The influence of company characteristics and accounting regulation on information disclosed by Spanish firms
TL;DR: In this paper, the influence of market pressures and pressure from regulatory bodies on information disclosure by Spanish firms is analyzed. But the authors do not consider the impact of positive accounting theory on the disclosure of information.
Abstract: Accounting information is subject to two different influences: market pressures and pressure from regulatory bodies. This paper provides an empirical analysis of the influence of both these forces on information disclosure by Spanish firms. To test hypotheses concerning the influence of regulation, annual reports of three different years for 49 companies have been analysed. Given that new Spanish accounting rules have been in force since 1990, annual accounts of a sample of quoted companies have been analysed for the period 1989–1991. In order to consider the influence of positive accounting theory, several characteristics relating to company attributes were selected and tested empirically for the sample of 49 companies. The information disclosed by the sample companies was measured through an information index, based on a list of 50 items of information, and it was regressed on the variables related to company characteristics. The influence of regulation was analysed through a panel data analysis includi...
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TL;DR: In this paper, the authors analyze whether a number of firm and industry characteristics, as well as media exposure, are potential determinants of corporate social responsibility disclosure practices by Spanish listed firms.
Abstract: The aim of this paper is to analyze whether a number of firm and industry characteristics, as well as media exposure, are potential determinants of corporate social responsibility (CSR) disclosure practices by Spanish listed firms. Empirical studies have shown that CSR disclosure activism varies across companies, industries, and time (Gray et al., Accounting, Auditing & Accountability Journal
8(2), 47–77, 1995; Journal of Business Finance & Accounting
28(3/4), 327–356, 2001; Hackston and Milne, Accounting, Auditing & Accountability Journal
9(1), 77–108, 1996; Cormier and Magnan, Journal of International Financial Management and Accounting
1(2), 171–195, 2003; Cormier et al., European Accounting Review
14(1), 3–39, 2005), which is usually justified by reference to several theoretical constructs, such as the legitimacy, stakeholder, and agency theories. Our findings evidence that firms with higher CSR ratings present a statistically significant larger size and a higher media exposure, and belong to more environmentally sensitive industries, as compared to firms with lower CSR ratings. However, neither profitability nor leverage seem to explain differences in CSR disclosure practices between Spanish listed firms. The most influential variable for explaining firms’ variation in CSR ratings is media exposure, followed by size and industry. Therefore, it seems that the legitimacy theory, as captured by those variables related to public or social visibility, is the most relevant theory for explaining CSR disclosure practices of Spanish listed firms.
993 citations
TL;DR: In this article, the authors investigate the extent to which corporate governance attributes, ownership structure and company characteristics influence the extent of voluntary disclosure in a developing country, namely Kenya, and find that the presence of an audit committee is a significant factor associated with the level of disclosure.
Abstract: There has been considerable research in respect of voluntary disclosure by companies and factors that may explain such disclosure. However, most of the research has been centred in developed countries. This study extends the previous literature by examining voluntary disclosure in a developing country, namely Kenya. Over the last decade, the Kenyan Government has initiated several far-reaching reforms at the Nairobi Stock Exchange (NSE) in order to mobilise domestic savings and attract foreign capital investment. These measures include privatisation of state corporations through the stock exchange and allowing foreign investors to own shares in the listed companies. This study provides a longitudinal examination of voluntary disclosure practices in the annual reports of listed companies in Kenya from 1992 to 2001. The study investigates the extent to which corporate governance attributes, ownership structure and company characteristics influence voluntary disclosure practices.
Our results suggest that the extent of voluntary disclosure is influenced by a firm's corporate governance attributes, ownership structure and company characteristics. The presence of an audit committee is a significant factor associated with the level of voluntary disclosure, and the proportion of non-executive directors on the board is found to be significantly negatively associated with the extent of voluntary disclosure. The study also finds that the levels of institutional and foreign ownership have a significantly positive impact on voluntary disclosure. Large companies and companies with high debt voluntarily disclose more information. In contrast, board leadership structure, liquidity, profitability and type of external audit firm do not have a significant influence on the level of voluntary disclosure by companies in Kenya.
885 citations
Cites background from "The influence of company characteri..."
...Prior empirical studies have shown that profitability influences the extent of disclosure in annual reports (Wallace and Naser, 1995; Inchausti, 1997; Owusu-Ansah, 1998)....
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...Prior empirical studies have shown that profitability influences the extent of disclosure in annual reports (Wallace and Naser, 1995; Inchausti, 1997; Owusu-Ansah, 1998). Inchausti (1997) argued from the perspective of agency theory that management of a very profitable firm will use information in order to obtain personal advantages....
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...Inchausti (1997) argued from the perspective of agency theory that management of a very profitable firm will use information in order to obtain personal advantages....
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...Craswell and Taylor (1992) and Inchausti (1997) found a significant positive relationship between type of audit firm and disclosure practices, whereas Raffournier (1995), Depoers (2000) and Haniffa and Cooke (2002) found no significant association....
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TL;DR: Li et al. as mentioned in this paper investigated the extent and determinants of voluntary Internet-based corporate disclosures (ICD) by listed Chinese companies and found that the extent of voluntary ICD is positively and significantly related to firm size, and that the presentation format is associated with the employment of a Big 5 international audit firm and whether the firm is in the information technology industry.
592 citations
TL;DR: In this article, the extent of financial information disclosure on the Internet by the largest companies in the UK in 1998 was examined and a statistically significant positive relationship between the size of a company and the use and extent of disclosure was found.
Abstract: This paper examines the extent of financial information disclosure on the Internet by the largest companies in the UK in 1998. Companies were surveyed to establish whether they had a website and if so whether financial information was available. We also investigated whether that information was in summary form or whether the full annual report was available. This study finds a statistically significant positive relationship between the size of a company and the use and extent of disclosure on the Internet. There was no significant association between industry type and disclosure.
520 citations
TL;DR: In this paper, the authors investigated whether the voluntary disclosure of ratios in corporate annual reports can be explained by agency and signalling theory and found some evidence of an association between ratio disclosure and company performance, size and industry.
Abstract: This paper investigates whether the voluntary disclosure of ratios in corporate annual reports can be explained by agency and signalling theory. The two theories are discussed and the applicability to explaining ratio disclosures considered. Drawing on agency and signalling theory, seven hypotheses are tested using data collected over five years, for 313 UK companies. More specifically, associations are considered between ratio disclosure and the following characteristics: company profitability; return on investment; gearing; liquidity; company efficiency; size and industry. The paper finds some evidence of an association between ratio disclosure and company performance, size and industry. The implications of these findings are considered and areas of further research discussed.
518 citations
References
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TL;DR: In this article, the authors draw on recent progress in the theory of property rights, agency, and finance to develop a theory of ownership structure for the firm, which casts new light on and has implications for a variety of issues in the professional and popular literature.
49,666 citations
TL;DR: In this paper, the authors present a struggling attempt to give structure to the statement: "Business in under-developed countries is difficult"; in particular, a structure is given for determining the economic costs of dishonesty.
Abstract: This paper relates quality and uncertainty. The existence of goods of many grades poses interesting and important problems for the theory of markets. On the one hand, the interaction of quality differences and uncertainty may explain important institutions of the labor market. On the other hand, this paper presents a struggling attempt to give structure to the statement: “Business in under-developed countries is difficult”; in particular, a structure is given for determining the economic costs of dishonesty. Additional applications of the theory include comments on the structure of money markets, on the notion of “insurability,” on the liquidity of durables, and on brand-name goods.
17,764 citations
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TL;DR: In this paper, the authors present a model in which signaling is implicitly defined and explains its usefulness, in which the employer is not sure of the productive capabilities of an individual at the time he/she hires him.
Abstract: Publisher Summary This chapter discusses job market signaling. The term market signaling is not exactly a part of the well-defined, technical vocabulary of the economist. The chapter presents a model in which signaling is implicitly defined and explains its usefulness. In most job markets, the employer is not sure of the productive capabilities of an individual at the time he hires him. The fact that it takes time to learn an individual's productive capabilities means that hiring is an investment decision. On the basis of previous experience in the market, the employer has conditional probability assessments over productive capacity with various combinations of signals and indices. This chapter presents an introduction to Spence's more extensive analysis of market signaling.
12,195 citations
Book•
25 Jul 1986TL;DR: In this paper, the authors propose a homogeneity test for linear regression models (analysis of covariance) and show that linear regression with variable intercepts is more consistent than simple regression with simple intercepts.
Abstract: 1. Introduction 2. Homogeneity test for linear regression models (analysis of covariance) 3. Simple regression with variable intercepts 4. Dynamic models with variable intercepts 5. Simultaneous-equations models 6. Variable-coefficient models 7. Discrete data 8. Truncated and censored data 9. Cross-sectional dependent panel data 10. Dynamic system 11. Incomplete panel data 12. Miscellaneous topics 13. A summary view.
6,234 citations
TL;DR: In this paper, the authors argue that audit quality is not independent of audit firm size, even when auditors initially possess identical technological capabilities, and when incumbent auditors earn client-specific quasi-rents, auditors with a greater number of clients have more to lose by failing to report a discovered breach in a particular client's records.
4,969 citations