In recent years a world-wide debate has emerged on the future of business reporting. There is growing agreement that traditional financial reporting is inadequate in meeting with the information needs of stakeholders, particularly in a knowledge economy characterised by a rapidly emerging emphasis on intellectual capital (IC). This study examines voluntary intellectual capital disclosure (ICD) provided by listed Italian companies in annual reports from the year 2001. The study aims to answer two research questions namely: what is the amount and content of ICD; and what are the factors that influence different voluntary reporting behaviours. In relation to amount and content of information disclosed, the results are consistent with previous ICD studies showing extensive disclosure of external capital (in particular about "customers"). Regarding the factors that can explain different voluntary reporting practices, findings suggest that industry and size are not important in determining the content of information disclosed, however, as found in social and environmental disclosure (SED) studies, these factors are relevant in explaining the amount of information disclosed. In summary, this paper highlights the ICD practices of Italian listed companies by examining their annual reports, and compares these results with a number of previous national studies.

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In this paper, we investigate whether the corporate social responsibility (CSR) orientation of a firm affects its reporting incentives, in terms of the trade-off between real earnings management (REM) and accrual-based earnings management (AEM). Furthermore, relying on previous literature on the relationship between legal enforcement and the trade-off between AEM and REM, we consider whether the CSR orientation plays a moderating role in this relationship. We base our study on a sample of 5,863 firm-year observations for 1,141 unique firms, covering 24 different countries over the period [2003][2004][2005][2006][2007][2008][2009]. We find that CSR-oriented firms are less likely to engage in REM than in AEM. Moreover, we document that in strong legal enforcement countries, incentives to use REM instead of AEM are significantly lower in companies with a high CSR orientation than in companies with a low CSR orientation. These findings are consistent with the expectation that CSR-oriented companies are less likely to engage in the more costly but harder to detect earnings management strategy, i.e. the strategy that alters the underlying real operations of the company (REM). We provide additional evidence for our arguments that CSR-oriented firms are more likely to give up REM than AEM because of its detrimental value on future performance. All together our evidence suggests that CSR orientation acts as a constraint for REM and in doing so it contributes to the creation of value for all stakeholders.

Empirical studies do not make a clear distinction between the quantity and quality of disclosure. As it is generally assumed that the quantity of information has an implication in determining its quality, quantity measures are often used as proxy for disclosure quality. Nonetheless, the measurement of the quality of disclosure is recognized as a relevant question that is still open and the importance of developing measures of disclosure quality is emphasized in literature. This paper disputes the idea that the quantity of disclosure is a sound proxy for the quality of disclosure. The adoption of multidimensional frameworks for the appreciation of disclosure is discussed and an index for quality disclosure is proposed. Moving from the assumption that high-quality information should usefully support external users in the judgment of past and future performance, we hypothesize that high-quality disclosure is positively associated with accuracy and negatively associated with the dispersion of analysts' earnings forecasts. We show analytically that the proposed framework captures dimensions of annual report disclosure that are considered useful by financial analysts in forecasting earnings and that the proposed measure of disclosure quality has a stronger positive statistical association with accuracy and a stronger negative association with the dispersion of financial analysts' earnings forecasts than a simple index of disclosure quantity has.

We study whether environmental reporting serves as a transparency tool to communicate sound environmental policies to stakeholders or rather as a manipulation tool of stakeholders' perceptions. In particular, we focus on the relationship between environmental disclosure tone and future environmental performance and we furthermore explore the role of the board of directors' monitoring and stakeholder orientation in shaping this relationship. Using a sample of 288 US oil and gas firms, we find that the bias towards positive language does not reflect purely opportunistic managerial reasons, but rather is a transparency tool to signal future environmental performance. In addition, we document that the stakeholder orientation of the board plays a transparency role in communicating the firm's superior performance. Our findings contribute to the debate on whether discretionary strategies in environmental reporting are more about increased transparency or about stakeholder manipulation. Moreover, they help investors and policymakers to interpret managers' language choices. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment.