We investigate the joint effect of managers’ self-inclusive language (SIL) and performance news on investors’ reactions to accounting disclosures. We identify two types of SIL: individual SIL, which includes first-person singular pronouns (e.g., I, me) and collective SIL, which includes first-person plural pronouns (e.g., we, us). When performance news is negative, individual SIL implies that a manager is claiming sole responsibility for the unfavorable event whereas collective SIL and SEL diffuse responsibility. Therefore, we predict higher perceptions of manager credibility for individual SIL relative to collective SIL or self-exclusive language (SEL) when performance news is negative, which, in turn, increase investment judgments. We use a between-subjects experiment to test our predictions. Results show higher perceptions of manager credibility and higher investment judgments for individual SIL relative to collective SIL or SEL when performance news is negative. Results of a maximum likelihood estimation suggest that perceptions of manager credibility mediate the effect of individual SIL on investment judgments, supporting the notion that individual SIL exerts an indirect effect on investment judgments. We supplement experimental evidence with an analysis of managers’ SIL in a large sample of earnings conference calls. We document a positive (negative) market reaction to individual (collective) SIL when performance news is negative, consistent with our Hypothesis. We also find a positive market reaction to individual SIL when news is positive. Overall, our study offers multi-method evidence of the impact of a subtle and easily overlooked component of managers’ language on investors’ judgments.

We examine how disclosure delivery mode—oral versus written—influences investors' reactions to managers' tone language. We hypothesize that listening to disclosures, relative to reading them, causes managers' qualitative word choices to have a greater impact on investors' judgments. We theorize that this effect occurs because oral delivery mode promotes heuristic processing and qualitative tone language is an easy‐to‐process disclosure element. The results from an experiment in a conference call setting are consistent with our hypothesis and suggest a boundary condition. Specifically, the interaction of mode and tone language is significant in a setting where heuristic processing is likely (good earnings news) but not in a setting where investors are likely to scrutinize the disclosure (bad earnings news). Our results inform investors about the potential consequences of how they consume disclosures. Specifically, we show that investors are more susceptible to managers' tone language when listening to disclosures containing good news than when reading them.