Voluntary Disclosure Practices Research Articles

Ambiguity or specificity: The influence of merchant guild culture on managers' disclosure strategy

AbstractRecent studies indicate that culture attributes significantly influence corporate behaviour. Building on this, our study explores how merchant guild culture (MGC) influences firms' voluntary disclosure practices, specifically through managerial disclosure strategies. Analysing data from Chinese listed firms between 2010 and 2022, we found that MGC significantly reduces the specificity of managerial responses at earnings communication conferences (ECCs). This suggests that firms influenced by MGC favour ambiguous communication, aligning with the value to mitigate competitive risks. Our findings deepen the understanding of cultural influences on corporate disclosure practices and extend literature on the role of informal institutions in corporate behaviours.

Sustainability and impact reporting in US higher education anchor institutions

PurposeThe purpose of this study is to assess how higher education anchor institutions (HEIs) voluntarily report their non-economic impacts. Its goals are to quantify the ease of public access to this information; strengthen the conceptual foundation for HEI impact reporting; and provide guidance for making HEI voluntary disclosures more accessible, comparable and systematic.Design/methodology/approachUsing an exploratory mixed methods design and purposeful sampling, this study analyzed voluntary public disclosures of 41 anchor institution universities in the USA to assess how they communicate their public value creation to stakeholders. Data sources included impact reports, donor reports, annual reports and sustainability reports. The study also analyzed the accessibility of this information by timing how long it took to locate.FindingsThe sampled US anchor institutions communicate their non-economic impact to stakeholders in myriad ways using a variety of formats. Time required to find the reports ranged from 37 to 50 min, with an average of 42.30 min. Disparate reporting formats inhibit comparability.Research limitations/implicationsOnly 41 anchor institutions were examined. The small sample may not be representative of the broader landscape of higher education institutions.Practical implicationsFindings offer guidance for improving voluntary nonfinancial disclosures to increase public confidence in higher education institutions while advancing community and global resilience. To strengthen voluntary disclosure practices, the study recommends using a standardized reporting format, framing HEI impact through socio-ecological resilience indicators, integrating reports and obtaining some form of assurance. These changes would enhance the credibility and comparability of the disclosures.Originality/valueThis research provides some of the first empirical insight into how US higher education anchor institutions report their value creation to the public. Its application of socio-ecological systems theory outlines an actionable conceptual foundation for HEI reporting by linking organizational, community and global resilience.

Access to Financial Disclosure and Knowledge Spillover

ABSTRACT Access to firms’ innovation outputs determines the extent of knowledge spillover that poses risk to innovation appropriability. We provide plausibly causal evidence that processing costs of financial disclosures, which inform users of the economic value of innovation, play a key role in firms’ management of knowledge spillover. We exploit an exogenous, randomly assigned, and staggered policy shock by the SEC that reduces processing costs of mandatory financial disclosures. In response, firms reduce patenting rates, with the effect concentrated among firms in more competitive industries and with lower costs of capital. Firms also reduce their patent disclosure quality. Our results suggest firms rely more on trade secrecy as their innovation property protection mechanism. Lower processing costs of financial disclosures affect neither innovation inputs nor voluntary disclosure practices. Our results show that firms strategically manage access to their innovation outputs through financial disclosures, patent disclosures, and trade secrecy to curb knowledge spillover. JEL Classifications: D23; G30; O31; O32; O34.

Unraveling the Dynamics: The Impact of Mandatory vs. Voluntary Financial Disclosure Practices on Investment Patterns

Financial disclosure practices play a crucial role in shaping investment patterns and decisions. This research paper delves into the intricate dynamics between mandatory and voluntary financial disclosure practices and their impact on investment behavior. Through a comprehensive review of literature and empirical evidence, this paper examines how different disclosure regimes influence investor confidence, market efficiency, and capital allocation. Furthermore, it explores the implications for regulatory frameworks and provides insights for policymakers, investors, and corporate entities navigating the complexities of financial disclosure

Formal vs. Informal Voluntary Disclosure Policies

Abstract Tax administrations have long grappled with the question of how noncompliant taxpayers should be allowed to correct their tax affairs voluntarily. While many jurisdictions have adopted various voluntary disclosure programs, several countries—including some of the world’s largest economies—have not done so. This Article examines the voluntary disclosure practices in twenty-five countries that do not have voluntary disclosure programs. It finds that the tax authorities in these jurisdictions frequently follow informal voluntary disclosure practices that operate as de facto substitutes for formal policies. In some countries, informal voluntary disclosure practices coexist alongside formal schemes. In light of these findings, this Article explores the tax policy considerations concerning the choice between formal and informal voluntary disclosure policies, and shows that formal schemes have several advantages over informal practices.

BEYOND THE BALANCE SHEET: A COMPREHENSIVE STUDY OF VOLUNTARY DISCLOSURE IN INDIAN FMCG COMPANIES

This study examines the extent and trends of voluntary disclosure among five FMCG companies in India over a three-year period from 2020 to 2023. Data was collected from annual reports and other public sources, focusing on financial, environmental, social, and governance-related information. Content analysis using binary coding was employed to quantify disclosure practices. The research found significant differences in voluntary disclosure among the companies, with areas such as product management, ESG reporting, and governance showing varying levels of disclosure. The findings highlight areas where companies can improve their voluntary disclosure practices to enhance transparency and accountability.

A evolução na divulgação de práticas de compliance por companhias abertas brasileiras no período “Lava Jato”

Abstract This study investigates the evolution of compliance disclosure by Brazilian public companies in the context of Operation Lava Jato (Car Wash), comparing the opening year and the last year of its protagonism. Using the interpretive paradigm, the Management Reports of 2014 and 2019 of 104 companies listed in the New Market segment of B3 were analyzed through the content analysis technique. The findings indicated a substantial increase in compliance disclosure in the analyzed companies, mainly in categories such as Anti-corruption Policy, Compliance Organizational Culture, Internal Compliance Programs and Processes, and Compliance Legislation and Standards. It was revealed that the disclosure of Monitoring and Risk Management Practices played a relevant role in the voluntary disclosure practices of these entities. The increased compliance disclosure by companies with a strong relationship with the Public Power suggests that coercive pressures of a government nature tend to maximize the adoption of compliance practices and disclosure. The findings contribute from a theoretical perspective by identifying the progress in voluntary compliance disclosure as a response strategy to institutional pressures, especially in companies exposed to coercive governmental pressures. From a practical viewpoint, it contributes by revealing the compliance categories emphasized in the disclosures by Brazilian companies, helping corporate report developers, and informing other economic agents. On a social level, the increased compliance disclosure points to progress in creating conditions that seek to increase confidence among economic agents, thus favoring economic growth.

The role of the strategic apex in shaping the disclosure strategy: A family firm in crisis

This study draws on attribution theory to examine how and by what means the firm's top management team, board members, and owner(s) (i.e., the strategic apex) shape disclosure strategies. Drawing on interviews and archival data spanning six years, we conduct a case study of a financially distressed private family-owned media group. Unique access to these data allowed us to peer into the disclosure strategy formation process that typically takes place behind closed doors in private firms. Our findings show that financial distress preceded the formation of the disclosure strategy and the voluntary disclosure practices designed to satisfy financially powerful stakeholders, and that internal whistleblowers act as a low-cost disclosure tool to inform financially weaker stakeholders. In addition, the development of the disclosure strategy is strongly influenced by the strategic apex, which forms collaborative teams, organises stakeholders and their information needs, and meticulously manages and controls the content and timing of voluntary disclosures. Our findings also suggest that a tightly knit disclosure strategy and voluntary disclosure practices are used to influence rather than inform, to manage stakeholder interactions, and to influence public opinion.

Headline Impression Management in the Earnings Press Releases of TSX Venture Exchange Firms*

ABSTRACTThis paper explores firms traded on the Toronto Stock Exchange (TSX) Venture Exchange and their voluntary disclosure practices by focusing on earnings press releases (EPRs). We compare the characteristics of EPR issuers and non‐issuers and investigate how the former group uses headline impression management in their EPRs to highlight firm performance. More precisely, we examine emphasis and tone management techniques in the headlines of over 1,300 EPRs by TSX Venture Exchange (TSX‐V) firms. Our results show that the main determinants of the EPR disclosure choice are the achievement of positive revenue, an increasing trend in firm market value, and industry type. We find that EPR issuers reinforce and repeat positive results in the headlines of EPRs and use positive tone management to highlight positive financial performance. Our results confirm the association between firm performance and strategic placement of performance results, while illustrating that the strength of this association varies by industry and by EPR characteristics such as EPR length and numerical intensity. Overall, this paper sheds light on TSX‐V firms, their disclosure practices, and potential violations of recommendations from regulators regarding avoiding exaggerated or promotional language in press releases.

Translating audit materiality in disclosure: Competing logics and different outcomes in Australia and New Zealand

Within the accounting profession, PwC has introduced innovative practices related to audit materiality disclosures, and subsequently, some other auditors have accepted and followed PwC’s voluntary disclosure policy in audit reports, whereas others have rejected it. In this study we report on why external auditors in Australia and New Zealand have developed different audit materiality disclosure practices. As such, we explore the interplay between competing institutional logics, to shed light on the ways in which audit disclosure practices differ. Our findings indicate that, in New Zealand, both Deloitte and KPMG have been influenced by stakeholders pressuring them to accept and then follow the new voluntary disclosure practice introduced by PwC. In Australia, however, there has been resistance towards voluntary audit materiality disclosures. We examine claims about the various risks surrounding these audit disclosure practices. The study conveys how the circulation of ideas in the audit domain is influenced by a quest for tangibility (of claims), as mediated by the interplay between institutional logics, which has led to differences between audit disclosure practices in Australia and New Zealand.

Chief Executive Officers Dynamics And Corporate Voluntary Disclosures in Nigeria and South Africa

This study investigated the effect of Chief Executive Officers Dynamics on voluntary disclosure of selected industrial goods firms in Nigeria and South Africa. Corporate social responsibility was used as dependent variable while chief executive officers’ tenure, chief executive officers’ age, chief executive officers’ experience, were used as independent variables. A sample of 26 quoted industrial goods firms from two African countries (Nigeria and South Africa) was used for the period of ten years spanning 2012 to 2021. The study employed ex-post facto and longitudinal research design. The secondary sources of data were collected from annual reports and seven (3) specific objectives and hypotheses were subjected to some preliminary data tests like descriptive statistics, Pearson correlation analysis, Variance inflation factor, histogram normality tests and were tested using binary logit least regression analysis. Using a sample of 260 from two African countries firm-year observations, the result revealed that chief executive officers tenure and chief executive officers experience has positive and significant effect on voluntary disclosure practices which was statistically significant at 1% and 5% levels of significance respectively while, CEO Age was found to have negative and insignificant effect on voluntary disclosure practices. Based on the findings made, the study recommends among others that quoted industrial goods firms in Nigeria and South Africa should ensure that the long tenure of CEOs should be encouraged among Nigeria firms while the maximum three years of CEO tenure should be discouraged among South Africa firms and it should be backed up by law and strictly enforced. Again, the study recommend that management of industrial goods firms in Nigeria and South Africa should Long tenure of CEOs should be encouraged among Nigeria firms while the maximum three years of CEO tenure should be discouraged among South Africa firms and it sho

Financial reporting and disclosure practices in China

We study financial reporting and disclosure practices in China using survey methods similar to prior studies of U.S. firms (i.e., Graham et al., 2005; Dichev et al., 2013). Comparing earnings features, motives to manage and smooth earnings, and voluntary disclosure practices between the two countries, we reveal three major differences. First, Chinese firms exhibit a stronger preference for predictive, relative to verifiable, attributes of earnings that can signal stable firm performance to their stakeholders. Second, smooth earnings are desired by various stakeholders and can be achieved through coordination among connected stakeholders, which is conceptually different from earnings management. Third, Chinese firms consider public disclosure as less relevant in the reduction of the cost of capital. In addition, Chinese firms do not have a bias towards conservative reporting. We explain and reconcile these differences as resulting from some unique institutional features of China. Our study provides novel field evidence that contributes to, expands, and directly corroborates existing empirical studies.

Voluntary disclosure and firm value: Evidence from Indonesia

Climate change carries risks that need to be mitigated by all parties, including companies because it affects company value. Many studies find that voluntary disclosure positively affects firm value in developing countries. This study aims to examine the effect of voluntary disclosure (CSR and carbon disclosure on firm value) in the developing country of Indonesia. Researchers suspect that voluntary disclosure practice in developing countries is still low, so that investors respond negatively. To test the hypothesis using regression with a total of 72 observations from the energy sector companies. The results of the study show that voluntary disclosure has a negative effect on firm value. The level of voluntary disclosure in Indonesia is still low, just complying with government regulations, and it is still considered a cost that affects the firm’s value. The implication of this research is to encourage the government to immediately make regulations and concrete steps to mitigate the impact of climate change.

Voluntary Disclosures and market value of deposit money banks in Nigeria

Companies all over the world are now realizing that the disclosure of only mandatory information does not give a complete measurement of firm’s value. Thus, the disclosure of mandatory and voluntary information together gives a balanced view of the companies’ performance and value over time. The main objective of this study was to examine the effect of voluntary disclosures on firms’ value taking samples from deposit money banks listed on the floor of the Nigeria Exchange Group from 2012-2021. The independent variable of the study being voluntary disclosure was proxied by social donations & gifting disclosure (SODD) and eemployee’s health and safety disclosure (EHSD) while the dependent variable being firms’ market value was proxied by Tobin’s Q. Furthermore, in line with related extant literature, the study controlled the model goodness of fit by employing the variable of return on equity (ROE). The research design adopted for this study was ex post facto, purposive sampling technique was employed and secondary source of data used was obtained from the studied companies’ annual report and Nigeria Exchange Group fact book. Dummy Least Square Variable regression was adopted to analyze and test the two hypotheses formulated for the study. The findings of the study revealed that social donation and gifting disclosure has a positive significant effect on the market value of deposit money banks while employee health and safety disclosure has an insignificant negative effect on market value of listed deposit money banks in Nigeria. Thus, based on these findings, it was concluded that social donations and gifting disclosure has a significant effect while employee health and safety disclosure has insignificant effect on market value of listed deposit money banks in Nigeria. value. It was therefore recommended among others that the apex bank should set sector specific benchmarks against which individual banks should compare their voluntary disclosure practices and make improvements when the need arises.

Voluntary disclosure and corporate governance: substitutes or complements for firm value?

PurposeThe purpose of this study is to examine whether voluntary disclosure (VD) and corporate governance (CG) are substitutes or complements to each other in improving firms’ value in a non-Anglo-Saxon setting, namely, France.Design/methodology/approachThis study uses a sample of 990 listed firms in France from 2010 to 2020 to test the theoretical predictions. A random effect regression and two-stage least squares estimators are used to test the relationships. The results are largely robust across a number of econometric models that take into account diverse kinds of endogeneities.FindingsThis study reveals that VD and CG are positively associated with firm value. The finding also indicates that VD and CG work together as substitutes rather than as complements. Furthermore, the author’s evidence suggests that ownership structure and CEO characteristics are substitutive with VD in their effect on firm value. This evidence is consistent with the view that VD can add value to the firm but only under a number of conditions.Practical implicationsThe results shed further light on how a firm could improve its value among stakeholders by designing VD and CG practices effectively. Specifically, as VD generally acts as a substitute to CG, to accomplish their optimal economic outcomes, firms need to be discerning in executing VD and governance practices. In addition, firms have strategic flexibility in constructing VD and governance practices contingent on their own settings. Policymakers, investors and managers could use these results to examine CG and VD practices in France following the implementation of new regulations.Originality/valueThis study extends and contributes to the mixed or equivocal evidence of the relationships between VD, CG mechanisms and firm value. It contributes to the extant literature by first providing additional evidence, which suggests value-increasing effects of better-governed and more transparent firms. Second, this study reconciles extant disparate results by suggesting that VD can substitute CG in improving firm value. These findings have profound implications for policymakers, investors and firm’s managers.

Voluntary Disclosure Practices: A Systematic Review of Literature

Voluntary Disclosure Practices: A Systematic Review of Literature

How the quality of initial coin offering white papers influences fundraising: Using security token offerings white papers as a benchmark

SummaryIn recent years, many initial coin offerings (ICOs) scams have been reported, attracting attention to this relatively new and unregulated ICO market, which lacks disclosure requirements and therefore suffers from intensifying problems of information asymmetry inherent in crowdfunding. As a prospectus‐type document, an ICO white paper serves as a major means of voluntary disclosure practices adopted by ventures seeking external financing. Given the importance of an ICO white paper and the difficulty of assessing its quality, we propose to benchmark it against white paper content for security token offerings (STOs)—a more regulated ICO subset. Using the similarity of ICO white papers with STO white papers to proxy for disclosure quality, we document that the ICO campaigns that have white papers more similar to STO white papers are more likely to raise funding successfully. Our findings provide implications for policymakers, ICO fundraisers, and investors on the importance of white paper quality.

The impact of corporate attributes on voluntary HR disclosure practices: a study of Indian corporate sector

PurposeThe objective of the present study is to examine the impact of corporate characteristics on human resource disclosures in Indian corporate sector.Design/methodology/approachThe study investigates the annual reports of 336 Indian listed companies of NSE-500 Index. The data are collected for the latest time period which contains eight years (FY 2012–13 to 2019–2020). The data of independent variables (company characteristics) have collected from annual reports and CMIE ProwessIQ Database of the Indian listed companies. The data of human resource dissclosure index (HRDI) is collected form annual reports using content analysis approach. For analysis purpose, descriptive statistics, Pearson's correlation matrix, Two-way Least Square Dummy Variable (LSDV) regression model have been used.FindingsThe outcomes show that net sales, market capitalisation, ROTA, return on equity, quick ratio, PAR have significant positive and age, profit after tax, current ratio have significant negative effect on HRDI. On the contrary, debt-equity ratio, earnings per share, type of auditor, listing status have insignificant positive and net fixed assets, promoter's holding have insignificant negative effect on HR disclosures of the selected Indian listed companies.Originality/valueThe HRDI constructed in the present study helps the Institute of Chartered Accountants of India (ICAI) and other regulatory bodies to make some standards regarding voluntary HR disclosure practices in Indian corporate sector.

Does GRI compliance moderate the impact of sustainability disclosure on firm value?

PurposeThis paper aims to examine the moderating role of global reporting initiative (GRI) compliance in the association between sustainability reporting and firm value.Design/methodology/approachThis study investigates a sample of 223 manufacturing firms, encompassing 11 industries from 2010 to 2019. Using GRI compliance as a moderator, the authors employed a generalized method of moments model to study how sustainability disclosure impacts firm value.FindingsThe results indicate a positive and significant association between sustainability disclosure and firm value. This study reveals that GRI compliance moderates the relationship between sustainability disclosure and firm value, such that firm value increases when the firm adopts GRI in sustainability reporting.Originality/valueNo prior studies have examined GRI compliance's direct and moderating effects on the association between sustainability disclosures and firm value in the Indian manufacturing sector. This study is also valuable for the managers and industry to understand the significance of implementing voluntary sustainability disclosure practices and being GRI compliant.

KOSPI 상위 10개 기업의 산업별 중요성을 반영한 ESG 공시 충실성 연구

Voluntary ESG disclosure practices are on the rise, oftentimes not fully embracing material ESG information which is in increasing demand in the capital market. This calls for the adoption of financially material ESG disclosure standards. The SASB standards, with their clear industry-specific material disclosure guidelines, are gaining legitimacy in Korean and global markets. This study examines the disclosure integrity of ESG disclosures of the Top 10 companies listed on the KOSPI in terms of industry-specific financial materiality. We construct a coverage-ratio-scoring-mechanism by mapping Bloomberg ESG Disclosure datasets and sustainability reports to the SASB standards. The results show that 1) during 2018-2020, KOSPI Top 10 firms showed advanced industry-specific material ESG disclosure both in quantity and quality and 2) readily-available Bloomberg ESG Disclosure datasets did not fully capture the scope of the SASB-related disclosure practices of the sample firms.