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Firm managers likely have more information than outsiders. If managers strategically conceal information, market uncertainty will increase. We develop a dynamic corporate disclosure model, estimating the model using the management earnings forecasts of US public companies. The model, based on the buildup of reputations by managers over time, matches key facts about forecast dynamics. We find that 80% of firms strategically manage information, that managers have superior information around half of the time, and that firms conceal information about 40% of the time. Concealment increases market uncertainty by just under 8%, a sizable information loss.

We examine whether managers provide more voluntary disclosure when GAAP limits their reporting discretion in financial statements. We find managers are more likely to disclose non-GAAP earnings, issue more management forecasts, and provide longer yet more readable MD&A disclosures when GAAP limits their discretion. These effects are stronger when there is greater demand for information and better monitoring. In contrast, these effects are weaker when managers have incentives to manage earnings. Difference-in-differences analyses around standard changes provide further evidence that managers make more non-GAAP adjustments and are more likely to discuss the standard and its underlying transaction in the MD&A when a new standard limits their discretion more than its predecessor. Collectively, our results suggest managers use voluntary disclosure channels to convey information when GAAP limits their ability to recognize such information in financial statements.

SYNOPSIS We examine changes in voluntary disclosure of balance sheet and cash flow (BS/CF) information in earnings releases after restatement announcements. We consider these disclosures to be particularly relevant in the restatement context since they help investors interpret accruals and assess reporting quality at a time when information uncertainty is high. We find that BS/CF disclosures drop significantly for at least five quarters following restatement announcements, particularly for severe restatements and those restatements more likely to lead to litigation, and less for firms likely to benefit from reputation-repairing activities. We next consider the impact of BS/CF changes on earnings informativeness and find significantly lower post-restatement earnings response coefficients for firms ceasing BS/CF disclosure, but not otherwise. Overall, we argue that litigation concerns provide a strong disincentive for disclosure following restatement announcements. Our findings add to a growing literature on the importance of disaggregated BS/CF information in interpreting accruals.

Since the establishment of the Shenzhen Stock Exchange (SZSE) Disclosure Ranking System in 2001, the disclosure quality of listed companies has increased in China. As a result, analysts can access ...

Purpose: The purpose of this research was to investigate the International Financial Reporting Standards (IFRS) compliance, disclosure and relevance of financial statements as perceived by investors with regards to their decision making. Design/Methodology/Approach: Since the study based its findings on perceptions of investors, a concept that cannot be defined with certainty and is not constant since it varies due to factors such as regulatory framework, country polies, investor experience, technological factors, just to mention a few, the regression model was used to portray the relationship between investment decision making and financial reporting relevance, credibility/reliability and quality of disclosures Findings: Corporate governance, audit form reputation, audit committee and company size have a great impact on IFRS compliance and disclosure in financial statements. Verifiability and understandability help to improve IFRS Disclosure and Financial Statement Relevance. Relevance is considered an important attribute of quality financial information in decision making. Practical Implications: Investors need to make effective and informed decisions on investment. For this to be possible, information provided in the financial statements has to be relevant and faithfully represent the substance of what it purports to represent. Companies should practice voluntary disclosure on information items that influence investment decisions and be required to give a simplified interpretation of the information contained in the annual reports. Originality/Value: The analysis will assist investors in better judging the disclosure and relevance of financial statements of organizations from a thorough knowledge of the two aspects so as to make more informed decisions

How precise should accounting measurements be, if management has discretion to strategically withhold? We examine this question by nesting an optimal persuasion mechanism, which controls what measurements are conducted, within a voluntary disclosure framework a la Dye (85) and Jung and Kwon (1988). In our setting, information has real effects because the firm uses it to make a continuous operating decision, increasing in the market's belief. Absent frictions other than uncertainty about information endowment, we show that imprecision can reduce strategic withholding but always decreases firm value. We then examine plausible environments under which, by contrast, there is an optimal level of imprecision featuring coarseness at the marginal discloser. We offer additional implications in the contexts of enforcement against strategic withholding and financing with collateralized assets.

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.

This study examines the effect of initial credit ratings on voluntary disclosure in Korea. Managers are concerned about initial credit ratings because they become the benchmark for future debt issu...

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.

PurposeThe purpose of this study is observing the disclosure pattern of integrated reporting (IR) and investigating its relationship with a firm's operational, financial and market growth performance measured in the form of return on assets (ROA), return on equity (ROE) and market-to-book value ratio respectively in the voluntary disclosure regime of Bangladesh.Design/methodology/approachThis research is quantitative, based on a pooled-OLS regression analysis of 20 firms listed under ten different nonfinancial industries of the Dhaka Stock Exchange (DSE) for three financial years from 2015–2016 to 2017–2018, with 60 firm-year observations. A manual content analysis based on a structured integrated reporting disclosure index (IRDIN) measures the extent of disclosure in the corporate annual reports. The practical model consists of the dependent variable IRDIN and the independent variables ROA, ROE and market-to-book value ratio. The natural logarithm of total assets and financial leverage are the two controlling variables used in the model.FindingsThe findings deduced from the empirical results indicate that the IRDIN is positively and significantly related to all three performance variables. Content analysis shows an increasing pattern of disclosure of the constructed index elements by the sample firms.Research limitations/implicationsA Small sample size may deter the generalization of the research findings in other voluntary disclosure regimes. Self-constructed IRDIN index scores may be affected by subjective judgment while assessing the annual reports.Practical implicationsCapital market regulators can gain valuable insights regarding the suitability of implementing IR in Bangladesh as the results show a positive relationship of firm performance with the adoption of this revolutionary paradigm in corporate reporting.Originality/valueThis study adds value to the existing limited literature of IR disclosure and firm performance in Bangladesh by incorporating content analysis and regression analysis to understand how firms respond to the demand of value creation by the stakeholders in a voluntary disclosure regime. This study captures sample firms from all the nonfinancial industries of Bangladesh with a unique IR index, which is the first of its kind.

PurposeThis paper examines the effect of audit committee (AC) reporting, measured by the tone of audit committee disclosures, in improving financial reporting quality as proxied by earnings management.Design/methodology/approachThe authors focus on the textual properties of AC reports, particularly the tone of AC disclosure, and their impact on financial reporting quality proxied using real and accruals-based earnings management. For additional analysis, the authors use a financial reporting index and matched sample. The analysis is based on a sample of UK FTSE 350 firms.FindingsThe analysis suggests that AC reports are not boilerplate but varied in language. The authors find AC reporting is negatively associated with both real and accruals-based earnings management. In our additional tests, the authors find a positive association between financial reporting quality index and reporting tone.Research limitations/implicationsOverall, this paper provides baseline evidence for future research and policy making and reveals that ACs reporting what they have done increases transparency and impacts on reporting quality.Practical implicationsOverall, this paper suggests that the tone of AC reports seems to convey information that affects the communication function of AC reporting and thereby helps to improve reporting quality.Originality/valueThough the importance of AC disclosures in improving reporting quality is well recognised in policy guidelines and governance recommendations, no study has employed computer-based textual analysis of AC reports and investigated the effect of AC disclosure tone and the role it can play in achieving higher reporting quality.

Prior literature presents various perspectives on the role of financial reporting. One view is that mandatory periodic reporting disciplines managers and encourages timely voluntary disclosure. We examine this “confirmation hypothesis” using the shock to financial reporting quality experienced by Arthur Andersen clients forced to switch auditors. Consistent with the confirmation hypothesis, we find that former Andersen clients increase disclosure after they change auditors. They increase forecasting frequency and enhance forecasting precision and specificity. We present additional cross-sectional evidence that shows Arthur Andersen clients with larger increases in financial reporting quality increased their disclosure by relatively more, even within the sample of Arthur Andersen clients. We supplement our main findings with a battery of tests to reduce the possibility that alternative shocks and uncertainty drive our results. Our findings support complementarity between financial reporting quality and voluntary disclosures.

This study aims to determine the effect of tax planning and voluntary disclosure on firm value with earnings quality and audit quality as moderation in pharmaceutical industry manufacturing companies listed on the Indonesia Stock Exchange for the period 2009-2018. The sample in this study amounted to 80 samples determined by the purposive sampling method. Tests are carried out using the Moderated Regression Analysis (MRA) test using Eviews 9. The test results show that tax planning and earnings quality have a significant negative effect on firm value. Voluntary disclosure has a positive effect on company value. And the quality of earnings does not affect the value of the company. Tax planning and voluntary disclosure have a significant effect on company value when moderated by earnings quality. Tax planning and voluntary disclosure do not have a significant effect on company value when moderated by audit quality. Earnings quality and audit quality can strengthen the relationship between tax planning and voluntary disclosure of company value.

PurposeThe temporary enforced closure of businesses in response to the coronavirus pandemic has resulted in governments in Europe and beyond offering short-term financial support to the businesses and workers affected. The purpose of this paper is to evaluate a group of workers unable to benefit from the short-term job retention schemes and support to the self-employed made available by governments, namely, those whose paid work is comprised wholly of undeclared work, and how this could be addressed.Design/methodology/approachTo identify those whose paid work is entirely undeclared, a Eurobarometer survey of undeclared work in Europe is reported conducted in September 2019, just prior to the pandemic, and involving 27,565 face-to-face interviews in 28 European countries.FindingsThe finding is that the paid work of one in every 132 European citizens is comprised wholly of undeclared work, and these workers are concentrated in non-essential businesses and activities severely affected by the lockdown. These workers whose paid work is comprised wholly of undeclared work are significantly more likely to be widowed or divorced/separated, living in households with three or more adults, without children and most of the time have financial difficulties in making ends meet.Practical implicationsGiven that businesses and workers in the undeclared economy are largely unable to work under lockdown, it is argued that providing access to short-term financial support, through a regularisation initiative based on voluntary disclosure, would not only provide the income support these workers need but also bring them out of the shadows and put them on the radar of the state authorities, thus transforming undeclared work into declared work.Originality/valueThis paper shows how in the current or repeat lockdowns, the short-term financial support made available by governments can be used to transform undeclared work into declared work.

We examine the properties of firms’ forecasting records and whether the accuracy of their prior earnings forecasts affects investor response to their subsequent forecasts. Within the context of a Bayesian model of investor learning, we find that the stock price response to management forecast news is increasing in prior forecast accuracy and also in the length of a firm’s forecasting record. Further, we document that investors are more responsive to extreme good and bad news forecasts when a firm has an established forecasting record. Overall, these results suggest that a firm’s prior forecasting behavior allows it to establish a forecasting reputation. JEL Descriptors G19, G39, D89, M40 * Corresponding Author: ahutton@bc.edu; 617 552-1951 phone; 617 552-6345 fax; Fulton Hall 520, 140 Commonwealth Ave. Chestnut Hill, MA 02467-3808 *We thank Ray Ball, Steve Baginski, Linda Bamber, Ken French, Charles Hsu, Michael Kimbrough, S.P. Kothari, Rafael La Porta, Franco Wong, Eric Yeung, Valentina Zamora, an anonymous referee, and workshop participants at Boston College, Boston University, Carnegie Mellon University, Emory University, INSEAD, University of Georgia, MIT Sloan School of Management, Tuck School of Business, George Washington University, FEA Conference at the University of North Carolina, Chapel Hill and the 2006 American Accounting Association annual meetings for helpful comments. Finally, we thank Robert Burnham for excellent research assistance.

The SEC prohibits the presentation of non‐GAAP measures before corresponding GAAP measures; however, a large proportion of non‐GAAP reporters present non‐GAAP EPS before GAAP EPS in their earnings announcements. This noncompliance raises questions about whether firms use prominence to highlight higher or lower quality non‐GAAP information. For firms reporting non‐GAAP EPS between 2003 and 2016, prominent non‐GAAP EPS is associated with higher quality non‐GAAP reporting. Further tests reveal that nonregulatory incentives, rather than regulatory costs, explain this relation. Specifically, prominence is associated with higher quality non‐GAAP reporting in settings where prominence is not regulated, investors ignore prominence when non‐GAAP reporting quality is lower, and the minority of firms using prominence to mislead exhibit characteristics associated with weaker investor monitoring. Overall, we provide evidence that regulatory noncompliance can reflect an intent to inform, and that most firms use prominence to highlight higher quality non‐GAAP information despite prohibitive regulation.

Purpose This study aims to provide empirical evidence on the determinants of voluntary integrated reporting () disclosure quality. Design/methodology/approach The samples include companies from the Integrated Reporting Examples Database on the International Integrated Reporting Committee’s (IIRC) website, except South Africa and Brazil, where reporting is mandatory. The final sample includes 29 countries, with 148 companies and 592 observations for the study period 2014–2017. Content analysis is used to measure disclosure quality derived from the principles and elements published by IIRC (2013). The fraction regression probit model is used to test the proposed hypothesis. Findings This study provides empirical evidence that competition from new entrants and country-level accounting competence encourage companies to implement the International Integrated Reporting Framework (IIRF). Signaling theory and diffusion of innovation theory can be used to explain this association. Meanwhile, product market competition of existing rivals has been found to reduce the adoption of the framework, which is consistent with the proprietary cost theory. Finally, this study finds that company reputation does not affect voluntary disclosure quality. Research limitations/implications This study did not examine the barriers to entry to explain the effect of competition from new entrants as a possible determinant of disclosure quality. Furthermore, the inclusion of in the accounting curriculum of universities and certification bodies in certain countries has not been considered as a control variable. The results might also be limited to companies that voluntarily submitted into the Integrated Reporting Examples Database on the IIRC website. All these limitations provide ample avenues for future research. Practical implications This research provides implications for governments and standard setters to further sharpen the competence of accountants through memberships in professional accountancy organisations or through training and seminars related to . The results also suggest that universities should include the topic of in the accounting program curriculum to increase the understanding of prospective accountants about this reporting regime. The results also show differences on the impact of competition between new entrants and existing rivals on disclosure quality. This can be used by IIRC or other standard setters to predict the . Originality/value This study uses the diffusion of innovation theory to explain the association between country-level accounting competence and disclosure quality. Few studies have researched this association. The results show that a country’s accounting competence increases the application of the IIRF in corporate reporting. has been considered an innovation in corporate reporting and can be implemented by the company if its professional accountants have enough knowledge of this reporting framework.

This study assesses the effectiveness of anti-corruption policies of Pakistan by relating the corruption of government officials to the actual and perceived bureaucratic hurdles faced by formal businesses. It offers a unique perspective by focusing on cases in which the accused officers voluntarily disclosed the misuse of public money (or gains acquired through corruption) in order to avail the option of plea-bargaining. The empirical analysis estimates the effect of these policies on the responses of the managers of business firms in Enterprise Surveys. The number of accusations seems to reduce the incidence of bureaucratic corruption. While the amount that is being offered in bargaining has a negative effect overall, it switches sign overtime suggesting the possibility that it may increase corruption in the long run. The core results are robust across various measures of firm-level corruption. The instrumental variable estimates produce similar results.

This study aims to determine the effect of shareholding structure, company size, and profitability on voluntary disclosure. The dependent variable used in this study is the managerial and institutional ownership, company size, and company profitability. While the independent variable in this study is voluntary disclosure. This study used the population of all manufacturing companies that were continuously listed on the Indonesia Stock Exchange during 2017-2018 period. This study used 61 companies multiplied by two years of the study period obtained 122 samples. Sampling technique used was purposive sampling with certain criteria to eliminate companies from the population. The study found reveal that managerial and institutional ownership had negative influence on voluntary disclosure, while company size variables had a positive influence on voluntary disclosure. Whereas the profitability had no significant influence on voluntary disclosure. Keywords: voluntary disclosure, company ownership structure, company size, profitability

The research method used multiple regression analysis. The data used are the annual financial statements of property companies listed on the Indonesia Stock Exchange 2014-2016. The sample is 87 companies with purposive sampling technique. The data is processed using SPSS (Statistical Product and Service Solution) Version 22. The results of this study indicate that earnings management has a positive effect on the cost of equity capital with a significant level of 0.000 and beta 0.712, information asymmetry has a significant effect on the cost of equity capital with a significant level of 0.087 and beta 0.139. , then voluntary disclosure has no significant effect on the cost of equity capital with a significant level of 0.955 and beta 0.004. In general, it can be concluded that earnings management has a positive effect on the cost of equity capital, while information asymmetry and voluntary disclosure have no significant effect on the cost of equity capital. Future studies consider adding other independent variables that can affect the cost of equity capital so that it can show a better correlation between the dependent and independent variables.

Purpose: This paper proposes a comprehensive framework to assess real-world blockchain applications' potential outcomes using three corporate governance literature. Design/Methodology/Approach: Reviewing the most recent papers on the subject, the author draws upon existing and new case studies to outline overlapping areas between blockchain features and Corporate Governance (CG). Findings: Any blockchain type/relation has potentials and drawbacks. Recognizing and effectively addressing the relationship between the company and blockchain may prove useful in the management of a business. Failing at managing the blockchain integration can, on the other hand, be detrimental for the company. The present analysis supports the view that although the blockchain revolution aims to reduce the intermediaries, the blockchain oracles' limits will still grant a predominant role to human interaction. Practical Implications: More than contributing to the blockchain and corporate governance literature, this paper is focused on providing managers with an accessible overview of the outcomes of blockchain integration. If facing difficulties, the framework provided could help understand the motives behind the struggle and help find a way to overcome them. Originality/Value: To the best of the author’s knowledge, no other paper attempted to study the overlapping areas between blockchain and the three corporate governance literature. Given the scarcity of blockchain papers relying on corporate governance, this study will provide an additional resource to draw upon.

While voluntary disclosure theory posits that profit‐oriented companies voluntarily disclose information to increase their market value, this does not explain why a charity would report in accordance with a more comprehensive financial reporting framework than required. Using a unique financial reporting framework choice available in Australia, our study examines factors associated with large charities' choice of a General Purpose Financial Statements (GPFS) reporting framework, which encompasses expansive financial reporting requirements, versus a Special Purpose Financial Statements (SPFS) reporting framework, where management, within limits, effectively chooses that subset of accounting standards applicable to that charity. For those preparing GPFS, we then examine the factors that determine those charities that report in accordance with the complete set of Australian Accounting Standards (Tier 1) versus Reduced Disclosure Requirements (Tier 2). Using manually collected data from 11,471 large‐registered charities for 2014–2016, we find that the economic importance of the charity, its funding sources, and level of indebtedness are significant in explaining charities choosing a more comprehensive financial reporting framework. Further, we find a substantial increase in the proportion of large charities electing to disclose GPFS‐Tier 2 over this three‐year window. The choice of a large audit firm (Big 4 and mid‐tier audit firms) is significantly associated with charities both lodging more comprehensive GPFS, and also reporting GPFS in accordance with the less onerous GPFS‐Tier 2 framework. Our results provide insights into voluntary reporting choices made by charities and inform charities, accounting firms, and regulators of factors influencing charities' choice of financial reporting frameworks.

This paper studies equilibrium voluntary disclosures for a company financed with both debt and equity, where the firm's manager is compensated based on a linear combination of the market prices of the firm's equity and enterprise values (i.e., the sum of its values of equity and debt). Such compensation policies span “all equity” contracts, “all debt” contracts, and “all enterprise value” contracts. We show: (1) under both “all equity” and “all debt” contracts, increased debt always leads to reduced voluntary disclosure; (2) under “all enterprise value” contracts, increased debt has no effect on voluntary disclosure; (3) for all contracts that place positive weight on both equity and enterprise values, more debt leads to less (respectively, more) disclosure if the initial debt level is low (respectively, high); (4) increasing the weight on equity prices always induces less disclosure, so: (5) “all equity” contracts minimize disclosures, and “all debt” contracts maximize disclosures.

The coronavirus pandemic has led to revenue loss for tourism enterprises and workers due to restrictions on movement. In response, governments have made available temporary financial support, but not to those tourist enterprises and workers in the undeclared economy. Reporting a 2019 Eurobarometer survey, this paper reveals that one in 165 European citizens engage in undeclared work in tourism and the groups involved. To bring these enterprises and workers onto the radar of the state, a voluntary disclosure initiative is advocated offering access to the temporary financial support for undeclared enterprises and workers disclosing their previous undeclared work.

Purpose In the Gulf Cooperative Council (GCC) countries, the integrated reporting (IR) concept has attracted considerable attention from banks. In as much as IR is not a legal requirement anywhere in the GCC, however, the incidence of disclosure by banks across the GCC varies considerably and asymmetries exist in the content of disclosure released by banks within, as well as across, these jurisdictions. This study aims to examine the relationship between IR disclosure and financial, operational and market performance in both Islamic and conventional banks. Design/methodology/approach This study examines five years (2012-2016) of IR from 59 banks in GCC countries with 295 observations. The integrated report index (IRI), as the independent variable, is regressed separately against three performance indicators [return on assets, return on equity and Tobin’s Q (TQ)] as dependent variables. In addition, the following two types of control variables are inserted in the regression equations in this study: macroeconomic (two indicators) and bank characteristics (three indicators). Findings The findings elicited from the empirical results demonstrate that, on the one hand, IR in conventional banks positively affects market performance, while negatively affecting operational and financial performance. On the other hand, the results for Islamic banks show that IR negatively affects market performance, with no discernible effect on neither financial nor operational performance. In the GCC banking sector, for the most, empirical results conflict with expectations implied by signaling theory and capital need theory. From this study, evidence suggests that GCC bank performance would not improve were IR disclosure rendered mandatory. However, that conclusion is stronger with respect to Islamic than with respect to conventional banks in the region. Originality/value The study provides insights into the effect of voluntary disclosure of IR as gauged by various measures of performance across Islamic and conventional banks located in a range of GCC countries. This study accordingly provides perspective on the extent to which IR can and does play a role in contributing to bank performance.

Purpose The purpose of this paper is to examine the effect of the emotional attachment strength of family members to their business on the quality of the voluntary disclosure of their key performance indicator (KPI). More specifically, the authors focused on the effect of two dimensions of the socio-emotional theory, i.e. “family influence and control” and “firm dynasty succession.” Design/methodology/approach The authors performed a content analysis of annual reports for a sample of 87 French families listed in CAC All-Tradable to calculate a disclosure quality index of KPI. The authors proxied the “family influence and control” by the proportion of family members appointed in the board. To identify the “firm dynasty succession” concern, the authors classified firms according to the generation they belonged to. The authors estimated a cross-sectional linear regression model to meet the research objective. Findings This study confirms the role of the family affective attachment in decreasing the quality of KPI disclosure in such a way to preserve its socio-emotional wealth. The family firms’ principals who desire to sustain their control on the firm, to perpetuate the business for future generations and to protect their emotional wealth tend to avoid the disclosure of credible and reliable KPI information. Practical implications The findings have meaningful practical implications. First, they provide relevant insights into the regulatory bodies of the financial reporting regarding the increasing appeal for making KPI disclosure mandatory. Second, as the family businesses are the most widespread proprietorship in the French context, the effect of the family agenda on the quality of the KPI should be of interest to various policymakers and financial statements’ users of such firms. Third, the results inform nonfamily shareholders regarding the importance of selecting representatives on the board that should share similar interest with regard to KPI disclosure. Social implications From a societal perspective, this study is relevant in taking into account the critical role the family businesses have in the French economy. This study should help the minority shareholders to protect their interests and maximize their wealth within the family firm because it sheds light on the influence that family members have on hiding key information on the firm’s real performance. Originality/value To the best of the authors’ knowledge, no prior study in the family firms literature has examined the quality of voluntary disclosure of KPI. Although most previous studies merely compared family and nonfamily firms in terms of voluntary disclosure, the authors acknowledge and address the heterogeneity between family firms. The authors contribute to the few prior empirical validations of SEW implication on voluntary disclosure decisions by testing the effect of an additional dimension, which is family dynasty.

PurposeThe purpose of this paper is to investigate the extent and quality of voluntary intellectual capital disclosure (ICD) by deposit money banks (DMBs) in Nigeria.Design/methodology/approachData were collected from a survey of 271 informants and content analysis of the annual reports of 12 DMBs in Nigeria. The data collected were analysed using factor analysis,t-test, Friedman test for related sample and Wilcoxon signed-rank test.FindingsThe findings of this paper indicate that the extent of ICD is significant and higher than the quality of ICD, which is insignificant, with the extent of disclosure highest in the relational component of intellectual capital. It also shows that a significant difference exists amongst the extent of human capital, structural capital and relational capital disclosures, with the significant difference traced to the difference between the extent of disclosures of relational capital and human capital.Research limitations/implicationsThe results can be interpreted across the target sample where the study covers a five-year period and 12 DMBs in Nigeria. However, the study provides a robust empirical basis for policymakers and regulators to develop future ICD regulatory guidelines for banks and push for improvement in the quality of ICD by DMBs.Originality/valueNo previous studies of voluntary ICD have considered the extent and quality of ICD by DMBs in Nigeria. Further, this study shed the light on a new human capital item related to “employee health and mental state”; therefore, it extends and supports the previous empirical literature on ICD.

Using interviews with forty formerly incarcerated people in the Greater Toronto Area, I explore how criminal record holders describe seeking work. People articulate being driven by a desire to be selective to whom, when, and how they disclose their past criminal record; they simultaneously want to talk about their past, at least to some people, some of the time. Many say they are quite selective in what types of jobs and employers they seek out, and their efforts to secure employment are driven by broader projects of stigma management. In light of these findings, I coin “selective, voluntary disclosure” (SVD) as a new set of policy configurations that aim to facilitate not only employment but also dignity, privacy, and empowerment. SVD is well attuned with what former prisoners describe doing on an everyday basis, and it accords with their goals, aspirations, and rehabilitative self-projects.

PurposeThis review aims to identify the determinants of voluntary disclosure of corporate social performance (CSP) and to analyze and consolidate previous quantitative studies to identify the theoretical perspectives and the variables used in measuring the determinants of CSP disclosure (CSP-D).Design/methodology/approachA literature review of articles published from 1987 to 2015 was conducted using the three databases, Ebsco, ISI and Jstor, with CSP-D as the dependent variable. The goal was to identify the theoretical perspectives underlying the studies and the independent variables.FindingsThe literature revealed a set of variables and their general measures, but the consensus confirmed that there was no single explanation for what determined CSP-D. The published theories that support a relationship between CSP-D and its determinants are legitimacy, institutional, stakeholder, agency and voluntary disclosure theory.Originality/valueThe results allowed us to identify the perspectives underlying the major theories and disclosed a set of factors considered by the literature as the ones that influence CSP-D. This information will be useful for researchers interested in developing their own studies on CSP-D because it presents the evolution of CSP-D factors over time and organizes the findings of multiple studies developed since the emergence of the theme.

We analyze a manager''s choice of precision of the information in a repeated cheap talk game under which the manager can excuse his lie by blaming the poor quality of the information system. In this setting, the manager can protect his reputation for the future period if the precision of information is imperfect, providing the manager with incentives to choose the poor quality of information system. However, the analyses show that even though the manager can excuse his lie relying on the imperfect precision, he finally selects perfect precision in most cases. The only exception is when he cannot publically determine the precision and he knows that his interest is not aligned with investor''s. Even in this case, he randomizes his choice of information quality between perfect and imperfect precision. Otherwise, the manager chooses the perfect precision of information system. Our theoretical model provides important insights into why managers provide truthful or precise disclosures in most cases even if they are able to lie. In addition, our findings explain why they sometimes deviate from their normal practice and provide inaccurate, biased, or imprecise forecasts.

Purpose This study aims to investigate the association between corporate carbon risk and debt maturity and the moderating role of voluntary disclosure, within the context of South Africa, an emerging player in the climate policy debate. Design/methodology/approach Based on the insights drawn from agency as well as information asymmetry theories, the authors develop models that link debt maturity with corporate carbon risk and voluntary disclosure and examine data obtained from companies listed on the Johannesburg Securities Exchange (JSE), for the period 2011-2015. Findings The findings document that, other things being equal, debt maturity is significantly higher, both statistically and economically, for companies with lower carbon intensity (risk). In addition, high-quality carbon disclosure accentuates the positive association between debt maturity and the inverse of carbon intensity. The results are robust to alternative measures of corporate carbon risk and issues of endogeneity. The findings are consistent with the view that lenders in South Africa use debt maturity as a non-price mechanism to address borrower risk and grant lower carbon risk companies that voluntarily provide higher quality carbon disclosures an even higher access to longer maturity debts; JSE-listed companies could use voluntary carbon disclosure to ease their access to debt with longer maturity. Practical implications The findings of this study have important implications to borrowers, pressure groups, policymakers and other stakeholders. Originality/value To the best of the authors’ knowledge, this study is the first to document evidence suggesting that lenders in South Africa use debt maturity as a non-price mechanism to address borrower risk.

The study examines whether corporate carbon risk exposure is associated with financial reporting quality and whether voluntary carbon disclosure mediates the relationship. We analyze data drawn from firms traded on the Johannesburg Stock Exchange (JSE), for the period 2011 to 2015. We document robust evidence that firms with higher carbon risk exposure tend to provide financial statements of poorer quality (i.e., direct effect) and this association is partially mediated through voluntary carbon disclosure (i.e., indirect effect). The overall negative association between corporate carbon risk exposure and the firm's financial reporting quality is partly explained by the quality of voluntary carbon disclosure.

Purpose — The purpose of this research is to analyze and prove the influence of independent variables that are proxied by profitability, liquidity, firm size on voluntary disclosure, and moderated by corporate governance variables. Design/methodology/approach — The object of the research is the companies listed on the IDX from 2012 through 2016. This research uses a purposive sampling method involving 45 annual company reports and uses multiple regression and MRA (Moderated Regression Analysis) as a data analysis tool. Findings — The results of this research indicate that there is a significant positive effect between liquidity, firm size on voluntary disclosure, there is a significant negative effect between profitability and voluntary disclosure, and corporate governance moderates the relationship between profitability, liquidity, firm size, and voluntary disclosure. Practical Implications — Companies with high liquidity supported by good corporate governance will reduce voluntary disclosures due to the existence of independent commissioners whose positions are still less influential with the board of commissioners and board of directors, in the other hand, companies with low profitability supported by good corporate governance encourage managers to disclose company information more broadly to convince all stakeholders concerned. Originality/value — Keywords Profitability, Liquidity, Company size, Corporate governance, Voluntary disclosure. Paper Type Research Paper (secondary data)

This study investigates whether firms located in areas with higher levels of religiosity disclose higher‐quality management earnings forecasts than do other firms. Using a US sample of 4,655 firm‐year observations over the period 2001 to 2014, we find that firms headquartered in counties with higher proportions of religious adherents issue earnings forecasts that are less optimistically biased and that the effect of religiosity is concentrated in firms with weak monitoring mechanisms. We also find that religiosity mitigates pessimistic bias in management earnings forecasts, but only for those issued by firms operating in low litigation industries. This result suggests that when the litigation risk is high, both ethicality and risk aversion are at work and their competing effects likely offset each other. Additionally, we document that forecasts issued by firms in more religious areas trigger stronger stock price reactions than those issued by other firms and that the effect is limited to forecasts containing optimistic bias. Overall, our results show that religiosity enhances the quality of management earnings forecasts, but the effect varies based on different conditions.

We examine a possible mechanism by which the lender can evaluate the borrower's ability to produce accurate forward-looking information. Forward-looking information is important to lenders to project the borrower's future performance and the loan's expected payoff. However, unlike historical financial statements, forward-looking information cannot be verified by lenders or external auditors. We contend that the borrower's past forecast accuracy provides a measure that allows the lender to assess the borrower's ability to produce accurate forward-looking information, allowing the lender to gain greater confidence in the borrower's projections of future value. Consistent with this argument, we find that the borrower's past forecast accuracy is negatively associated with the loan's initial interest spread. We also find that this relation is concentrated among non-relationship loans and borrowers with greater earnings volatility. Finally, we find that debt contracts to borrowers with more accurate managerial forecasts exhibit less interest rate mispricing. JEL Classifications: G30; M40; M41.

In this study we explore the association between environmental audit and the quality of environmental disclosure as measured by voluntary and timely disclosure. Relying on a multiple theory framework and using a sample of 81 French non-financial companies listed on the SBF 120 index covering the six-year period from 2012 to 2017, we found a positive and statistically significant relationship between the level of voluntary disclosure of environmental information and the environmental audit committee, the environmental auditor's BIG 4, debt levels, firm size, earnings management, and the industry. In addition, findings indicate that the environmental audit committee, CSR committee, the environmental auditor's BIG 4, earnings management, firm size, and the industry have an impact on the timely disclosure of environmental information. However, the regression of the results showed that there is no relationship between CSR committee and the level of the voluntary disclosure of environmental disclosure.

SUMMARY Under Rule 29, the Public Company Accounting Oversight Board (PCAOB) requires principal auditors to disclose the extent of use of other auditors on an audit engagement. This mandatory disclosure occurs on Form AP, available on the PCAOB's website. Principal auditors may voluntarily disclose this same information in an appendix to the audit report. We experimentally examine how the joint effects of the principal auditor's extent of use of other auditors and their use of voluntary disclosure influence investors' perceptions of audit quality. Results indicate that investors perceive audit quality to be lowest when principal auditors use other auditors to a greater extent and only file the mandatory disclosure. We find voluntary disclosure in the audit report attenuates the perceived effect of using other auditors. Additionally, after a restatement, investors place no additional blame or liability on principal auditors that use other auditors to a greater extent or choose voluntary disclosure.

The establishment of a company cannot be separated from its environmental and social factors. Sustainability reports start from those applied to current companies because there are forms of corporate accountability to stakeholders and community considerations of the company to provide social responsibility. This study finds out and empirically proves that there are differences in each Global Reporting Initiative (GRI) G4 indicator in the company’s sustainability report in each industry classification. The authors investigate the dominant indicators in each industry classification based on sustainability reports. The data are obtained from 28 GRI G4-based company sustainability reports in 2016 and 2017. The analytical method in the study is the K-means clustering analysis. The results of study indicate the differences in GRI G4 in 2016 and 2017. The researchers find out that the dominant indicator expressed in the financial industry is an economic indicator. Meanwhile, in the mining, transportation and infrastructure industries, basic and chemical industries etc. the dominant indicators to be disclosed are environmental indicators. This research provides a theoretical basis for sustainability and environmental reporting, particularly in the context of developing countries. It is expected that this study should also inform business practitioners as well as policymakers vis-à-vis sustainability reporting in practice.

In this study we analyse two Environmental Disclosure Indices (EDI), one obtained from the mandatory reporting (annual report) and the other from the voluntary reporting (sustainability report). More specifically, we construct these indices and compare their evolution. In addition, we examine if they are affected by industry, environmental certification, firm's operating performance and corporate governance attributes, namely the number and independence of board members. The legitamicy, signalling and voluntary disclosure theories are used to underpin the theoretical relationship between company's characteristics, corporate governance and environmental disclosure. Based on portuguese listed companies from 2015 to 2017, the results show an increase of 14.6% in the EDI obtained from the annual reports and 25.8% in EDI obtained from the sustainability reporting. In addition, the industry, environmental certification, lucratively, number of members of the board of directors and the ratio of independent members tend to affect the annual report EDI. Regarding the sustainability reporting EDI, the results are identical except for industry and number of board members. While this study brings some insights to such topical issue in Accounting, there is a scarcity of studies for Portuguese firms.

The research currently presented is related to non-financial reporting and the prevailing reporting practices employed by enterprises posing risks to the environment. The worldwide economy is in a continuous change and the companies must face all the new challenges to assure a good development of their business. One of the most pressing challenge is related to the reporting of information in an integrate form. It is considered that the traditional model of financial reporting does not represent a comprehensive image to assess the previous and future performance of a company. According to the Directive 2014/95/EU regulations, reporting of non-financial information encompasses three major areas: environmental, social, and labour. Each is equally important, though environmental issues seem of particular significance in enterprises posing risks to the environment. The natural environment and its protection are important from the viewpoint of future generations. The transition from voluntary disclosure of non-financial information to mandatory regulation in the EU has taken place due to continuous increasing needs to have more transparency and rigor of information disclosed by companies. Indeed, voluntary reporting of CSR has many aspects of weakness, it is difficult to compare the information of different companies; it is a tool to avoid regulation; lack of execution and accountability; and leads to rhetoric, as corporations continue to create many problems for society.

Economic incentives in the context of a particular type of market failure—asymmetric information (which takes place when quality information relating to treatment is not available to patients before purchasing the treatment)—are highly relevant to the understanding of the lack of clinics’ incentives to disclose reliable evidence (relating to treatment quality) in the practice of evidence-based medicine. Based on the case study of the UK in vitro fertilisation (IVF) sector, I show that inadequate quality provision (relating to treatment effectiveness and safety) can be associated with a lack of voluntary disclosure of reliable evidence in the practice of evidence-based medicine. In the absence of sufficient economic incentives on clinics to voluntarily acquire and disclose evidence, I discuss the rationale for legislation requiring mandatory evidence disclosure as a possible mechanism to facilitate the acquisition and revelation of evidence. I do so by drawing evidence from the economic literature relating to the impact of such legislation on firms’ quality improvement. Practical implications for implementation are discussed (and illustrated with examples in the context of the UK IVF sector) with the purpose to facilitate the role of regulators in setting the standards for evidence disclosure to improve interpretability of such evidence, together with the role of patients in engaging with clinics and verifying such evidence to improve its reliability and, ultimately, quality of care.

PurposeThe purpose of this paper is to investigate if market discipline and legal environment are sufficient to motivate firms to disclose optimal level of corporate information voluntarily in the context of a developing country that is Pakistan. Furthermore, it was examined if regulators have sufficient regulatory capacity to influence the extent up to which politically connected companies disclose corporate information.Design/methodology/approachAn in-depth investigation was carried out through qualitative content analysis of 200 annual reports from 40 companies listed on Karachi Stock Exchange along with 26 semi-structured interviews from experts in the field of corporate governance.FindingsFindings from the research indicated that there is an absence of culture for disclosure of information and country’s existing institutional environment is not sufficiently strong to support self-regulation or voluntary disclosure of information. It is argued that stringent disclosure regulation results in better flow of information in politically connected companies and helps in curbing opportunistic behaviour.Practical implicationsThis research carries significant policy implications. It is proposed that in addition to mandatory disclosure requirements, the code of corporate governance should indicate desirable disclosure levels for voluntary corporate information as well.Originality/valueThis is the first study to examine the effectiveness of role and usefulness of mandatory corporate disclosure regulation, voluntary disclosure practices, and capacity of regulators to enhance dissemination of corporate information in a developing country with high levels of political corruption and cronyism through an in-depth research.

The research on intangible assets and its contribution to the value creation of the firms has received significant attention in recent times. This paper attempts to estimate and analyse the nature and extent of overall Intellectual Capital Disclosure (ICD) and its sub-components in the annual reports of Information Technology (IT) industry in India for the FY 2017-18. It also attempts to examine whether Corporate Governance Characteristics of these firms influence their ICD. Multiple linear regression analysis is used to evaluate the data on information technology Industry. IT firms in India disclose a very high extent of Human capital; whereas the nature of disclosure is high in case of Structural Capital. The empirical evidence suggests that board size, its independence and ownership pattern of the firm play a significant role in the extent of overall intellectual capital disclosures in Indian IT firms. Keywords : Intellectual capital, Corporate Governance, Board Size, Information Technology, India. * Department of Economics University of Mumbai, Vidyanagari, Mumbai 400 098 https://doi.org/10.21632/irjbs.12.3.243-256

Purpose The purpose of this paper is to examine how a firm’s mergers and acquisitions (M&A) goals influence its voluntary disclosure policy. Specifically, this paper examines how a firm’s M&A financing intentions influence the degree of aggregation in management guidance prior to and after the M&A transaction. Design/methodology/approach Using a logistic model, this study tests the relation between M&A financing and the decision to issue disaggregate earnings guidance for 3,929 acquiring firms from 2007 to 2011. Findings The logistic regression results show that firms are more likely to provide disaggregate earnings guidance when using mostly stock to finance M&A and that the incentives to disaggregate guidance vary throughout the M&A transactional window. Alternatively, because the value of cash is independent of the true value of the acquirer, the results show that firms offering mostly cash to finance M&A are less likely to issue disaggregate earnings forecasts. Additional analysis reveals that the decision to issue disaggregate earnings guidance also influences post-merger outcomes such as CEO turnover. Research limitations/implications The choice to disaggregate earnings guidance and the choice to use stock as a means to finance an acquisition is made by management, thus are endogenous which could introduce bias. Originality/value This study provides insights into management’s incentives and attitudes toward the use of management forecasts to effect a potential merger and acquisition. Given the flexibility management has in issuing voluntary forecasts, management can tailor a financial message toward investors and potential targets in attempt to facilitate a merger and acquisition and to further the firm’s goals.

Purpose Integrated reporting (IR) aims to provide disclosures of the connectivity of non-financial and financial value creation aspects. These disclosures are defined as the disclosed connectivity of the capitals resulting from integrated thinking. This paper aims to investigate the extent of disclosed connectivity of the capitals in integrated reports and its underlying managerial discretion by drawing on economic-based theories. Design/methodology/approach Regression analyses are applied to examine the associations between economic firm-level characteristics and the extent of disclosed connectivity of the capitals. The analyses are based on a content analysis of 169 integrated reports disclosed in 2013 and 2014 by Forbes Global 2000 companies. Findings This paper finds high heterogeneity in the extent of disclosed connectivity of the capitals in current IR practice. This heterogeneity is related to drivers arising from economic-based theories. Firms’ non-financial and financial performance and the importance of strategic shareholders and debt providers are positively associated with the extent of disclosed connectivity of the capitals. The complexity of the business model and a highly competitive environment are negatively associated with the extent of disclosed connectivity of the capitals. Research limitations/implications This paper extends qualitative IR studies on the disclosed connectivity of the capitals by quantitative results from a content analysis for a cross-sectional and global sample. Additionally, this study adds to prior IR literature on the drivers of the binary decision to disclose an integrated report by focusing on the extent of disclosed connectivity of the capitals. Practical implications For report preparers, users and standard setters, the results reveal that perceived cost-benefit considerations (signaling vs. direct and proprietary costs) may explain managerial discretion regarding the connectivity of the capitals within integrated reports. Social implications This paper examines integrated reports, which are intended to inform providers of financial capital and other stakeholders about the connectivity of the six capitals of the IR framework. Originality/value This paper develops a metric disclosure measure of the extent of disclosed connectivity of the capitals. It provides initial evidence of how the IR framework’s focus on this key characteristic is realized in disclosure practice. Concerns about competitive disadvantages and preparation costs limit this key characteristic of integrated reports.

PurposeThe study aims to examine the simultaneous influence of corruption and culture on corporate social and environmental performance of selected companies.Design/methodology/approachTheoretical propositions on how corruption and culture influence corporate social responsibility performance were developed and empirically tested. Corruption is measured using Transparency International’s Corruption Perception Index and Schwartz (2008) cultural dimension is used as a measure of culture. Descriptive analysis was performed to provide the background statistics of the variables examined. This was followed by regression analysis which forms the main data analysis.FindingsThe multiple regression analysis results indicated that corruption and two of the three cultural dimensions (embeddedness and Mastery) are significantly related to corporate social responsibility performance.Originality/valueThe study contributes to the corporate social responsibility literature by revealing that corruption and culture are key determinants of corporate social responsibility performance.

This study presents a model of quality disclosure in which an incumbent, through its quality and disclosure choices, influences the potential that a new entrant enters the market. In this regard, we consider a sequential framework in which the incumbent chooses its quality and decides whether to disclose it to the market; subsequently, the entrant makes the same decisions, if it enters the market. We show that the potential competition can create strategic incentives for the incumbent to choose nondisclosure, because the availability of information about the incumbent's quality promotes entry by enhancing the entrant's expected profit from the market. In addition, an analysis of the effects of mandatory disclosure laws suggests that they can be effective in encouraging new market entrants and in improving the product quality of established firms.