Level Of Voluntary Disclosure Research Articles

Good corporate governance practices and voluntary disclosure in companies listed in the Indonesia Sharia Stock Index (ISSI)

Objectives: This study aims to determine the effect of the size of the board of commissioners, the proportion of independent commissioners, family ownership, and audit quality on the level of voluntary disclosure of the company. Design/methodology/approach: An empirical study of 50 companies listed in the Indonesia Sharia Stock Index (ISSI) is conducted using the 2015-2016 annual report. The type of data used is secondary data. The analytical method used in this study is multiple linear regression analysis with SPSS 21. Findings: The results of statistical tests indicate that the size of the board of commissioners and audit quality have a positive and significant effect on the level of voluntary disclosure, while the proportion of independent commissioners and family ownership has no significant effect on the level of voluntary disclosure. Implications: The main implications of the results of this study are the size of the board of commissioners and the audit quality. The size of the board of commissioners has a strong relationship to the level of voluntary disclosure. There is a relationship between the number of the board of commissioners and the national laws that have an impact on monitoring the transparency process and the effectiveness of communication within the company. For audit quality, companies that use Big Four audit firms have an effect on the level of voluntary disclosure since their financial reporting will result in better audit quality with a high level of independence. The results of this study also support that agency theory is able to partially explain the phenomenon of the relationship between corporate governance practices and the level of voluntary disclosure in companies listed in ISSI. Originality/Value: This research is one of the studies that draw a relationship between the size of the board of commissioners and audit quality on the level of voluntary disclosure of companies in Indonesia. This finding provides confidence that the size of the board of commissioners and audit quality complement each other to improve the quality of voluntary disclosure.

Relationship between Company Characteristics and HR Disclosure Level: Evidences from Indian Public Sector Companies

The main purpose of the study is to examine the effect of company characteristics on Human Resource (HR) disclosure practices of listed public sector companies in India. The present study has taken into consideration 71 Indian public sector companies listed on NSE-500 Index. To measure the level of voluntary disclosure of listed public sector companies in India, the Human Resource Disclosure Index (HRDI) is created. It consists of 90 items. The data of HR disclosure score are collected through content analysis of annual reports of selected sample companies. The study was conducted over a period from 2012–2013 to 2017–2018. The data are analysed through descriptive statistics, correlation, Ordinary Least Square (OLS) regression model and Kruskal–Wallis test. The results of the study demonstrate that market capitalization, ownership concentration, type of auditor, pages of an annual report and return on total assets significantly influence the HRDI of Indian public sector corporations. On the other hand, debt–equity ratio, net fixed assets, net sales, company age, EPS, return on equity, current ratio, profit after tax and listing status are insignificantly associated with HRDI of listed public sector companies in India. Further, it has been observed that the HR disclosure practices varied with various industrial sectors. The present study contributes to the existing studies. HRDI used in the study would be used by businesses as a yardstick to strengthen their HR disclosure in future. JEL Codes: M14, M41, M48, O15

The JOBS Act, underwriting costs, and voluntary disclosure

AbstractThe 2012 Jumpstart Our Business Startups Act (JOBS Act) was enacted to enable emerging growth companies (EGCs) to raise capital without facing vigorous regulations. We investigate whether underwriting fees and indirect costs of initial public offerings (IPOs) change after the passage of the JOBS Act. Unlike recent studies that investigate the impact of post‐IPO voluntary disclosure, we investigate the role of the pre‐IPO voluntary disclosure of use‐of‐proceeds for EGCs. Using a sample of 492 IPOs from April 5, 2009 to April 5, 2015, we find that after the adoption of the JOBS Act, IPOs’ indirect costs increase while the underwriting commissions decrease and that the effects of the JOBS Act on IPOs’ indirect costs and underwriting commissions are weaker for firms that have a high level of voluntary disclosure of use‐of‐proceeds. Results suggest that the optimal level of voluntary disclosures within the mandatory framework benefit EGCs and their investors and have policy, practice, and educational implications.

Measuring the Level of Voluntary Disclosure of Information in the Published Annual Financial Reports of Iraqi Banks

The accounting profession has witnessed a qualitative transformation in the last three decades in light of scientific and technical developments, So that it has become an integrated and comprehensive information system that serves all activities and businesses in various sectors, This is where the accounting disclosure has become an essential and effective means in the media and reporting of the outputs of the accounting system and their delivery to all users in the administration, investors and stakeholders, In a way that enhances their ability to make appropriate decisions, to the qualitative transformation that has occurred in the accounting profession, In exchange for the mandatory disclosure concerned with providing the minimum amount of accounting information as determined by the legal frameworks and professional standards, The voluntary disclosure has emerged as a trend that some banks take to disclose the largest amount of information that goes beyond the limits of what they are obligated to do in order to serve the users of financial statements, This, in turn, drew the researchers' attention to conduct many studies and researches concerned with measuring the level of voluntary disclosure in banks. And its role in serving and achieving its strategic objectives, And its role in serving and achieving its strategic objectives, and the problem of the current research is to measure the level of voluntary disclosure of information in the published annual financial reports of Iraqi banks listed on the Iraq Stock Exchange, This is done by developing a tool to measure the level of voluntary disclosure of information in the published annual financial reports In addition, the results of the study showed that the voluntary disclosure of public information about banks comes in first place with a rate of (84.6%). This is followed by management discussions and analysis of business data (83.8%), And then internal control and audits (81.9%). The study recommended the necessity of continuing to raise the level of voluntary disclosure in Iraqi banks, The necessity of increasing attention to the optional disclosure by the Iraqi Securities Commission and the scientific, professional and academic organizations and societies, This is to ensure that users of financial reports have access to additional financial and non-financial information, which helps them to make rational investment decisions.

Is Voluntary Disclosure Value Relevant? Evidence from Top Listed Firms in India

In view of ongoing reforms in India with emphasis on improving transparency of corporate, the present study aims to examine the influence of voluntary disclosure on the market value of India’s top-listed firms. To this end, the study uses a sample of top 100 non-financial and non-utility firms listed at Bombay Stock Exchange based on market capitalization over a 5-year period (2014–2018). To control potential endogeneity in the relationship between voluntary disclosure and firms’ market valuation, fixed effect panel data model and two-stage least squares model of estimation have been employed. The result obtained from the analysis suggests that enhanced level of voluntary disclosure significantly improves the market value of sample firms. The study further undertakes additional analysis by categorizing voluntary disclosure into its sub-components wherein the findings reveal that three components of voluntary disclosure such as corporate and strategic disclosure, forward looking disclosure and corporate governance disclosure make positive contribution towards market value of firms, while the remaining components of voluntary disclosure such as human and intellectual capital disclosure and financial and capital market disclosure do not appear to have any significant influence on the same. Overall, the finding suggests that voluntary disclosure made by sample firms is considered relevant by investors. However, value relevance of different components of voluntary disclosure varies with the nature and extent of information disclosed. The study offers some important policy implications.

Executive Extraversion and Voluntary Disclosure: Evidence from Management Earnings Forecasts

This study examines whether and how the extraversion of a firm’s key executives influences its provision and the properties of management earnings forecasts. We provide evidence that firms with extraverted chief financial officers (CFOs) are more likely to have a greater level of voluntary disclosure. Specifically, we find that firms with extraverted CFOs tend to issue more earnings forecasts, forecasts with greater level of disaggregation, and forecasts accompanied by an internal attribution. However, we also find that the earnings forecasts issued by extraverted CFOs tend to be less timely and exhibit larger forecast errors. In contrast, we find no evidence that the extraversion of chief executive officers (CEOs) plays a significant role in either the provision or the properties of earnings forecasts. Further analysis suggests that after controlling for earnings forecast surprises, investors tend to react more strongly to earnings forecasts issued by extraverted CFOs. Collectively, our results suggest that the higher level of earnings forecasts associated with CFO extraversion is likely to result from the personality of the CFOs.

Corporate Governance and Voluntary Disclosure Practices in Czech Republic

The decision to disclose enough information in annual reports is seen as an act of transparency. This study seeks to measure the extent of voluntary disclosure and to examine the relationship between corporate governance determinants and the level of voluntary disclosure. The study reports an average of 51.5% as the level of voluntary disclosure. Four corporate governance variables are used as the basis for the regression analysis. The evidence shows a positive association between the level of voluntary disclosure and the proportion of independent directors, block holder and the proportion of the audit committee with only the proportion of audit committee to the board showing statistical significance. The board size has a negative association. The category of corporate governance information items as part of the total voluntary checklist is largely disclosed among Czech firms. The study contributes to the literature on voluntary disclosure in a transition economy. The findings prove useful to investors and financial statement preparers as the knowledge informs them to question and request more information from the firms which are open to the capital market.

Internal control quality and voluntary disclosure: does CEO duality matter?

PurposeThe authors examine the association between internal control quality (ICQ) and voluntary disclosure and test whether chief executive officer (CEO) duality, as a proxy for CEO structural power, moderates such a relationship in an emerging market (Egypt).Design/methodology/approachICQ is measured using a survey of external auditors, while a content analysis approach is used to measure the level of voluntary disclosure in annual reports.FindingsBased on a sample of 512 firm-year observations over the period of 2007–2014, the authors document that ICQ is positively and significantly associated with voluntary disclosure, suggesting that better controls improve corporate reporting policy. In addition, CEO duality moderates the association between ICQ and voluntary disclosure since this positive relationship association becomes insignificant for companies characterised by CEO duality. These results remain stable after controlling for endogeneity (self-selection problem), political instability and industry characteristics.Research limitations/implicationsThe findings of the study provide preliminary evidence on the association between ICQ and voluntary disclosure, and how CEO structural power may affect this association. Future empirical investigations may extend this work to cover the relationship between ICQ and other attributes of corporate transparency including earnings quality and accounting conservatism.Practical implicationsThe findings highlight the need for Egyptian regulators to enact new rules obliging firms to communicate information about ICQ or charging auditors to report information about firm's ICQ in their reports. The results also alert policymakers about the adverse effect of combined leadership structure (CEO duality) since it mitigates the positive impact of ICQ on voluntary disclosure.Originality/valueThe authors contribute to internal control literature by exploring the association between ICQ and voluntary disclosure on an emergent unregulated market with respect to internal control disclosure. They also highlight how CEO duality, as a proxy for CEO power, mitigates the beneficial effect of ICQ on corporate reporting policy on the Egyptian stock exchange (EGX).

Impact of external assurance on corporate climate change disclosures: new evidence from Finland

PurposeThe purpose of this research is to examine the impact of external assurance on the level of voluntary corporate climate change disclosures by Finnish firms.Design/methodology/approachThe sample of this study includes 228 firm-year observations over the period 2008–2015 for listed Finnish companies that have issued sustainability reports and responded to the Carbon Disclosure Project (CDP) questionnaire at least once during the sample period. The authors conduct a panel regression analysis to study the afore-mentioned linkage. In addition, the Tobit regression model is also estimated to check the robustness of our findings.FindingsThe findings suggest that assurance has a highly significant positive impact on the level of corporate climate change disclosures even after controlling for the effect of a number of control variables. Moreover, among the control variables, firm size and asset age are found to have significant effect on the extent of carbon emissions disclosure. Furthermore, the additional analysis reveals that the type of assurance providers (accounting firms vs non-accounting firms) and the type of financial auditors (Big4 financial auditors vs non-Big4 financial auditors) do not influence the level of climate change disclosure of assured companies.Research limitations/implicationsThis research is subject to certain limitations. First, the source of the data used in this research is the CDP database which has limitations in that it is a voluntary disclosure process where all the observations collected are self-reported by the responding firms. This may bias the reported findings. Second, our sample includes only listed companies and hence the results might have limited explanatory capacity for unlisted firms.Practical implicationsBy using the results of this research, corporate managers will be able to reduce the information asymmetry between various stakeholders and them through disclosure of accurate, reliable and credible environmental information. Such disclosures will, in turn, allow socially responsible investors to choose eco-friendly investments and will thus enable them to make appropriate investment decisions.Originality/valueResearch on the external assurance-corporate climate change disclosure nexus is scarce. This study addresses this gap in the nonfinancial disclosure assurance literature by demonstrating that external assurance increases the level of voluntary corporate climate change disclosure. Drawing on stakeholder-agency theory, this study views external assurance as a monitoring structure that potentially curbs the monitoring problem between corporate managers and other stakeholders and increases the amount of climate change disclosures making a possible avenue for the reduction of the information asymmetry between them.

Rentabilidade e disclosure voluntário das empresas acionárias brasileiras

Este artigo verificou se a rentabilidade influencia de forma positiva o nível de disclosure voluntário das empresas. Para alcançar o objetivo deste artigo, foi adotado a técnica de Análise de Regressão Linear Múltipla com dados em painel de efeito fixo, de todas as empresas não financeiras da B3, sendo 527 empresas do período de 2010 a 2018 (nove anos), gerando uma amostra inicial total de 4.743 observações. Com base nos resultados do modelo econométrico, constatou-se que quanto maior for a rentabilidade, em média, menor será o nível de disclosure voluntário das empresas listadas na B3, evidência que contraria a hipótese da literatura, que sinaliza uma relação positiva da rentabilidade sobre o disclosure voluntário.

Does exposure to product market competition influence insider trading profitability?

We examine whether and how product market competition affects insider trading profitability. We empirically show that the insiders of firms in highly competitive industries make higher abnormal profits. Our identification strategy includes both a quasi-natural experiment setting and an instrumental variable approach to address endogeneity concerns. We also run an extensive array of robustness checks and find that our baseline results remain substantially unchanged. Our cross-sectional analyses show that insider trading profitability is more pronounced for firms with: a higher level of trade secrecy, a higher level of R&D, a lower level of management voluntary disclosures, less readable 10-K reports and highly tone-ambiguous financial disclosures. We also find that our results are robust to the inclusion of corporate governance mechanisms. Overall, this study is consistent with the theoretical predictions that support the information asymmetry and proprietary cost channels of competition and that increases in competition lead insiders to undertake more rent-seeking activity.

The efect of size on the relationship between control structure and voluntary disclosure in Brazilian companies

This study aims to analyze the influence of size on the relationship between the control structure on the voluntary disclosure policy of the listed companies in B3. To achieve this goal, we created a dependent variable, called "voluntary disclosure level", which corresponds to 38 indicators of information collected manually from the companies' statements and websites. Afterwards, we estimated a balanced panel data regression model with a threshold effect for size in order to identify the relationship between the variables. The results indicated that smaller companies, with a more concentrated control structure, tended to present a higher level of voluntary disclosure. However, for larger companies, the greater the concentration of the control structure, the less evidence of this information. These inferences lead to believe that the largest Brazilian corporations, with more concentrated control, may not be interested in disclosing voluntary information because most of their shareholders enjoy private control benefits.

The Role of Firms’ Life Cycle Stages on Voluntary Disclosure and Cost of Equity Capital in Brazilian Public Companies

We examine the effects of firms’ life cycle stages on voluntary disclosure and the cost of equity capital. We also examine the relationship between the interaction of life cycle stages and voluntary disclosures measures on cost of equity capital. Our sample consists of non-financial Brazilian public companies, covered by analysts between 2008 and 2014, collected from I/B/E/S and Comdinheiro databases. We find that voluntary disclosure level is higher for firms in maturity and growth stages. We also find that firms in introduction and decline life cycle stages show higher implied cost of capital, however declining firms that increase voluntary disclosure reduce their cost of capital. Moreover, mature firms significantly reduce such inherent risk by reporting social and environmental voluntary information. Our results are useful for investors, practitioners, and regulators to the understanding of the incentives of voluntary disclosure practices.

The impact of earnings accounting attributes on the level of voluntary disclosure in the Annual Financial Reports of Jordanian Commercial Banks

The Study aimed to determine the impact of earnings accounting attributes represented by the following variables ( Accrual qulity, Persistence, Predictability, Smoothness, Value Relevance, Timeliness, Conseratism) on the level of voluntary disclosure in the anuual financial reports of Jordanian commercial banks. For the Purpose of the study, the descriptive analytical apporoach was used. The population of the study consisted of Jordanian commercial banks listed on the Amman Stock Exchange (ASE), While the sample of the study consisted of (13) commercial banks, the study data were collected from the annual reports related to the sample of the study during the period (2014-2018). (SPSS) software was used for analyzing data running statistical tests including descriptive statistics ( lowest value, highest value, arithmetic mean, standard deviations) in addition to multiple regression analysis which was used to test the hypotheses of the study. The result of the multiple regression analysis showed relationship between (Conseratism, Value Relevance, Timeliness) and the level of voluntary disclosure, while there was no relationship between (Accrual quilty, Persisten, Predictability, Smoothness) and the level of voluntary disclosure.The study recommended that banks should impose oversight on disclosures and rise awareness of the importance of voluntary disclosure for both high level management and stakeholders.

Voluntary disclosure of listed banks operating in Ghana

Issues of voluntary disclosure have become relevant in Ghana after the Bank of Ghana took steps to rationalised banks in Ghana to strengthen the banking sector. The sudden collapse of some banks in Ghana may have raised some doubts among investors and other stakeholders with regards to the quality of information disclosed by banks in Ghana. It has therefore become important for banks in Ghana to improve the quality of financial information by setting up good governance structures and to provide adequate voluntary information in their annual reports to boost the confidence of investors and other stakeholders. This study examines the extent to which listed banks in Ghana voluntarily disclose information in their annual report for the 2018 period and to determine the differences in the types of information voluntarily disclosed by listed banks in Ghana. This study revealed an overall voluntary disclosure level mean of 0.6294 which was slightly above average. The Tukey post hoc test showed a statistical significant difference between strategic information and non-financial information as well as a statistical significant difference between strategic information and financial information. However, there is no statistical significant difference between non-financial information and financial information. The study concludes that adequate voluntary information must be provided in the annual reports of listed banks in Ghana to ensure transparency, consistency, reliability and comparability to influence the economic decision needs of investors and other users of accounting information.

The impact of board and audit committee characteristics on corporate social responsibility: evidence from the Iranian stock exchange

PurposeThe purpose of this study is to investigate the effect of board and audit committee characteristics on corporate social responsibility (CSR) in Iranian companies listed in stock exchanges.Design/methodology/approachThis is a descriptive-correlational and an applied research. The statistical population of this research is all companies listed in Tehran Stock Exchange and the research period is from 2012 to 2018. Using screening method a sample of 150 companies was selected. Multivariate regression and the software Eviews 10 were used for data analysis and hypothesis testing.FindingsThe results indicated that board size had a significant effect on CSR; board independence had a significant effect on CSR; managerial ownership did not have a significant effect on CSR; CEO duality did not have a significant effect on CSR; audit committee size had a significant effect on CSR; audit committee independence had a significant effect on CSR; and financial expertise of audit committee members had a significant effect on CSR.Originality/valueThe present study is the first research performed on the effect of board and audit committee characteristics on CSR in Iran. The results of this study contribute to the literature on the effect of board and audit committee characteristics on CSR and provide suggestions for capital market participants. CSR helps reduce asymmetric distribution of information among the internal and external organizational entities and reduce agency problems and conflicts among different groups. Based on the results, an effective audit committee as an effective mechanism enhances the credibility of financial and non-financial reporting such as social responsibility, which means that an effective audit committee can improve the level of voluntary disclosure of information through effective oversight of the reporting process. It is also suggested that companies focus on audit committee characteristics to increase the level of CSR.

The Level of Voluntary Disclosure in the Annual Reports of Listed Corporations in Fiji: A Case Study of South Pacific Stock Exchange Listed Corporations

This paper investigates the level of voluntary disclosure by listed Corporations of South Pacific Stock Exchange (SPSE). The major objective of the paper is to contribute towards the literature on level of voluntary disclosure in a developing country context. The focal point of the research was to use the empirical data from the twelve of the 2019 audited listed company annual reports from the SPSE. This research is informed by organizational legitimacy theory. The paper shows that the level of voluntary disclosure in SPSE companies has increased from the previous studies. However, the increase is not substantial. The paper shows that corporations who do not have monopoly power fear about their social contract and disclose more voluntary information in order to legitimize their activity. Corporations with monopoly power do not care about their social contract as they are certain that the society has no choice but to accept them as they are the only one in the market, so they do not legitimize their activity to a great extent. Legitimacy theory holds true for non-monopoly firms and does not hold true for monopoly firms.

Ownership Structure, Board Composition and Voluntary Disclosure by Non-financial Firms Listed in )ASE)

This study aims to examine the impact of ownership structure and board composition on the level of voluntary disclosure by non-financial firms listed in the Amman Stock Exchange (ASE). The study uses panel hand-collected data from 443 annual reports for a 5-year period (2012 – 2016) and employs an OLS-regression to test the study predictions. Compatible with the study predictions and most prior related studies’ findings, both higher managerial ownership and the CEO-duality produce low levels of voluntary disclosure, while foreign ownership is positively associated with the level of voluntary disclosure. Findings also indicate that larger firms deemed to provide higher levels of voluntary disclosures than smaller firms. Besides, companies audited by big4 firms disclose more voluntary information than those audited by others. The study findings have implications for policymakers and regulators. Policymakers and regulators may encourage, emphasize and enforce, if necessary, the regulation that enhances the quality of financial disclosures including the separation between the Chairman of the board of directors and CEO roles to improve the level of control and supervision and enhance the transparency of financial reporting by Jordanian firms.

University foundations: an examination of the extent of their mandatory disclosures on their webpages

PurposeThis paper examines the level of mandatory information disclosed by Spanish university foundations on their websites.Design/methodology/approachA content analysis on the Spanish university foundations' websites is performed based on the mandatory reporting requirements indicated in the Spanish Law 19/2013 on Transparency and Good Governance.FindingsThe results of this paper reveal that the amount of mandatory information disclosed by Spanish university foundations remains low. When compared to the prior empirical research, the authors find remarkable differences in the levels of information disclosure. The level of mandatory disclosures by Spanish university foundations is rather low compared to the voluntary disclosure of information by other NPOs. Meanwhile, such differences are smaller when compared to previous studies focused on mandatory disclosures.Originality/valueThis study contributes to the very limited literature focused on the level of transparency of mandatory information of public foundations. Most of prior empirical research examined the level of voluntary disclosures of corporate or fundraising foundations.

The association between voluntary disclosure in audit committee reports and banks’ earnings management

PurposeThis paper aims to examine the relation between voluntary disclosure (VD) in audit committee reports and banks’ earnings management. It investigates whether such disclosure reflects an attempt by audit committees to engage in impression management.Design/methodology/approachThe study considers top US bank holding companies from 2006 to 2015. The authors develop a scoring grid to measure VD in audit committee reports. The scoring grid is based on recommendations from 10 industry and governance organizations’ reports that analyzed audit committee disclosures. Multivariate regression analyzes are used in this paper.FindingsDescriptive statistics reveal that the level of VD in audit committee reports did not increase significantly from 2006 to 2015. Multivariate analyzes indicate that whenever banks’ level of earnings management is high, audit committees increase the extent of their VDs in their reports. The authors infer from this finding that audit committees are using VDs as a vehicle for impression management.Originality/valueThis paper sheds light onto the motives behind audit committees’ VDs. The evidence, which is consistent with impression management by audit committees in their report, also provides further background to the Securities and Exchange Commission’s recent initiative to enhance VDs in the audit committee report.