for cash, the financial posts on Twitter are going to be increased. Moreover, because of F(5,75) = 1.180397, the accounting determinants (intangible assets, cash, total assets, earnings before taxes and total liabilities) are of high use in explaining financial posts on Twitter. Nevertheless, there are no sufficient results for Facebook financial posts. In other words, only total liabilities can affect Facebook financial posts at the 0.05 level. The results are included in
Table 7.
Studying the four analyzed OLS models, we conclude that both types of posts (general and financial) are dependent on the total liabilities. This is something that we can see in everyday life, if we think that most of the companies boost their postings in their peaks. Secondly, it is evident that the dependency between general posts and accounting determinants is higher than the correlation between financial posts and accounting factors. Thirdly, the regression models depict that when the total assets are being increasing, total liabilities are going to be raised, no matter the correlations on Twitter and Facebook. This is a fact that can be justified by the equation: Total Assets = Total Liabilities + Equity. However, we did not find any correlation between auditing and social media posts. In other words, applying the Kruskal–Wallis model, we cannot suggest that Twitter and Facebook posts depend by audit opinion or by the company’s ability to continue as a going concern.
Widespread use of social media has equal potential to transform corporate agendas and to create a recipe for organizational value and competitiveness. This, also, accentuates the claim that a firm’s strong and well-established presence in social media is a key element to its success [
40]. Our study tried to provide further evidence of the effect of social media in accounting and auditing. We relied on the strategies of Yang J. and Liu S.’s (2017) research [
11] in order to categorize our data, and followed the research pattern of Mohamed et al. (2016) [
28] in order to analyze the relationship between the accounting and auditing variables and social media posts. However, we extended the models of Mohamed et al.’s (2016) [
28] research, and we added into our study more accounting variables, and we inserted for the first time auditing variables (auditor’s opinion and going concern) in order to analyze if social media can affect audit definitions. Thus, our study is the first study that extends and analyzes:
If a companies’ social media accounts have an effect in change of profits.
If there is a relationship among accounting data and social media posts.
If there is a relationship between auditor’s opinion, company’s ability of going concern and social media posts.
Taking into consideration the relative background of studies between social media, accounting and auditing, the literature is quite limited; for this reason, our study is focused on the collection of data of corporate social media accounts and the development of statistical and econometrical models to analyze the relationship between social media posts and strategies in relation to specific accounting and auditing variables.
The study can have a valuable impact and practical results on corporate environment and audit teams. For instance, the corporate environment needs to take a closer look on the relationship between social media posts and financial statement lines—FS lines (accounting variables), so marketing teams are able to create a strategy in order to affect specific FS lines. Moreover, auditing teams, when they execute substantive analytical procedures, can create better expectations for marketing expenses in relation with financial statements. Last but not least, accounting and auditing teams will be able to create a better rational cost allocation among cost of sales, administrative expenses, development expenses and distribution expenses.
This study has certain limitations. This paper focused on finding any correlation between social media posts with general and financial content and specific accounting and auditing factors. We analyzed the findings for a whole fiscal year, 2018, and we chose companies with common traits in a mutual economic environment; in other words, we only chose Greek companies listed on ATHEX. It should be mentioned that we were restricted to 2018, because the following fiscal years, 2019–2021, were affected by COVID-19 or the Russia–Ukraine war. Financial Statements Data or Financial Statements Notes “events after the end of the reporting period”; so, we would be able to have a clear conclusion. Additionally, we did not take into account computer programming languages or skills that would support data analysis.
Considering the sample and time period limitations of specific papers, they can be handled in future studies. It would be interesting for future research to expand the research scope to companies with different characteristics that present different audit opinions in financial reports to be justified any relation with social media efficiently; for example, this study can be expanded on insurance companies, bank institutions or companies under liquidation, as we have excluded those categories from our research. Moreover, because in our research, we chose only Greek companies with statutory financial reports, this study can be expanded on the international level with companies’ statutory financial statements or group financial statements in local and international levels. A topic for following investigations is the use of fundamental or technical analysis ratios in relation with social media posts by analyzing fundamental companies’ ratios and technical charts of stocks in relation with social media posts. Additionally, this study can provide rational results with the effective use of data analysis tools and computer science in new studies.