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Article
Publication date: 8 June 2020

Saoussen Boujelben and Chourouk Boujelben

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…

Abstract

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.

Details

Journal of Financial Reporting and Accounting, vol. 18 no. 3
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 30 September 2019

Ratna Wardhani

The purpose of this paper is to investigate the role of the auditor in enhancing the market consequences of voluntary disclosure in East Asian countries that have different…

Abstract

Purpose

The purpose of this paper is to investigate the role of the auditor in enhancing the market consequences of voluntary disclosure in East Asian countries that have different reporting environments. This study also investigates the effect of quality of the reporting environment on the role of the auditor in enhancing market consequences of voluntary disclosure.

Design/methodology/approach

The methodology used in this research is multiple regressions using the least square method. This research uses East Asian countries context that covers India, Indonesia, Japan, Malaysia, the Philippines, Singapore and Thailand with cross-sectional data during 2016. This research uses four measurements of market consequences, namely, cumulative abnormal return (CAR), volatility of return, bid-ask spread and trading volume.

Findings

The results show that voluntary disclosure gives positive consequences to the capital market by increasing the CAR, volatility of return and average trading volume, and decreasing asymmetric information. The results also show that auditor plays a significant role in increasing the credibility of voluntary disclosure by increasing the market consequences of disclosure. The role of the auditor in increasing the effect of voluntary disclosure is higher in a country that adopts international best practice in financial reporting.

Research limitations/implications

The findings of this study need to be interpreted with caution due to several limitations. Although the measurement of voluntary disclosure used in this study is relatively more complete compared to previous research, there are still much voluntary information disclosed that are not included in the checklist. Moreover, this study only considers voluntary disclosure in the annual report. Therefore, future studies can develop a more comprehensive measurement of voluntary disclosure and use sources of information beyond the annual report.

Practical implications

This study shows that in a reporting environment that is less transparent as in the conditions of countries in East Asia, voluntary disclosure and the role of the auditor in increasing value of voluntary disclosure for market participants is crucial. Companies need to increase their voluntary disclosures as they become additional provisions in improving the reporting environment and consider the result of this study when choosing the auditor. Second, audit quality is more important in increasing the credibility of voluntary disclosure in countries that adopt international best practices in financial reporting. The result of this study implies that audit quality is a complementary mechanism of the reporting environment.

Originality/value

This study expands the literature of the role of the auditor on the market consequences of voluntary disclosures and explores the role of the auditor in different reporting environment across countries in East Asia. This study shows that auditor increases the credibility of voluntary disclosure in the different context of accounting and auditing practices.

Details

Asian Review of Accounting, vol. 27 no. 3
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 15 February 2013

Abdifatah Ahmed Haji and Nazli Anum Mohd Ghazali

The aim of this study is to investigate the quality of voluntary disclosure practices by Shari'ah compliant companies (ShCCs) in Malaysia. The study also examines factors…

2075

Abstract

Purpose

The aim of this study is to investigate the quality of voluntary disclosure practices by Shari'ah compliant companies (ShCCs) in Malaysia. The study also examines factors influencing the quality of voluntary disclosures.

Design/methodology/approach

Using a weighted disclosure analyses approach, a self‐constructed disclosure checklist was developed to measure the quality of corporate voluntary disclosures (CVDs). The study examines the annual reports of a sample of 76 ShCCs selected from various sectors listed on Bursa Malaysia in the year 2009.

Findings

The results indicate that the quality of voluntary disclosures by ShCCs is in overall low consistent with prior studies that gauged the quality of CVDs in Malaysia. The multivariate regression analyses reveal that board size is significant in explaining the quality of CVDs at the 5 percent significance levels. Company size and leverage as control variables are also significant at the 1 and 10 percent significance levels in determining the quality of CVDs by ShCCs. The reduced regression model further indicates that government ownership is highly significant at the 1 percent significance level in explaining the quality of CVD by ShCCs while leverage is significant at the 5 percent levels.

Practical implications

The low level of corporate disclosures by the ShCCs in Malaysia suggests that these companies require awareness on matters relating to the concepts of accountability and full disclosures in becoming accountable to the community. Hence, the Shari'ah Advisory Council of the Securities Commission Malaysia should provide awareness on matters relating to accountability and transparency which could lead to socio economic justice. The commission may also introduce a detailed reporting guideline for the companies to follow.

Originality/value

This study provides useful insights on the disclosure quality of ShCCs in Malaysia which remained largely unexplored. The study also represents the first empirical investigation toward the association between voluntary disclosures by ShCCs and corporate governance attributes in the Malaysian context.

Article
Publication date: 2 May 2017

Si Jie Lim, Gregory White, Alina Lee and Yuni Yuningsih

This paper aims to measure mean voluntary intellectual capital disclosure (ICD) quality score for a sample of Australian Stock Exchange-listed biotechnology firms in the 2003…

1284

Abstract

Purpose

This paper aims to measure mean voluntary intellectual capital disclosure (ICD) quality score for a sample of Australian Stock Exchange-listed biotechnology firms in the 2003, 2006 and 2010 reporting periods. The aim was to use data for the same companies over the whole period to discover whether the quality of voluntary reporting practice was improving over time, measuring lagged-mean ICD quality score against possible determinants of management disclosure practice.

Design/methodology/approach

Mean ICD quality score, and associated frequency data, was measured against possible determinants of managers’ disclosure practice. The dependent variable was an 18-item classification of ICD based on Sveiby’s Intangible Assets Monitor (Sveiby, 1997). Data collected from S&P Capital IQ database were used to compare ICD disclosure quality with possible drivers: competition (capital intensity); performance (profit and market returns); monitoring (audit firm and ownership); and control variables (revenue and leverage).

Findings

Mean voluntary disclosures of internal capital and external capital lower the quality over time using paired sample t-test comparison against 2003 as a base year. The lowest quality disclosure was about human capital, and the highest quality was about internal capital. Individual disclosure items within internal, external and human capital classification showed that internal capital items (intellectual property, corporate culture, management processes and financial relations) and external capital item (customers) were the significant contributors. Investigation of drivers using Spearman’s correlation against lagged ICD data showed that performance (relative market returns) and monitoring (ownership diffusion) were significant drivers of voluntary ICD, both in expected and unexpected ways.

Originality/value

Voluntary ICD quality and quantity are rarely measured in the same paper. The findings are unique and interesting especially for innovative Australian R&D firms when compared to recent findings for a larger sample of French companies.

Details

Accounting Research Journal, vol. 30 no. 01
Type: Research Article
ISSN: 1030-9616

Keywords

Article
Publication date: 1 April 2022

Kathyayini Kathy Rao, Roger Leonard Burritt and Katherine Christ

There is a growing concern over the need for greater transparency of quality information by companies about modern slavery to contribute toward elimination of the practice. Hence…

1053

Abstract

Purpose

There is a growing concern over the need for greater transparency of quality information by companies about modern slavery to contribute toward elimination of the practice. Hence, this paper aims to examine factors behind the quality of voluntary modern slavery disclosures and major sources of pressure on Australian company disclosures in a premodern slavery legislated environment.

Design/methodology/approach

Content analysis and cross- sectional regression modeling are conducted to analyze factors determining the quality of voluntary modern slavery disclosures of the top 100 firms listed on the Australian Stock Exchange and their implications for institutional pressures.

Findings

Results indicate that size, assurance by Big-4 firms and publication of stand-alone modern slavery statements are significant drivers of disclosure quality in the sample. Profitability, listing status and the degree of internationalization are found to be unrelated to the quality of voluntary modern slavery disclosures. Industry classification is significant but only partly supports the prediction, and further investigation is recommended.

Practical implications

This paper provides a foundation for regulators and companies toward improving the quality of their modern slavery risk disclosures with a particular focus on prior experience, assurance and size. In practice, contrary to suggestions in the literature, results indicate that monetary penalties are unlikely to be an effective means for improving the quality of modern slavery disclosure. Results of the study provide evidence of poor quality of disclosures and the need for improvement, prior to introduction of modern slavery legislation in Australia in 2018. It also confirms that regulation to improve transparency, through the required publication of a modern slavery statement, is significant but not enough on its own to increase disclosure quality.

Originality/value

To the best of the authors’ knowledge, this is the first research examining company level factors with an impact on voluntary modern slavery disclosure quality and the links to institutional pressures, prior to the introduction of the Commonwealth Modern Slavery Act 2018.

Details

Pacific Accounting Review, vol. 34 no. 3
Type: Research Article
ISSN: 0114-0582

Keywords

Open Access
Article
Publication date: 16 January 2017

Collins G. Ntim, Teerooven Soobaroyen and Martin J. Broad

The purpose of this paper is to investigate the extent of voluntary disclosures in UK higher education institutions’ (HEIs) annual reports and examine whether internal governance…

15953

Abstract

Purpose

The purpose of this paper is to investigate the extent of voluntary disclosures in UK higher education institutions’ (HEIs) annual reports and examine whether internal governance structures influence disclosure in the period following major reform and funding constraints.

Design/methodology/approach

The authors adopt a modified version of Coy and Dixon’s (2004) public accountability index, referred to in this paper as a public accountability and transparency index (PATI), to measure the extent of voluntary disclosures in 130 UK HEIs’ annual reports. Informed by a multi-theoretical framework drawn from public accountability, legitimacy, resource dependence and stakeholder perspectives, the authors propose that the characteristics of governing and executive structures in UK universities influence the extent of their voluntary disclosures.

Findings

The authors find a large degree of variability in the level of voluntary disclosures by universities and an overall relatively low level of PATI (44 per cent), particularly with regards to the disclosure of teaching/research outcomes. The authors also find that audit committee quality, governing board diversity, governor independence and the presence of a governance committee are associated with the level of disclosure. Finally, the authors find that the interaction between executive team characteristics and governance variables enhances the level of voluntary disclosures, thereby providing support for the continued relevance of a “shared” leadership in the HEIs’ sector towards enhancing accountability and transparency in HEIs.

Research limitations/implications

In spite of significant funding cuts, regulatory reforms and competitive challenges, the level of voluntary disclosure by UK HEIs remains low. Whilst the role of selected governance mechanisms and “shared leadership” in improving disclosure, is asserted, the varying level and selective basis of the disclosures across the surveyed HEIs suggest that the public accountability motive is weaker relative to the other motives underpinned by stakeholder, legitimacy and resource dependence perspectives.

Originality/value

This is the first study which explores the association between HEI governance structures, managerial characteristics and the level of disclosure in UK HEIs.

Details

Accounting, Auditing & Accountability Journal, vol. 30 no. 1
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 24 April 2007

Giacomo Boesso and Kamalesh Kumar

The purpose of this paper is to examine what factors in addition to the needs of financial markets drive the voluntary disclosure practices of companies in Italy and in the United…

10480

Abstract

Purpose

The purpose of this paper is to examine what factors in addition to the needs of financial markets drive the voluntary disclosure practices of companies in Italy and in the United States.

Design/methodology/approach

Information provided in the management discussion and analysis section of the annual reports of 72 companies was content analyzed to determine the volume and the quality of voluntary disclosures.

Findings

Results show that in addition to investors' information needs, factors such as company emphasis on stakeholder management, relevance of intangible asset, and market complexity affect both the volume as well as the quality of voluntary disclosures.

Research limitations/implications

The study is based on the voluntary disclosures made in a single year, which makes this study a snapshot. The size of the sample used in this study is relatively small. Future research aimed at examining country differences in voluntary disclosures made by companies needs to examine the business contexts in a comprehensive manner, so that differences observed across country boundaries can be adequately explained.

Practical implications

The comprehensive framework developed in this study for organizing and evaluating voluntary disclosures is an initial step in the direction of examining voluntary disclosure from the stakeholder perspective.

Originality/value

While results of this study confirm the findings of previous researchers, they also identify new drivers of voluntary disclosures and give some evidence about the similarity and differences in these factors across country contexts.

Details

Accounting, Auditing & Accountability Journal, vol. 20 no. 2
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 21 May 2018

Emilio Passetti, Lino Cinquini and Andrea Tenucci

The purpose of this paper is to investigate to what extent the implementation of internal environmental management and voluntary environmental information is related to…

3338

Abstract

Purpose

The purpose of this paper is to investigate to what extent the implementation of internal environmental management and voluntary environmental information is related to organisational change.

Design/methodology/approach

Organisational change literature provided a framework for the analysis of the materials which were collected through a mixed method. Data on internal environmental management were collected through a survey, while a quality disclosure index was used to assess the quality of the environmental voluntary disclosure. Interviews were used to enhance the quantitative results interpreted according to the four pathways proposed by Tilt (2006) and characterised by several levels of internal environmental management and voluntary disclosure.

Findings

The results indicated that companies implement more internal activities than external disclosure. Environmental planning and operational practices were the most important changes carried out. When environmental management accounting and environmental disclosure were also implemented, environmental aspects were more integrated within companies, thus revealing that a more structured integration of sustainability aspects within organisational values had taken place. The results underline the importance of primarily establishing a set of internal changes, driven by environmental planning, to promote organisational change.

Research limitations/implications

The study presents a larger empirical analysis of the organisational change pathways followed by companies, showing similarities and differences among the four pathways. The results underline the importance of both dimensions for studying organisational changes. The framework of Tilt has been enriched, considering a more precise explanation of the internal aspects and adding the concept of the quality of disclosure as proxy to assess organisational change.

Originality/value

Organisational change is investigated through an extensive analysis of internal and external aspects and collecting quantitative and qualitative evidence. The analysis complements previous sustainability accounting literature focussed on the analysis of internal environmental management and external disclosure.

Details

Accounting, Auditing & Accountability Journal, vol. 31 no. 4
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 12 October 2012

Tariq H. Ismail and Nesma M. El‐Shaib

The purpose of this paper is to investigate the impact of market and organizational determinants on the voluntary disclosure level of Egyptian companies.

1253

Abstract

Purpose

The purpose of this paper is to investigate the impact of market and organizational determinants on the voluntary disclosure level of Egyptian companies.

Design/methodology/approach

Uses a disclosure index of voluntary disclosure that is based upon the following information categories: strategic information; financial information; non‐financial information; and future prospect information to rate the level of disclosure. Multivariate analysis, voluntary disclosure determinants: earnings quality; ownership structure; competition intensity; information asymmetry, and possible relationships with disclosure level provide the basis for discussion.

Findings

It is found that the level of voluntary disclosure in the emerging market of Egypt ranges from low to moderate level. There is no significant relationship between a company's voluntary disclosure level and earnings quality and competition intensity, while this relationship is significant for information asymmetry and ownership structure.

Research limitations/implications

The results are constrained by the proxies that represent non‐financial factors of the market.

Originality/value

This paper extends prior studies on voluntary disclosure in Egypt by looking at a comprehensive set of market and organizational factors that might affect the disclosure level, based on a structured disclosure index of strategic, financial and non‐financial, and future prospect information. The findings would help boards of directors to explain the adoption of certain disclosure strategies, and understand the corporate disclosure behavior.

Article
Publication date: 31 August 2022

Anis Jarboui and Marwa Moalla

This study aims to examine the moderating effect of media exposure and media legitimacy on the environmental audit committee (EAC) regarding environmental disclosure quality as…

Abstract

Purpose

This study aims to examine the moderating effect of media exposure and media legitimacy on the environmental audit committee (EAC) regarding environmental disclosure quality as measured by voluntary and timely disclosure.

Design/methodology/approach

This paper was based on a sample of 81 French nonfinancial companies listed on the SBF 120 index and covered a six-year period; from 2014 to 2019. To test the hypotheses, a feasible generalized least squares regression was applied. Moreover, the authors checked the results using an additional analysis and the generalized method of moment model for endogeneity problems.

Findings

The results obtained show that for 482 French firm-year observations during the period 2014–2019, the media exposure does not play a moderating role between the EAC and the voluntary environmental disclosure; However, it plays a moderating role between the EAC and the timely environmental disclosure. The results also show that media legitimacy plays a moderating role between the EAC and the quality of environmental information. After testing for endogeneity problems, the findings remain unchanged.

Research limitations/implications

The findings of this study may be of interest to academic researchers, practitioners and regulators who are interested in determining the quality of environmental disclosure by considering the role of the EAC while giving a role to media exposure and media legitimacy in the French context. Considering the EAC as a powerful source of effective corporate governance to improve the quality of environmental disclosure for decision-making, the research provides valuable insights for policymakers and managers on the importance of this mechanism and the importance of the environmental media and its tone in making environmental reporting useful and relevant.

Originality/value

The originality of the work lies in the fact that it is one of the first works that deal with the moderating effect of media exposure on the relationship between the EAC and the quality of environmental information disclosure measured by voluntary and timely disclosure. To the best of the authors’ knowledge, no previous empirical studies have been conducted on this relationship in the French context or in other contexts.

Details

Journal of Financial Reporting and Accounting, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1985-2517

Keywords

1 – 10 of over 10000