Voluntary Disclosure of Mission Statements in Corporate Annual Reports: Signaling What and To Whom?

2001 ◽  
Vol 106 (1) ◽  
pp. 65-87 ◽  
Author(s):  
David Campbell ◽  
Philip Shrives ◽  
Heike Bohmbach-Saager
Keyword(s):  
Voluntary Disclosure ◽  
Mission Statements ◽  
Annual Reports ◽  
Corporate Annual Reports

scholarly journals Investment analysts’ usage and perceived usefulness of corporate annual reports

2004 ◽  
Vol 1 (3) ◽  
pp. 61-71 ◽  
Author(s):  
Simon S.M. Ho ◽  
Kar Shun Wong
Keyword(s):  
Voluntary Disclosure ◽  
Balance Sheet ◽  
Information Value ◽  
Perceived Usefulness ◽  
Annual Reports ◽  
Factors Affecting ◽  
Disclosure Requirements ◽  
Income Statement ◽  
Regulatory Bodies ◽  
Corporate Annual Reports

This paper reports a study of the perceptions and beliefs of external users (investment analysts) of corporate annual reports in one of major international financial centres – Hong Kong. It was found that analyst users (1) view annual reports as having high information value particularly in terms of relevancy, (2) have a relatively high usage of annual reports and read the income statement and balance sheet most often, (3) consider the most important voluntary disclosure items to be discussions of factors affecting future financial results, future prospects of the company, main product market share, acquisition and disposal activities, and China business review, and (4) feel annual reports are somewhat useful, but the amount of information disclosed remains inadequate. Only a small percentage of users felt that the current disclosure requirements are either effective or very effective in serving investors’ needs and that much improvement is still needed. The implications of these findings for management, investors, regulatory bodies and researchers are discussed.

scholarly journals Disclosure of Voluntary Accounting Ratios by Malaysian Listed Companies

2018 ◽  
Author(s):  
Azrul Bin Abdullah ◽  
Ku Nor Izah Ku Ismail
Keyword(s):  
Voluntary Disclosure ◽  
Financial Analysis ◽  
Listed Companies ◽  
Annual Reports ◽  
Fundamental Importance ◽  
Company Performance ◽  
Financial Reports ◽  
Using Data ◽  
Accounting Ratios ◽  
Corporate Annual Reports

Accounting ratios are believed to be of fundamental importance in financial analysis, and therefore are useful addition to financial reports. This paper examines the reporting of voluntary accounting ratio by Malaysian companies in corporate annual reports. Drawing on agency and signaling theories, this paper explores whether associations exist between company performance and voluntary disclosure of accounting ratios. In particular, associations are tested between the extent of ratio disclosure and company performance (namely profitability, liquidity, leverage, and company efficiency), size and industry. Six hypotheses are tested using data collected from 2003 annual reports of 100 Malaysian listed companies. This paper provides evidence that the extent of voluntary ratio disclosure is low; and size, industry as well as liquidity significantly influence the reporting of ratios in corporate annual reports. The implications of these findings are discussed.

scholarly journals Does graphical reporting improve risk disclosure? Evidence from European banks

2018 ◽  
Vol 19 (1) ◽  
pp. 161-180 ◽  
Author(s):  
Michael Jones ◽  
Andrea Melis ◽  
Silvia Gaia ◽  
Simone Aresu
Keyword(s):  
Credit Risk ◽  
Impression Management ◽  
Perspective Taking ◽  
Voluntary Disclosure ◽  
Cognitive Biases ◽  
Annual Reports ◽  
Theory Approach ◽  
Risk Disclosure ◽  
Content Type ◽  
Incremental Information

Purpose The purpose of this paper is to examine the voluntary disclosure of risk-related issues, with a focus on credit risk, in graphical reporting for listed banks in the major European economies. It aims to understand if banks portray credit risk-related information in graphs accurately and whether these graphs provide incremental, rather than replicative, information. It also investigates whether credit risk-related graphs provide a fair representation of risk performance or a more favourable impression than is warranted. Design/methodology/approach A graphical accuracy index was constructed. Incremental information was measured. A multi-level linear model investigated whether credit risk affects the quantity and quality of graphical credit risk disclosure. Findings Banks used credit risk graphs to provide incremental information. They were also selective, with riskier banks less likely to use risk graphs. Banks were accurate in their graphical reporting, particularly those with high levels of credit risk. These findings can be explained within an impression management perspective taking human cognitive biases into account. Preparers of risk graphs seem to prefer selective omission over obfuscation via inaccuracy. This probably reflects the fact that individuals, and by implication annual report’s users, generally judge the provision of inaccurate information more harshly than the omission of unfavourable information. Research limitations/implications This study provides theoretical insights by pointing out the limitations of a purely economics-based agency theory approach to impression management. Practical implications The study suggests annual reports’ readers need to be careful about subtle forms of impression management, such as those exploiting their cognitive bias. Regulatory and professional bodies should develop guidelines to ensure neutral and comparable graphical disclosure. Originality/value This study provides a substantive alternative to the predominant economic perspective on impression management in corporate reporting, by incorporating a psychological perspective taking human cognitive biases into account.

scholarly journals Hedging Activities Information and Risk Management Committee Effectiveness: Malaysian evidence

2018 ◽  
Author(s):  
Azrul Bin Abdullah ◽  
Ku Nor Izah Ku Ismail
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Significant Influence ◽  
Statistical Models ◽  
Voluntary Disclosure ◽  
Annual Reports ◽  
Management Committee ◽  
Corporate Governance Mechanisms ◽  
The Relationship ◽  
Risk Management Committee

This study examines the extent of information about hedging activities disclosures within the annual reports of Main Market companies listed on Bursa Malaysia. The extent of hedging activities disclosures is captured through a 32-item-template, which consists of a mandatory and voluntary disclosure scores. The results of this study indicate that the extent of information on hedging activities disclosure is still insufficient among the sampled companies even though the disclosure scored is quite high. This study also examines the relationship between the existence of risk management committee (RMC), its characteristics and the extent of information on hedging activities disclosure in two separate statistical models. The regression results imply that the existence of RMC is positive but does not significantly influence the extent of information on hedging activities disclosure. However its characteristics (i.e. RMC independence and RMC meeting) have a significant influence. The findings may provide some meaningful insights to regulators, policymakers and researchers, towards the establishment of RMC as a part of the internal corporate governance mechanisms. In addition to its existence, the effectiveness of RMC also needs to be emphasised.

scholarly journals How does corporate voluntary disclosure affect asymmetric information and adverse selection?

2015 ◽  
Vol 12 (2) ◽  
pp. 413-425 ◽  
Author(s):  
Amal Hamrouni ◽  
Anthony Miloudi ◽  
Ramzi Benkraiem
Keyword(s):  
Asymmetric Information ◽  
Adverse Selection ◽  
Voluntary Disclosure ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Annual Reports ◽  
Strategic Information ◽  
Information Measures ◽  
Adverse Selection Costs ◽  
Bid Ask Spreads

This paper investigates whether the extent of corporate voluntary disclosure mitigates asymmetric information and adverse selection in the Euronext Paris stock exchange. We apply a disclosure index as a proxy for the extent of voluntary disclosure and use different spread measures to estimate both asymmetric information and adverse selection. Our findings show a negative relationship between the disclosure index and asymmetric information and adverse selection proxies. An analysis of sub-indexes provides additional mixed results. Several asymmetric information measures are negatively related to the volume of financial, non-financial and voluntary governance information in corporate annual reports. Nevertheless, the effect of strategic information volume is statistically significant only for effective bid-ask spreads. On the whole, these results are consistent with the view that high corporate voluntary disclosure is associated with narrow spreads and low adverse selection costs

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