Evidence of voluntary accounting disclosures in the Athens Stock Market

Abstract

The study explores the motives for providing voluntary accounting disclosures and investigates the financial differences between voluntary and non-voluntary disclosers. The study also examines the association between the provision of voluntary disclosures and earnings management. The findings show that voluntary disclosers exhibit higher profitability and growth and appear to be good news bearers. They also display a change in their management and a higher share trading volume. The results provide evidence that the provision of voluntary accounting disclosures is negatively associated with earnings management. The study indicates that sound financial indicators and good news and prospects are likely to motivate firms to provide voluntary disclosures in order to attract investors' attention and communicate their managerial superiority or potential. Less information asymmetry and earnings management would lead to the disclosure of informative accounting information and would subsequently assist investors in making efficient decisions.

The Extent and Determinants of Voluntary Disclosures in Annual Reports: Evidence from Banking and Finance Companies in Sri Lanka

“…Therefore it suggest that if the firm size is small then the agency cost also will be decreased. Therefore, to avoid this agency conflict, larger firms may disclose more voluntary information and this suggestion is supported by the studies Ahmed and Nicholls 1994;Souissi and Khlif 2012;Iatridis and Alexakis, 2012. Studies were explained the reasons behind to have this kind of relationship.…”

“…There are some reasons to have positive relationship between profitability and voluntary disclosure level such as higher profitability tend be a motive to managers to provide more voluntary disclosures (Leventis and Weetman, 2004;Iatridis and Alexakis, 2012), higher profitability firms are likely to signal to their success to the market through high level of disclosures (Wallace et.al., 1994). …”

“…2016 identified the significant positive relationship among firm's profitability and corporate voluntary disclosures. Such a relationship exist because firms do not voluntary provide rich accounting disclosures when they are not performing well and firms that perform well voluntary disclose detailed accounting information (Iatridis and Alexakis, 2012). Furthermore, management of companies which has more profits motivated to disclose more information to support continuance of firm's position and to increase its compensation (Naser et.al.…”

“…1995;Inchausti, 1997;Naser et.al. 2002;Gul and Leung 2004;Leventis and Weetman, 2004;Barako et.al 2006;Huafang and Jianguo 2007;Abdullah and Ku Ismal 2008;Iatridis and Alexakis, 2012;Charumathi and Ramesh 2015 attempt to identify the determinants of voluntary disclosures in various countries and in various industries.…”

“…Therefore companies disclose voluntary information in excess of the mandatory information. Organizations who disclose more information have opportunity to obtain some benefits such as lower capital costs, gain investor confidence, and improve marketability of their shares (Meek et al, 1995, Kristandl andBontis, 2007) and Corporate disclosure is vital for the users of financial statements in order to make informed decisions on the valuation and investment (Iatridis and Alexakis, 2012;Charumathi and Ramesh 2015). Further voluntary disclosures is a device which reduce the information gap in between insiders and the stakeholders.…”