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Abstract Based on the strategic choice theory, this study constructs a relationship model between the MD&A tone and enterprise deviance. Within the theoretical framework, the study introduces the external audit quality and the consistency between annual report tone and financial information to analyze their different effects. On this basis, China’s A-share non-financial listed enterprises from 2009 to 2018 are selected as the sample for statistical test. The results show that the positive tone of management can significantly predict the future strategic deviance of enterprises, and the abnormal positive tone has become a method to cover up specific strategic behavior. External audit quality significantly strengthens the predictive effect of positive tone on enterprise’s future strategic deviance, but also accelerates the relationship between abnormal positive tone and enterprise’s future strategy. The consistency between annual report tone and financial information enhances the nonlinear relationship between MD&A tone and enterprise future strategic deviance. The internal mechanism analysis shows that the information content in the management tone determines its effectiveness in predicting the future strategy of the enterprise.
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Received: 19 November 2021
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