Abstract
This study aims to examine the impact of some bank characteristics (age, size, profitability and leverage) on the extent of voluntary disclosure in annual reports of listed banks in Borsa Istanbul. All (13) listed banks represent the sample of the study. The study adopted the deductive approach by developing hypotheses based on the relevant theories and results of prior studies. The study also applied the panel data strategy to analyze the collected data from annual reports across five years (2013-2017). The results indicated that there is a positive relationship between each bank characteristic (age, size, profitability and leverage) and the level of voluntary disclosure. The results also show that profitability has a big impact on the level of voluntary disclosure followed by leverage, whereas, age and size have a small effect.
Highlights
As a result of financial scandals and crises, firms have been asked for a higher level of disclosure and transparency
Voluntary disclosure refers to the additional information in the annual reports presented by firms that exceeding the mandatory disclosure (Hasan & Hosain, 2015)
Most studies on voluntary disclosure have been undertaken in developed countries
Summary
As a result of financial scandals and crises, firms have been asked for a higher level of disclosure and transparency. Transparency will increase by disclosing more voluntary information in the annual reports. Voluntary disclosure refers to the additional information in the annual reports presented by firms that exceeding the mandatory disclosure (Hasan & Hosain, 2015). Voluntary disclosure is needed to mitigate the conflict of interests between management and shareholders. Asymmetry and opportunistic behaviors will decrease, as well as managers will not be able to hold important information for their interest. With the increase of globalization in the world’s financial markets in recent years, voluntary disclosure has gotten much attention in the accounting literature. There are several theories that attempted to interpret the practices of voluntary disclosure, including agency theory, capital need theory, signaling theory and legitimacy theory (Shehata, 2014)
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