Mandatory Disclosure Research Articles

Disclosure and corporate governance: Evidence from Russian companies

Purpose: this article aims to provide new evidence on the role of several potential drivers of corporate disclosure that have been insufficiently studied or remain controversial in the literature on accounting and corporate governance such as one-tier vs. two-tier corporate boards, having grey directors on the board, direct vs. indirect government ownership and the ownership stake of second-largest shareholders. Methodology: the study uses rich and unique data on transparency and disclosure by Russian firms collected by the S&P agency from 2002 till 2010 and obtained by the authors under a confidentiality agreement. The analysis is based on conventional techniques of regression analysis for panel data. Findings: there is strong evidence of complementarity between corporate governance and disclosure. In particular, disclosure is enhanced by boards with a higher proportion of truly independent directors (compared to grey directors, whose role is less clear-cut), is higher in companies with a two-tier board and those with a greater stake of the second largest shareholder. It is also found that direct government ownership is associated with reduced disclosure. In contrast, no such effect is observed for indirect ownership by the state. Originality and contribution: the analysis uses detailed data from a country with a relatively poor corporate governance environment in general and low standards of mandatory disclosure, which helps observe relationships that would be hard to detect in better institutional settings. It is also one of the first studies that scrutinizes disclosure practices of publicly traded companies in Russia. The obtained findings emphasize the risks of reduced mandatory disclosure requirements, which Russian government allowed in response to the Western sanctions, on the background of a significant exodus of qualified independent/foreign directors from the corporate boards. Given the complementarity between disclosure and corporate governance, this may amplify the risks of poor corporate governance and performance of Russian firms.

Mandatory Disclosure and Corporate Green Innovation

Mandatory Disclosure and Corporate Green Innovation

Mandatory Carbon Disclosure: Evidence from France

Mandatory Carbon Disclosure: Evidence from France

Mandatory vs. Voluntary Disclosure in the Dynamic Market for Lemons

Mandatory vs. Voluntary Disclosure in the Dynamic Market for Lemons

When Does Mandatory Price Disclosure Lower Prices? Evidence from the German Fuel Market

When Does Mandatory Price Disclosure Lower Prices? Evidence from the German Fuel Market

Managerial overconfidence and corporate information disclosure

By extracting detailed birth information for managers of Chinese listed firms from 2011 to 2021, we developed a novel measure of overconfidence and applied it to the corporate information disclosure. Our findings demonstrated a close association between managerial overconfidence and both mandatory and voluntary disclosure behaviors exhibited by firms. Specifically, managerial overconfidence significantly contributed to an increase in accrual-based earnings management and the voluntary disclosure of Corporate Social Responsibility (CSR) information by firms. Furthermore, we observed that overconfident managers were more inclined to adopt a positive disclosure tone and tend to underestimate future risks in forward-looking information disclosure. In our additional analysis, we uncovered evidence suggesting that various factors, including corporate governance practices, the types of actual controllers, financing constraints, analyst following, and market competition, might all play a role in influencing corporate information disclosure behavior driven by managerial overconfidence. This study expands on the economic implications of the Upper Echelons Theory and offers pertinent recommendations to enhance the quality of information disclosure.

Effects of mandatory climate-related information disclosure on mutual funds

Effects of mandatory climate-related information disclosure on mutual funds

The Effect of Mandatory Climate Risk Disclosure on Environmentally Responsible Investing: Evidence from the U.S. Insurance Industry

The Effect of Mandatory Climate Risk Disclosure on Environmentally Responsible Investing: Evidence from the U.S. Insurance Industry

Reshaping Corporate Boards through Mandatory Gender Diversity Disclosures: Evidence from Canada

Reshaping Corporate Boards through Mandatory Gender Diversity Disclosures: Evidence from Canada

Mandatory Environmental Disclosure and Public Avoidance Behavior

Mandatory Environmental Disclosure and Public Avoidance Behavior

Mandatory Financial Information Disclosure and Credit Ratings

Mandatory Financial Information Disclosure and Credit Ratings

Mandatory Disclosure of Sustainability Versus Voluntary Disclosure in the Iraqi Environment

The research aimed to study the mandatory disclosure of environmental and economic sustainability information by focusing on the usefulness of the information disclosed by economic units, and on the decision-making process. A targeted sample of academics and specialized professionals was taken. To reach the results, a questionnaire was designed according to the five-point Likert scale, consisting of fifteen questions. 125 questionnaire forms were distributed, and 103 valid answers were obtained.

Disclosure of investor relationship activities and stock crash risk: Evidence from private in-house meetings

In July 2012, the Shenzhen Stock Exchange (China) made it mandatory for all listed firms to electronically publish standard summary reports through the exchange's web portal for all investor relationship activities. In this study, we focus on one important type of investor relationship activity—the private in-house meeting—and analyze the relationship between the disclosure of int-house meetings and stock crash risk. Using data collected over the 2009–2017 period and adopting a difference-in-difference approach, we find that mandatory disclosure of in-house meetings is negatively associated with future crash risk and that the effect is stronger in firms with higher information asymmetry. Our results, which remain robust after a number of sensitivity checks, should be of interest to both regulators and policymakers.

Mandatory disclosure of conflicts of interest: Good news or bad news?

Mandatory disclosure of conflicts of interest: Good news or bad news?

Human Capital Disclosure, Business Model and Firm Value: Empirical Evidence from Kenya and South Africa

High volatility and decline in firm value has been spotted for listed companies in Kenya as revealed by large deviations between market-to-book value ratios. This has prompted organisations to adopt integrated reporting to enhance accounting information disclosures that has long been linked with firm value. However, studies examining this form of reporting and its contribution to the value of the company and its variant stakeholders remain scanty in the context of Africa. The purpose of this research is to investigate and demonstrate the relationship amongst human capital disclosure, business model and value of listed companies in Kenya and South Africa. The study was braced on the Stakeholder and legitimacy theories. The research design was both exploratory and confirmatory. Secondary data was collected from 137 purposefully selected companies for the period 2018-2020. An unweighted disclosure index was used to measure human capital disclosure, whilst, firm value was measured using Tobin’s Q ratio. Frequency tables were used for data presentation and descriptive statistics was conducted to summarize and describe the data. Pearson correlation analysis was used in measuring the strength and direction of relationships between variables, while, stepwise regression analysis method was applied in testing for mediation effects. The results depict that human capital disclosure has a statistically significant effect on firm value. However, the effect was negative for Kenya and South Africa revealed a positive effect. Human capital disclosure and business model evinced a positive and significant relationship. Human capital transmitted part of its effect on firm value through the entity business model, with Kenyan listed firms revealing inconsistent mediation, whereas, South African companies reported full/complete mediation. The study recommends mandatory disclosures of human capital and business model aspects of integrated reporting by Kenyan listed companies due to its effect on firm value.

기업의 정보보호 수준과 감사노력과의 관련성에 관한 연구

[Purpose]Recently, the importance of information protection has been emerged with the increasing number of cases of cyber security incidents toward companies. In this study, we examine whether there is relevant implication to the input of additional audit efforts from the auditor’s point of view, whose work includes checking additional efforts invested by companies to improve the level of information protection by linking them with internal control risks. [Methodology]A regression analysis was conducted based on a sample constructed from TS2000 and the information security disclosure portal sites. [Findings]Results of the study show that there is a positive (＋) relationship between the level of information protection (investment amount, manpower) and audit effort (fee, hour). In addition, there is a positive (＋) relationship between information protection investment per person and audit effort, but the higher amount of information protection investment among the amount of technology investment might influence relationship, which reminded us of the need to appropriately consider the size of investment and the size of manpower in information security. [Implications]This study contributes by suggesting that it is possible to study the accounting aspect in the field of information protection and, at the same time, contributes to the expansion of related literature. In addition, by selecting information protection rather than external intrusion (hacking) as a substitute for cyber security, it is differentiated from previous studies by showing that it is possible to identify a relatively small sample to conduct empirical tests. However, since the mandatory information security disclosure system is in its infancy and the sample was selected based on compulsory disclosure and voluntary disclosure, it did not cover the entire industry and various sizes of companies, so care must be taken in interpreting the results.

ESG 생태계와 지속가능성보고서 검증 표준 발전 동향에 관한 연구

The information in the Sustainability Report, covering Environment (E), Social (S), and Governance (G), serves as a crucial reference for stakeholders in the ESG ecosystem, enabling effective decision-making. Consequently, companies bear the responsibility to transparently explain their performance, plans, risks, and opportunities to the capital market. To achieve this, ESG information must adhere to standardized criteria, ensuring comparability across different companies, industries, and nations, and be verifiable by independent third parties.
 Recently, there has been an accelerated global discussion on mandating the disclosure of ESG information. Legal disclosure of ESG information must be grounded in high reliability. When ESG information disclosure activities fall within a legal framework, disclosure actors may be subject to the same level of standardization as business reports. Currently, domestic companies engaging in voluntary assurance will likely require recognized service providers in the future ESG disclosure system.
 This study aimed to derive the qualifications of assurance service providers and propose a quality management approach applicable to the ESG ecosystem. To achieve this, we examined the global ESG ecosystem structure, focusing on the roles and functions of ESG information disclosure standards setters, assurance providers, and evaluators. We also analyzed the characteristics of assurance practices. By researching the qualifications and quality management requirements of assurance providers concerning mandatory ESG information disclosure, we identified the assurance practice standards necessary for improving ESG disclosure quality.
 Assurance service providers should establish business processes in line with global assurance standards and guidance, meeting ethics and quality management standards equivalent to accounting firms. Furthermore, assurance practitioners should possess specified qualifications and practical experience, being recognized for their expertise in the ESG field. The assurance supporting the domestic ESG disclosure mandate should evolve into a public activity open to anyone with suitable qualifications, fostering development.

PENGUNGKAPAN PAJAK DI INDONESIA: SEBUAH CONTENT ANALYSIS

Many countries are starting to require tax disclosure. In Indonesia, the Mandatory Disclosure Rule (MDR) has been announced but has never been implemented. Tax disclosure is expected to be an alternative change to the Mandatory Disclosure Rule (MDR). The purpose of this study is to analyze tax disclosures made by companies in Indonesia. This research was conducted using the content analysis method to classify and measure each of Mgammal's (2019) measurement items more accurately. The results showed that 12 items were fully represented by all company samples, 13 items were presented as company samples and 6 measurement items were not presented at all by company samples. It is hoped that the implementation of tax disclosure measurements carried out in this research can become a basis for compiling relevant tax disclosure items in Indonesia.

Is mandatory disclosure an effective panacea for buyer beware?

Purpose The purpose of this paper is to examine whether mandatory disclosure of information accompanying the sale of real estate achieves its aim of informed purchasers. Design/methodology/approach Using a case study approach focused on mandatory disclosure in South Australia data was collected from interviews and focus groups with key personnel in the property industry involved in the production of information required to fulfil vendors’ disclosure obligations. Findings The authors found that purchasers are ill-served by a long and complex form of mandatory disclosure with a short time frame that prevents the use of the information provided. Without good form design and increased digital affordances provided by the cadastral and conveyancing systems, mandatory disclosure is insufficient to ensure minimisation of information asymmetry between vendor and purchaser. Originality/value To the best of the authors’ knowledge, this is the first Australian qualitative study that examines the utility of mandatory vendor disclosure in real estate sales and the first to consider the impact of the digitalisation of cadastral and conveyancing systems upon the efficacy of mandatory disclosure regimes.

How does Employee Education Affect Employer's Corporate Social Responsibility? Evidence from China

This paper explores how employee education affects the performance of Corporate Social Responsibility (CSR). By investigating 1,358 Chinese firms, we find that employee educations are positively associated with the quality of CSR reporting. Moreover, highly-educated employees have a stronger impact on the improved CSR reporting quality than other employees with lower educations. Further tests confirm these findings by including the external influences of state-owned regulations and mandatory disclosure requirements.