Web-Based Financial Reporting: An Interpretative Model for Corporate Communications on Social Media

This paper aims at contributing to financial reporting literature by proposing a conceptual interpretative model to analyse the corporate use of social media for fi- nancial communication purposes. In this perspective, the FIRE model provides a framework to study social media shifting the focus on the distinctive features that might enhance web investor relations. The model highlights these features through four building blocks: (i) firm identity; (ii) information posting (I); (iii) reputation; and (iv) exchange and diffusion. They represent key aspects to explore corporate communication activities and might offer a framework to interpret to what degree corporate web financial reporting exploits the potential of social media. Accordingly, the paper proposes metrics based on this model aimed at capturing the interactivity of corporate com- munications via social media, with a particular focus on web financial reporting. It tries to show the potential of this model by illustrating an exploratory empirical analysis investigating to what extent companies use social media for financial re- porting purposes and whether firms are taking advantage of Twitter distinctive fea- tures of interaction and diffusion.