A study on the extent of voluntary disclosure in a Middle Eastern nation: Evidence from companies listed on the Tehran Stock Exchange

TLDR: In this article, the authors evaluated the extent of corporate voluntary disclosure and the impact of company characteristics (board composition, leverage, firm size, auditor type, ownership structure and profitability) on the level of voluntary disclosure in Tehran Stock Exchange.

Abstract: This paper evaluates the extent of corporate voluntary disclosure and the impact of company characteristics (board composition, leverage, firm size, auditor type, ownership structure and profitability) on the level of corporate voluntary disclosure in Tehran Stock Exchange. A voluntary disclosure checklist contains information of 64 non-mandatory items is developed and statistical analysis is accomplished employing multiple regression analysis to assess the link between descriptive variables and voluntary disclosure and employing an unweighted relative disclosure index for measuring voluntary disclosure for a sample of 93 non-financial firms and fifteen category, out of thirty seven industry which was gathered from a manual review of financial statements and websites of a sample of Iranian companies listed on TSE in 2012. The study documents substantial positive association between Auditor type and voluntary disclosure, while the ownership structure and profitability are negatively relevant to the level of voluntary disclosure. Nevertheless, Iran as an emerging equity market, demand for increased foreign and domestic investment and this research seeks to make theoretical and practical contributions for more assurance of the investors by determining the level of voluntary corporate information in an emerging equity market in a Middle Eastern nation.