Financial Accounting Disclosures and Investors’ Sentiments: Perspective from UAE

This chapter aims to critically review the existing theoretical and empirical literature on financial accounting disclosures, investors’ reactions toward bad financial news, and the moderating effect of the individual investor’s sentiments (particularly the termination of loss-making projects, fluctuation of share price, and firm’s image) in project-based organizations (PBOs). To achieve this, the authors have reviewed extensive research work from reputed and highly cited databases across developed and developing countries, particularly focusing on the UAE. Based on the reviewed literature, it is concluded that there is a solid connection between intention and behavior reaction in a manner that enlarges the possibility of the action to be performed. However, investors’ perception of bad financial news has not been empirically examined to date through various information channels. Hence, further investigation is required to determine investors’ reactions toward bad news using the dimensions determined in previous reviews.