Home About us Contact
|
Home About us Contact | ||
|
|
||
Voluntary Disclosure (voluntary + disclosure)
Selected AbstractsVoluntary Disclosure of Good and Bad Earnings News in a Low Litigation Setting,ACCOUNTING PERSPECTIVES, Issue 4 2008Philip T. Sinnadurai ABSTRACT This study uses a historical setting in which expected litigation costs were low (i.e., Australia, from 1993 to 1996) to investigate whether companies with good news were more likely to preempt annual earnings than their counterparts with bad news. Empirical tests compare the probability of preemption conditional on having good news with the probability of preemption conditional on having bad news. The models control for other potential determinants of disclosure policy that have been documented in the literature. The results do not support the research hypothesis that companies with good news were more likely to preempt annual earnings than companies with bad news. This finding suggests that there may be other factors driving disclosure of bad news, in addition to those acknowledged in the extant literature. The evidence also indicates that in Australia during the investigation period, the probability of preemption was positively associated with firm size and analyst following and differed as a function of industry membership. [source] Do Family Firms Provide More or Less Voluntary Disclosure?JOURNAL OF ACCOUNTING RESEARCH, Issue 3 2008SHUPING CHEN ABSTRACT We examine the voluntary disclosure practices of family firms. We find that, compared to nonfamily firms, family firms provide fewer earnings forecasts and conference calls, but more earnings warnings. Whereas the former is consistent with family owners having a longer investment horizon, better monitoring of management, and lower information asymmetry between owners and managers, the higher likelihood of earnings warnings is consistent with family owners having greater litigation and reputation cost concerns. We also document that family ownership dominates nonfamily insider ownership and concentrated institutional ownership in explaining the likelihood of voluntary disclosure. Using alternative proxies for the founding family's presence in the firm leads to similar results. [source] Voluntary Disclosure, Earnings Quality, and Cost of CapitalJOURNAL OF ACCOUNTING RESEARCH, Issue 1 2008JENNIFER FRANCIS ABSTRACT We investigate the relations among voluntary disclosure, earnings quality, and cost of capital. We find that firms with good earnings quality have more expansive voluntary disclosures (as proxied by a self-constructed index of coded items found in 677 firms' annual reports and 10-K filings in fiscal 2001) than firms with poor earnings quality. In unconditional tests, we find that more voluntary disclosure is associated with a lower cost of capital. However, consistent with the complementary association between disclosure and earnings quality, we find that the disclosure effect on cost of capital is substantially reduced or disappears completely (depending on the cost of capital proxy) once we condition on earnings quality. Extensions probing alternative proxies show that our findings are robust to measures of earnings quality and cost of capital, but not to other measures of voluntary disclosure. In particular, we find opposite relations for voluntary disclosure measures based on management forecasts and conference calls, and we find no relations for a press release based measure. [source] The Credibility of Voluntary Disclosure and Insider Stock TransactionsJOURNAL OF ACCOUNTING RESEARCH, Issue 4 2007FENG GU ABSTRACT We examine stock price reaction to voluntary disclosure of innovation strategy by high-tech firms and its relation with insider stock transactions before the disclosure. We find that, despite the qualitative and subjective nature of strategy-related disclosure, there is positive stock price reaction to the disclosure. The evidence suggests that investors view the disclosure as credible good news. We also find that the disclosure is associated with more positive stock price reaction when it is preceded by insider purchase transactions. This evidence is consistent with insider purchase enhancing the credibility of the disclosure. The credibility-enhancing effect is found to be stronger for firms with higher degrees of information asymmetry (younger firms, firms with lower analyst following, loss firms, and firms with higher research and development (R&D) intensity). Our evidence also indicates that predisclosure insider purchase is associated with greater future abnormal returns, suggesting that managers are privy to good news shortly before the disclosure. [source] Voluntary Disclosure by State-owned Enterprises Listed on the Stock Exchange of Hong KongJOURNAL OF INTERNATIONAL FINANCIAL MANAGEMENT & ACCOUNTING, Issue 2 2002Michael J. Ferguson This study examines the impact of international capital market pressures on the voluntary disclosure of three types of information (strategic, financial, and non-financial) in the annual reports of former wholly state-owned People's Republic of China (PRC) enterprises, listed on the Stock Exchange of Hong Kong (SEHK). Consistent with a costĀbenefit framework, we find that PRC H-Share firms disclose significantly more strategic and financial information than other SEHK firms. Additional analysis of disclosures in their home listings on the PRC exchanges, however, suggests an alternative explanation. The fact that these firms have been selected for "showcasing" in international capital markets may also play a role in our findings. While H-Share firm disclosures in the PRC also appear sensitive to management's assessment of the associated costs, the magnitude of differences across listing locations suggests that disclosure practices on the SEHK may also reflect the effects of state-encouraged disclosure policies. Our findings contribute to the understanding of disclosure behavior among former wholly state-owned enterprises and to the emerging literature on the efficacy of the privatization process. [source] Voluntary Disclosure of Mission Statements in Corporate Annual Reports: Signaling What and To Whom?BUSINESS AND SOCIETY REVIEW, Issue 1 2001David Campbell First page of article [source] Voluntary disclosure of operating incomeACCOUNTING & FINANCE, Issue 1 2010Jilnaught Wong M41 Abstract This study investigates whether New Zealand firms' voluntary disclosure of operating income, which is also known as earnings before interest and tax, in the income statement is related to the investment opportunity set. New Zealand provides an ideal setting to examine this because New Zealand generally accepted accounting principles do not require the disclosure of operating income as an intermediate income number in arriving at net income (earnings) in the income statement. We hypothesize and find evidence that firms with high assets-in-place and high leverage are more likely to voluntarily disclose operating income/earnings before interest and tax. However, the assets-in-place finding is sensitive to alternative measures of the investment opportunity set. [source] Ex Post Voluntary Disclosure Strategies for Insiders,CONTEMPORARY ACCOUNTING RESEARCH, Issue 4 2003Carolyn B. Levine Abstract Asymmetric information between corporate insiders and other market participants can lead to large bid-ask spreads or even a collapse of trade in financial markets. In this paper, we discuss how voluntary disclosure by insiders can remedy this problem. When insiders make disclosure decisions after they become informed, other market participants update their prior beliefs on the basis of both the information disclosed and the information not disclosed. Insiders then give up some or all of their information advantage to weakly increase their profits. These results do not rely on ex ante commitments on the part of the insiders. [source] The determinants and characteristics of voluntary disclosure by Indian banking companiesCORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTAL MANAGEMENT, Issue 5 2007Mohammed Hossain Abstract This study reports the results of an empirical investigation of the extent of voluntary disclosure by 38 listed banking companies in India. It also reports the results of the association between company specific characteristics and voluntary disclosure of the sample companies. The study reveals that Indian banks are disclosing a considerable amount of voluntary information. The findings also indicate that size and assets-in-place are significant and other variables such as age, diversification, board composition, multiple exchange listing and complexity of business are insignificant in explaining the level of disclosure. However, this paper has contributed to the academic literature that financial institutions provide voluntary corporate information including social information as discharging their social responsibility and corporate citizenship. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment. [source] Voluntary disclosure of operating incomeACCOUNTING & FINANCE, Issue 1 2010Jilnaught Wong M41 Abstract This study investigates whether New Zealand firms' voluntary disclosure of operating income, which is also known as earnings before interest and tax, in the income statement is related to the investment opportunity set. New Zealand provides an ideal setting to examine this because New Zealand generally accepted accounting principles do not require the disclosure of operating income as an intermediate income number in arriving at net income (earnings) in the income statement. We hypothesize and find evidence that firms with high assets-in-place and high leverage are more likely to voluntarily disclose operating income/earnings before interest and tax. However, the assets-in-place finding is sensitive to alternative measures of the investment opportunity set. [source] Auditor conservatism and voluntary disclosure: Evidence from the Year 2000 systems issueACCOUNTING & FINANCE, Issue 1 2003Peter M. Clarkson This study further examines the phenomenon of conservative auditor behaviour by considering the level of voluntary disclosure of Year 2000 remediation information in company annual reports. Previous studies have provided evidence of conservative auditor behaviour by examining the link between Big 6 auditor choice and accruals (Francis and Krishnan 1999; Becker et al., 1998; Defond and Subramanyam 1998). Protecting their reputation capital increases Big 6 auditor incentives to act conservatively to avoid litigation risk. We propose and find that Big 6 auditor clients disclose more Year 2000 remediation information than non,Big 6 auditor clients. [source] Do Family Firms Provide More or Less Voluntary Disclosure?JOURNAL OF ACCOUNTING RESEARCH, Issue 3 2008SHUPING CHEN ABSTRACT We examine the voluntary disclosure practices of family firms. We find that, compared to nonfamily firms, family firms provide fewer earnings forecasts and conference calls, but more earnings warnings. Whereas the former is consistent with family owners having a longer investment horizon, better monitoring of management, and lower information asymmetry between owners and managers, the higher likelihood of earnings warnings is consistent with family owners having greater litigation and reputation cost concerns. We also document that family ownership dominates nonfamily insider ownership and concentrated institutional ownership in explaining the likelihood of voluntary disclosure. Using alternative proxies for the founding family's presence in the firm leads to similar results. [source] Voluntary Disclosure, Earnings Quality, and Cost of CapitalJOURNAL OF ACCOUNTING RESEARCH, Issue 1 2008JENNIFER FRANCIS ABSTRACT We investigate the relations among voluntary disclosure, earnings quality, and cost of capital. We find that firms with good earnings quality have more expansive voluntary disclosures (as proxied by a self-constructed index of coded items found in 677 firms' annual reports and 10-K filings in fiscal 2001) than firms with poor earnings quality. In unconditional tests, we find that more voluntary disclosure is associated with a lower cost of capital. However, consistent with the complementary association between disclosure and earnings quality, we find that the disclosure effect on cost of capital is substantially reduced or disappears completely (depending on the cost of capital proxy) once we condition on earnings quality. Extensions probing alternative proxies show that our findings are robust to measures of earnings quality and cost of capital, but not to other measures of voluntary disclosure. In particular, we find opposite relations for voluntary disclosure measures based on management forecasts and conference calls, and we find no relations for a press release based measure. [source] The Credibility of Voluntary Disclosure and Insider Stock TransactionsJOURNAL OF ACCOUNTING RESEARCH, Issue 4 2007FENG GU ABSTRACT We examine stock price reaction to voluntary disclosure of innovation strategy by high-tech firms and its relation with insider stock transactions before the disclosure. We find that, despite the qualitative and subjective nature of strategy-related disclosure, there is positive stock price reaction to the disclosure. The evidence suggests that investors view the disclosure as credible good news. We also find that the disclosure is associated with more positive stock price reaction when it is preceded by insider purchase transactions. This evidence is consistent with insider purchase enhancing the credibility of the disclosure. The credibility-enhancing effect is found to be stronger for firms with higher degrees of information asymmetry (younger firms, firms with lower analyst following, loss firms, and firms with higher research and development (R&D) intensity). Our evidence also indicates that predisclosure insider purchase is associated with greater future abnormal returns, suggesting that managers are privy to good news shortly before the disclosure. [source] Voluntary Disclosure by State-owned Enterprises Listed on the Stock Exchange of Hong KongJOURNAL OF INTERNATIONAL FINANCIAL MANAGEMENT & ACCOUNTING, Issue 2 2002Michael J. Ferguson This study examines the impact of international capital market pressures on the voluntary disclosure of three types of information (strategic, financial, and non-financial) in the annual reports of former wholly state-owned People's Republic of China (PRC) enterprises, listed on the Stock Exchange of Hong Kong (SEHK). Consistent with a costĀbenefit framework, we find that PRC H-Share firms disclose significantly more strategic and financial information than other SEHK firms. Additional analysis of disclosures in their home listings on the PRC exchanges, however, suggests an alternative explanation. The fact that these firms have been selected for "showcasing" in international capital markets may also play a role in our findings. While H-Share firm disclosures in the PRC also appear sensitive to management's assessment of the associated costs, the magnitude of differences across listing locations suggests that disclosure practices on the SEHK may also reflect the effects of state-encouraged disclosure policies. Our findings contribute to the understanding of disclosure behavior among former wholly state-owned enterprises and to the emerging literature on the efficacy of the privatization process. [source] The Real Estate Brokerage Market and the Decision to Disclose Property Condition DefectsREAL ESTATE ECONOMICS, Issue 4 2008Jonathan A. Wiley This article presents a theoretical model of the decision to disclose property condition defects by a real estate broker. The model introduces the costs and benefits of disclosure into the broker's profit function. The comparative static results of the model show that a number of factors will have a deterministic influence on the broker's expected profit and, hence, the broker's decision to disclose. Whether voluntary disclosure occurs depends upon the costs of repairing the defect, prevailing market conditions, commission rates and the legal environment in which the broker operates. [source] Intra- and intersectoral effects in environmental disclosures: evidence for legitimacy theory?BUSINESS STRATEGY AND THE ENVIRONMENT, Issue 6 2003David Campbell Environmental disclosures were recorded from the annual reports of a sample of ten UK FTSE 100 companies in five sectors between 1974 and 2000. ,Environmental sensitivity' was employed as a proxy for corporate vulnerability to environmental concern, and intra- and intersectoral differences were tested for in the belief that difference in industry response will signify differing perceptions on the need to provide voluntary disclosure and hence restore or maintain legitimacy. Intrasectoral agreements at given points in time were also taken to be evidence for legitimacy theory in that more than one company in a sector perceived a need to change disclosure behaviour at the same time. Legitimacy theory as an explicator for variability in environmental disclosure is supported. Copyright © 2003 John Wiley & Sons, Ltd and ERP Environment. [source] "It's 10 O'Clock: Do You Know Where Your Children Are?"CHILD DEVELOPMENT PERSPECTIVES, Issue 1 2008Adolescents' Information Management, Recent Advances in Understanding Parental Monitoring ABSTRACT,Recent research has challenged the established conclusion that vigilant parental monitoring is associated with less externalizing behavior among adolescents. Measures of parental monitoring typically have focused on parents' knowledge of their children's whereabouts, not on parents' active surveillance. Recent research, which controls for parent,adolescent relationships, finds that adolescents' voluntary disclosure to parents about their activities, associates, and whereabouts is more important than previously recognized in predicting parental knowledge and, in turn, reducing teens' involvement in risky behavior. This article reviews recent research on how parents obtain knowledge of their adolescents' activities and how adolescents manage that information. The article also highlights the importance of reciprocal parent,adolescent processes. Directions for future research are discussed. [source] Corporate environmental disclosures about the effects of climate changeCORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTAL MANAGEMENT, Issue 6 2008Elizabeth Stanny Abstract We examine factors associated with the US S&P 500 firms' decisions to disclose information about the current and projected effects of climate change to institutional investors. Through the Carbon Disclosure Project, 315 institutional investors representing 41 trillion USD in assets asked the largest public firms to respond to a questionnaire about climate change. We explore whether firms' disclosures directed specifically to institutional investors are related to factors that have been found to explain voluntary disclosures to investors in general. In particular, we consider factors related to the level of scrutiny, since extant literature predicts that the cost of not disclosing increases with level of scrutiny. We find that size, previous disclosures and foreign sales are related to whether firms disclose information about climate change requested by institutional investors through the Carbon Disclosure Project. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment. [source] Voluntary Disclosure, Earnings Quality, and Cost of CapitalJOURNAL OF ACCOUNTING RESEARCH, Issue 1 2008JENNIFER FRANCIS ABSTRACT We investigate the relations among voluntary disclosure, earnings quality, and cost of capital. We find that firms with good earnings quality have more expansive voluntary disclosures (as proxied by a self-constructed index of coded items found in 677 firms' annual reports and 10-K filings in fiscal 2001) than firms with poor earnings quality. In unconditional tests, we find that more voluntary disclosure is associated with a lower cost of capital. However, consistent with the complementary association between disclosure and earnings quality, we find that the disclosure effect on cost of capital is substantially reduced or disappears completely (depending on the cost of capital proxy) once we condition on earnings quality. Extensions probing alternative proxies show that our findings are robust to measures of earnings quality and cost of capital, but not to other measures of voluntary disclosure. In particular, we find opposite relations for voluntary disclosure measures based on management forecasts and conference calls, and we find no relations for a press release based measure. [source] The Nature of the Interaction between Mandatory and Voluntary DisclosuresJOURNAL OF ACCOUNTING RESEARCH, Issue 4 2005ETI EINHORN ABSTRACT This paper demonstrates the crucial role that firms' mandatory disclosures play in determining their voluntary disclosure strategies. It also shows how a firm's propensity for providing voluntary disclosures relates to various features of the mandatory disclosure environment and disclosure regulation. The special case of choosing between aggregated and disaggregated disclosures serves as an illustration of the model's applicability. [source] Confirming Management Earnings Forecasts, Earnings Uncertainty, and Stock ReturnsJOURNAL OF ACCOUNTING RESEARCH, Issue 4 2003Michael Clement In this study we examine the association among confirming management forecasts, stock prices, and analyst expectations. Confirming management forecasts are voluntary disclosures by management that corroborate existing market expectations about future earnings. This study provides evidence that these voluntary disclosures affect stock prices and the dispersion of analyst expectations. Specifically, we find that the market's reaction to confirming forecasts is significantly positive, indicating that benefits accrue to firms that disclose such forecasts. In addition, although we find no significant change in the mean consensus forecasts (a proxy for earnings expectations) around the confirming forecast date, evidence indicates a significant reduction in the mean and median consensus analyst dispersion (a proxy for earnings uncertainty). Finally, we document a positive association between the reduction of dispersion of analysts' forecasts and the magnitude of the stock market response. Overall, the evidence suggests that confirming forecasts reduce uncertainty about future earnings and that investors price this reduction of uncertainty. [source] Factors influencing the quality of corporate environmental disclosureBUSINESS STRATEGY AND THE ENVIRONMENT, Issue 2 2008Stephen Brammer Abstract Many firms choose to communicate their environmental strategies through voluntary environmental disclosures. This paper examines patterns in the quality of voluntary environmental disclosures made by a sample of around 450 large UK companies drawn from a diverse range of industrial sectors. The analysis distinguishes between five facets of quality, including the disclosure of group-wide environmental policies, environmental impact targets and an environmental audit. We examine how the decisions firms face regarding each facet of quality are determined by firm and industry characteristics, and find the quality of disclosure to be determined by a firm's size and the nature of its business activities. Specifically, we find high quality disclosure to be primarily associated with larger firms and those in sectors most closely related to environmental concerns. In contrast to several recent contributions, we find that the media exposure of companies plays no role in stimulating voluntary disclosures. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment. [source] | |||||||||||||