Determinants Of Voluntary Disclosure Research Articles

The decision to present comparative financial statements in a mandatory IFRS adoption setting

PurposeThis study analyzes the factors behind the decisions made by the largest listed Chilean companies that mandatorily adopted the International Financial Reporting Standards (IFRS) in 2009 to present comparative IFRS financial statements that year. The authors focus on the role of the expected impact of the change in the accounting standards on a company's financial position as a determinant of this decision.Design/methodology/approachThe sample comprises 105 nonfinancial companies, of which 57 decided to present comparative IFRS financial statements (full adoption) and 48 did not (proforma adoption). Logistic regression is employed to model the decision of interest.FindingsThe decision for full adoption is positively associated with the company's expectation that the change in the accounting standards would improve its financial position, albeit only up to a certain threshold, as evidenced by their inverse U-shaped association.Originality/valueIFRS adoption in Chile creates a unique scenario that allows us to contribute to the literature on the determinants of voluntary disclosure by focusing on a specific case in which the decision to disclose comparative financial statements is associated with mandatory IFRS adoption. The present study provides evidence that opportunistic behavior influences this decision.

Audit Committee Chair Monitoring Incentives to Use Voluntary Disclosure in the Audit Committee Report Under High Agency Conflicts

This study evaluates whether an association exists between the agency incentives of the audit committee chair and voluntary disclosure of their monitoring activities in their audit committee report. Prior research suggests that a shift toward greater voluntary disclosure in the audit committee report occurred following the passage of the Sarbanes–Oxley Act but does not directly address the determinants of voluntary disclosure. Consistent with agency theory, audit committee chairs signal their duty-specific monitoring activities to shareholders, possibly to protect their reputation and justify their compensation. Within a high-litigation industry, this study provides evidence that audit committee chairs with a greater reputation level (i.e., more public company directorships) provide more concise duty-specific voluntary disclosure when serving companies with high levels of agency conflicts. This provides evidence consistent with efficiency in the market for audit committee chairs. This study also provides evidence that audit committee chairs respond to likely shareholder concerns by providing more concise duty-specific voluntary disclosure when their company has previously restated its financials. Finally, audit committee chairs provide increased voluntary disclosure specifically related to external audit oversight when high agency conflicts exist. As a whole, this contributes to the existing audit committee literature by providing evidence that voluntary disclosure incentives for financial reporting are also important determinants of more qualitative compliance-based reporting in the proxy statement. This has implications for accounting and governance practitioners as voluntary audit committee report disclosure offers shareholders detailed information that they may use in evaluating audit committee monitoring performance.

Corporate Voluntary Disclosures in Emerging Markets: Empirical Evidence From the GCC Equity Markets

In their path of searching for additional sources of information for better-informed decision-making process, market participants are presented with Voluntary disclosures. This paper aims at examining the determinants of voluntary disclosures in the GCC countries. A cross-sectional multiple regression analysis with a sample size of 74 listed firms from the GCC equity markets shows that leverage and economic sectors dominated mainly by “Real Estate” and “Services/Insurance”, have statistically significant impact on voluntary disclosure. A remarkable finding of this paper indicates that the profitability variable measured in terms of return on equity (ROE) significantly explains the variation in the voluntary disclosure score in all sectors except for the “Services/Insurance” one.

Impact of Efficiency on Voluntary Disclosure of Non-Banking Financial Company—Microfinance Institutions in India

This paper investigates how the financial and social efficiency of firms influence the extent of the voluntary disclosure of Non-Banking Financial Companies–Micro Financial Institutions (NBFC-MFI). The study constructed an unweighted index of voluntary disclosure to estimate the level of voluntary disclosure of all of the included firms from the years 2015–2019. The financial and social efficiency, which is analogous to the technical efficiency of production theory and analyses both sustainability and outreach, respectively, was estimated using data envelopment analysis (DEA). The panel data analysis was completed, and a positive association of financial efficiency was estimated. The social efficiency was found to have no relationship to the voluntary disclosure level. This paper contributed to the literature by providing new determinants of voluntary disclosure. The study examines the econometric model and suggests that financially sustainable firms that utilize these resources well are more open to outsiders, while socially efficient firms are reluctant to voluntary disclosure, which also includes social activities, and consider this as a wasteful activity. The findings of this study are relevant to industry practitioners and regulators, who need to think upon the sustainability of this crucial sector by meeting the dual objectives of financial and social performance. This study is helpful to all stakeholders as well as for the government, who can use the results to design additional rules for the NBFC–MFI. This study will also help firms to design disclosure strategies to ascertain goodwill and less cost of capital, with easy access to funds.

Efek Moderasi Size dalam Pengungkapan Sukarela: Bukti Empiris di Bursa Efek Indonesia

The purpose of this study is to analyze the determinants of voluntary disclosure (VD) by using three non-interaction models and one interaction model. This paper observes four VD’s determinants (ownership dispersion, managerial ownership, audit committee, and independent commissioners), one control variable (capital structure), and one moderating variable (total asset). By using panel data analysis (225 observations) on the Indonesia Stock Exchange (IDX), it is found that the total asset can be used as the moderating variable in explaining the determinants of VD in IDX. Furthermore, the interaction model shows better results than non-interaction models. Managerial ownership, independent commissioners, and ownership dispersion show high consistency with the tested hypotheses. This is different from the audit committee which does not support the hypothesis. These findings implicate managerial policies that need to consider good corporate governance in supporting the voluntary disclosure of public companies in Indonesia. Strengthening external validity in the form of replication, developing research models, and refining research methods is needed to strengthen the managerial implications. Testing the robustness by simulating various substitute proxies to optimize the generalization of research findings needs to be considered in future studies.

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Industry Characteristics And Voluntary Disclosure In Private Mining And Manufacturing Firms In Tanzania

Disclosure of corporate information forms an integral part of the corporate governance framework and lies at the center of most of the corporate governance codes, principles and reports around the world given its indispensable contribution to market and firm performance. Unfortunately, corporate disclosure is not a central aspect of corporate governance in Tanzania. It is noted that the lack of adequate voluntary corporate disclosure is one of the biggest challenges facing the implementation of effective corporate governance in Tanzania. In turn, lack of sound corporate governance has fueled corruption and cronyism while suppressing sound and sustainable economic decisions. To address this major problem, this paper investigates the determinants of voluntary disclosure in 107 private Tanzanian mining and manufacturing firms. This study uses a longitudinal approach as variation across firms and over time. To this end, 2011–2015 is selected for the longitudinal analysis. Annual reports of 107 private firms was used to collect data in relation to ownership structures, financial performance and firm size. This data was analyzed using a random effects Generalized Least Squares (GLS) model with Mundlak (1978) corrections. Our results show that ownership structures are associated with voluntary disclosure. Specifically, ownership concentration is negatively associated with voluntary disclosure in mining companies while it is positively associated in manufacturing firms. Foreign ownership is positively associated with voluntary disclosure for both mining and manufacturing firms. Further, the results reveal that financial performance is associated with voluntary disclosure where leverage is positively related to voluntary disclosure in mining and manufacturing firms while liquidity is significantly associated with voluntary disclosure in mining companies only. Our results also show that mining companies disclose 3.2% more information than manufacturing firms. Relevant policies to promote voluntary disclosure should be directed at facilitating foreign direct investment and leverage. These policies include developing impartial court systems, development of infrastructure, provision of quality education, tax holidays and tax credit. It is recommended that loan guarantee provided by public financial institutions can be used to reduce risk. In addition, foreign exchange liquidity facilities can reduce risk associated with borrowing money in different currencies.

Information Disclosure and its Determinants on Lithuanian Companies Websites: Quantitative Approach

The purpose of the article is to measure the extent of voluntary disclosure on the websites of Lithuanian companies and to investigate whether there is significant association between theoretically possible determinants of voluntary disclosure and the extent of voluntary financial and non – financial information disclosure on companies’ websites. Methods of research: comparative analysis of scientific literature, logical, systematic analysis, content analysis using scope and quantity index approaches, correlation analysis using Spearman’s rank correlation coefficient. Results showed statistically significant connection between a company's size (as determined by its earnings) and the company's disclosure index of voluntary information. The companies with more earnings are inclined to provide a wider scope of information and a larger volume of information by word count. There is no determined connection between the number of employees and the word quantity index. This research adds to the samples of previous studies, analyses disclosure of financial and non-financial information on companies’ websites.DOI: http://dx.doi.org/10.5755/j01.ee.29.4.17271

Succinct Survey of Financial and Nonfinancial Disclosure Quality: Definition, Classification and Analysis

This paper mainly introduces different measures of disclosure quality, pivotal to know what the quality is, what the characteristics of good information quality are and how prior studies measure disclosure quality as to choose the suitable and appropriate approach sheathing for your research. Besides, because different measures have different strengths and weaknesses, and merits and flaws, thus, this paper can let us latch strengths and weaknesses of each approach in order to mitigate these weaknesses. Disclosures can be classified as any deliberate corporate release of financial or nonfinancial, quantitative or qualitative, mandatory or voluntary, formal or informal information. There are different forms of corporate to disclose information to the gullible public, including conference calls, annual or quarterly reports, investor relations, prospectus, press release, management interview and websites (Gibbins, Richardson and Waterhouse, 1990). The annual report is considered as a dominant document in the capital market (Botosan and Plumlee, 2002). A large voluminous prior studies investigate the corporate disclosure issues via annual reports (e.g. Wallace, Naser and Mora, 1994; Meek, Roberts and Gray, 1995; Inchausti, 1997; Botosan, 1997; Ahmed and Courtis, 1999; Depoers, 2000; Hail, 2002; Botosan and Plumlee, 2002; Hope, 2003a; Hope, 2003b; Coy and Dixon, 2004; Abd-Elsalam and Weetman, 2007). For instance, Coy and Dixon (2004) investigate the change in disclosure quality of the annual reports of the New Zealand universities during the period of 1985–2000. Abdelsalam and Weetman (2007) delve deeper in the matter of the annual reports of Egyptian listed companies in the period of 1991–1992 and 1995–1996. However, conference calls and quarterly reports are oft than not considered as more timely disclosures by corporate. Disclosure literature can investigate wide range “hither and thither” issues: determinants of voluntary disclosures, determinants of compliance with and cleavage unto laws, rules and regulations, the use of accounting information by analysts, and the economic repercussions of different types of disclosures (e.g. Botosan, 1997; Sengupta, 1998; Botosan and Plumlee, 2002; Easley, Hvidkjaer, and O’Hara, 2002, 2004; Francis, LaFond, Olsson, and Schipper, 2005). In certain extent, most of these studies must measure the disclosure quality to perform the research. Prior studies offer different measures or proxies such as index, ratings, readability, intricate textual analysis and uses of proxies for disclosure quality. Disclosure quality can be defined in terms of the precision of a Bayesian investor’s beliefs about the firm value after receiving the disclosure (e.g., Diamond and Verrecchia, 1991). As preparers’ perspectives, some studies define the disclosure quality based on the degree of preparer interested bias in disclosures as King (1996) concludes that preparers likely report veridicus information to vamp up their reputation in sophisticated and gauche general users’ perception. Other studies define the disclosure quality based on readers or users’ degree of understanding the contents (Hopkins, 1996). For example, Hopkins (1996) vindicates that different thoroughfares to prepare information would affect the unwary users’ knowledge of accessing and using such information. Therefore, it is relatively difficult for researchers to directly measure the quality for narratives as they are context-sensitive and personal-subjective in most of the cases. This section is to provide a salutary review and carefully but not pedantically discuss different measures of disclosure quality so that it can also provide new insights for future research to measure the CSR disclosure quality.

A cross-cultural perspective of voluntary disclosure: Italian listed firms in the stakeholder global context

Through this paper, we empirically studied the presence, evolution, and determinants of voluntary disclosure with reference to the Italian Stock Exchange context in a multi-stakeholder approach. In particular, we identified eight stakeholders: customers, suppliers, competitors, institutions, community, environment, human capital and corporate governance, and financial lenders. For each one, we verified its disclosure in the following years: 2006, 2009, and 2012. As far as the presence and evolution of disclosure, our results show that there has been indeed an increase of disclosure, especially during the period 2009-2012. But it is still far from the level required by international organisations (Guidelines of the Global Reporting Initiative; Guidelines for ESG approved by the European Federation of Financial Analysts Societies; Guidelines developed as part of the CSR-SC project, prepared by the Italian Ministry of Labour and Social Policy). With reference to the determinants, we applied a mixed logit model for generalised binomial random variables that allowed us to see that the only variable that positively affects the disclosure of each stakeholder is the firm size.

A cross-cultural perspective of voluntary disclosure: Italian listed firms in the stakeholder global context

Through this paper, we empirically studied the presence, evolution, and determinants of voluntary disclosure with reference to the Italian Stock Exchange context in a multi-stakeholder approach. In particular, we identified eight stakeholders: customers, suppliers, competitors, institutions, community, environment, human capital and corporate governance, and financial lenders. For each one, we verified its disclosure in the following years: 2006, 2009, and 2012. As far as the presence and evolution of disclosure, our results show that there has been indeed an increase of disclosure, especially during the period 2009-2012. But it is still far from the level required by international organisations (Guidelines of the Global Reporting Initiative; Guidelines for ESG approved by the European Federation of Financial Analysts Societies; Guidelines developed as part of the CSR-SC project, prepared by the Italian Ministry of Labour and Social Policy). With reference to the determinants, we applied a mixed logit model for generalised binomial random variables that allowed us to see that the only variable that positively affects the disclosure of each stakeholder is the firm size.

Commercial Banks’ Attributes and Annual Voluntary Disclosure: The case of Libya

AbstractThis study aims to investigateempirically whether there is any significant association between seven commercial bank-specific attributes (i.e. age of bank, size of bank, bank liquidity position, profitability, government ownership, foreign ownership, and listing status) and the extent of voluntary disclosure in the annual reports. Ordinary Least Squares (OLS) regression model is used to test the association between bank attributes and voluntary disclosure. The results of regression analysis indicate that banks size and listing status are significantly associated with the level of voluntary information disclosures. The findings also revealed the extent of voluntary disclosure in annual reports is notsignificantly influenced by other bank’s attributes.The current empirical study contributes to that investigation in the context of banking companies andprovides new insight into determinants of voluntary disclosure in the annual reports of listed and unlisted commercial banks.Keywords: Commercial Bank Attributes; Voluntary Disclosure;Annual reports; Libya

Determinants of the extent of forward looking information: Evidence from UK before financial crisis

The study aims to propose a multi-theoretical framework based on information asymmetry and institutional theories by focusing on the OFR regulation changing period from 2004-2006. We carry out an empirical investigation to detect the extent of forward-looking information for a sample of 690 UK non-financial firm-year observations which are drawn from the top 500 UK. We show that the extent of voluntary disclosure of Forward Looking (FL) information is positively and significantly associated with growth opportunities, leadership, audit committee, competition rate, corporate size, and cross-listing. However, the extent of FL information is negatively and significantly associated with blockholders. This paper applies a multi-theoretical lens based on information asymmetry and institutional theories are employed in order to identify potential new determinants of voluntary disclosure in regards to forward-looking information in the UK context.

The determinants of voluntary disclosure in Saudi Arabia: an empirical study

Our study has three objectives. The first is to determine the voluntary disclosure level in Saudi Arabia. The second is to compare this level with that of some other Arab countries. The third is to identify the main drivers of voluntary disclosure in Saudi Arabia. We use a 54-item disclosure checklist and apply the regression and content analyses to examine a sample of 361 firm-year observations of firms listed on Saudi Stock Exchange during 2007-2011. We find the voluntary disclosure average is 18.38% and that the firm size, age, profitability, auditor specialisation, family ownership, and industry type positively affect voluntary disclosure. We find, however, a negative relation between firm leverage and voluntary disclosure. Our analysis also shows that board independence, Big4 and state ownership have no impact on voluntary disclosure. Our findings should be of interest to the regulating bodies, accounting standards' setters, auditors and managers.

The Determinants of Voluntary Disclosures in R&D Alliances

We examine R&D alliance signaling through the lens of voluntary disclosures. Voluntary disclosure occurs when a firm reveals more information than that which is legally mandated and provides extern...

Technological and innovation disclosure: determinants for Tunisian companies

This study aims to identify determinants of voluntary disclosure about innovation and technology (I&T) by using a theoretical framework of the signal theory and the proprietary costs theory. The analyses are concerned with the Tunisian context where the conceptual framework motivates firms to communicate about their innovation efforts and their technological choices which are generally viewed as competitively sensitive and proprietary in nature. This paper incorporates a new I&T disclosure index to examine factors enhancing and against I&T disclosure. It applies a multiple regression analysis using panel data and content analysis of the annual reports of 18 Tunisian listed firms over the period 1997 to 2007. The findings indicate that companies with more significant growth potential and more uncertainty of their future earnings disclose less information on their innovation efforts and technological choices. Results indicate also that the level of I&T disclosures is reduced when entry barriers are relatively high.

Determinants of Voluntary Disclosure of Internal Control Weaknesses in Tunisia

The main objective of this research is to examine the determinants which can push the auditors to reveal the weaknesses of the internal control system in companies listed on the Stock Exchange Securities of Tunisia. We are particularly interested in determinants related to corporate governance, ownership structure and some company characteristics. The conceptual framework referred to this work is the agency theory. We concluded from the results of the logistic regression model that the probability of disclosure of internal control weaknesses was not significantly associated with corporate governance and ownership structure. However, some other company characteristics, e.g. the size are strongly related with probability of firms disclosing internal control weaknesses.

Corporate Governance Mechanisms, Financial Risk, Industry Sector and Human Capital Investment as Determinants of Voluntary Disclosure of Intellectual Capital in UK Listed Firms

This research examines investment in human capital, financial risk, industry sector and corporate governance mechanisms as determinants of the voluntary disclosure of intellectual capital in a sample of 443 UK listed company annual reports for the year 2003/2004. This year precedes 2005 and the adoption of International Accounting Standards by European Union Member States thus providing the context for the study under reduced mandatory regulation. Voluntary disclosure is measured by an index based on intellectual capital attributes disclosed in the narratives and illustrations of the annual reports. The benefits of signalling intellectual capital are expected to outweigh proprietary costs due to these disclosures. These costs may be more prevalent in innovative and technological companies. Corporate governance mechanisms enhance voluntary disclosure and reduce information symmetry more specifically in those companies found to have higher levels of intangible assets in their resource base. The results suggest that companies associated with reduced financial risk and accompanied by growth are characterised with higher levels of voluntary disclosure of intellectual capital. Voluntary disclosure of intellectual capital is enhanced when large companies operating in high-tech and innovative industries are characterised by investments in human capital. The results suggest that companies that are able to maintain adequate governance systems through segregation of executive and non-executive duties and to a less extent through the presence of experienced non-executive directors exhibit higher levels of voluntary disclosure.

On the Determinants of Voluntary Disclosure by Indian Companies

In the current scenario of financial reporting regime, investors are increasingly looking at the disclosure practices of companies. The companies also face capital market pressures and need to disclose more than the regulatory norms. There could be several motivations for the companies to disclose more information voluntarily. This article explores the factors that determine the voluntary disclosure choices of the non-financial companies listed in the National Stock Exchange (NSE). The study uses a voluntary disclosure index (VDI) constructed by the authors with 81 financial and non-financial items across different categories such as strategy, forward looking, environment and social, etc. With the VDI, this study measures the voluntary disclosure levels for four financial years from 2009–2010 to 2012–2013 using the content analysis methodology. The study uses a panel data model to analyse the effects of three categories of variables, namely, firm characteristics, profitability and governance and found the fixed effect model to be suitable and leverage, size and institutional ownership emerged as the determinants of voluntary disclosures. The article is one of the first studies to use longitudinal data and a disclosure index specific to the Indian context.

Determinants of Voluntary Disclosure: A Study in the Brazilian Banking Sector

Disclosure theory assumes the wide availability of information to users, increasing the level of corporate transparency and reducing information asymmetry common to the business environment. This research aims to investigate the factors influencing the level of voluntary disclosure by companies in the Brazilian banking sector. Corporate reputation (REP), firm size (TAM), performance (DES), and internationalization (ADR) were the variables used as factors influencing the level of disclosure. The sample was composed of the 100 largest Brazilian banks in relation to total assets in 2012. The methodology technique used multiple linear regression. The evidence revealed that the corporate reputation and the size of the companies had a significant and positive relationship with the level of voluntary disclosure. In this sense, the larger the company and higher the standard of corporate reputation, the higher the level of corporate disclosure. Performance and internationalization were not statistically significant.