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Voluntary disclosures practices of family firms in Australia

Judy Louie (Department of Accounting, La Trobe University, Melbourne, Australia)
Kamran Ahmed (Department of Accounting, La Trobe University, College of Arts Social Sciences and Commerce, Bundoora, Australia)
Xu-Dong Ji (Xi’an Jiaotong-Liverpool University, Suzhou, P.R. China)

Accounting Research Journal

ISSN: 1030-9616

Article publication date: 1 July 2019

Abstract

Purpose

This paper aims to examine the voluntary disclosure practices of family and non-family listed firms and whether family firms have improved their disclosure practices following the introduction of the Principles of Good Corporate Governance and Best Practice Recommendations in 2003 in Australia.

Design/methodology/approach

Voluntary disclosures are measured by constructing an index specifically for this study. Such indexes consist of corporate governance disclosure, strategic disclosure and future disclosures. They are then regressed on firm-specific variables while controlling for family and non-family firms. A total of 60 family firms and 60 non-family firms in Australia are randomly chosen from 2001 to 2006 for examining their disclosure practices.

Findings

The research findings show that family firms disclose information voluntarily to signal to the market regarding their growth potentials and abide by government regulations to improve their reputation. Despite the fact that compliance with the Principles of Good Corporate Governance and Best Practice Recommendations was not compulsory, this paper finds that the recommendation encouraged family and non-family firms to disclose more corporate governance information.

Practical implications

The findings from this research will help investors and regulators make more strategic decisions on investments and regulations respectively in family firms.

Originality/value

There has been limited empirical evidence on the disclosure practices and their determinants of family firms in Australia. The study will thus significantly contribute to the current knowledge in this regard.

Keywords

Citation

Louie, J., Ahmed, K. and Ji, X.-D. (2019), "Voluntary disclosures practices of family firms in Australia", Accounting Research Journal, Vol. 32 No. 2, pp. 273-294. https://doi.org/10.1108/ARJ-04-2016-0042

Publisher

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Emerald Publishing Limited

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