Is the Quality of Critical Accounting Policy Disclosures Lower for Companies with High Information Asymmetry?*

Paprocki, Craig; Stone, Mary S.

doi:10.2139/ssrn.594202

Cited by 14 publications

(10 citation statements)

References 11 publications

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“…One of the variables used for measuring information asymmetry is the Altman Z-score-a financial failure score (Paprocki & Stone, 2004). Altman developed this formula by carrying out discriminant analyses on manufacturing industry enterprises in 1968.…”

Section: The Variables Used For Measuring Information Asymmetrymentioning

confidence: 99%

“…According to this formula, the enterprises with a low Z-score have a financial difficulty. The enterprises going through a financial difficulty are expected to have poor quality information (Paprocki & Stone, 2004), thus a high information asymmetry. It is a known fact that an increase occurs in bankruptcy ratios among companies during financial crisis periods, and millions of dollars are lost due to the misinformation of investors (Russ, Achilles, & Greenfiald, 2009).…”

Section: The Variables Used For Measuring Information Asymmetrymentioning

confidence: 99%

“…6, No. 10;2013 book value depending on growth opportunities (Paprocki & Stone, 2004). Thus, we can make mention of a positive condition if the aforesaid value is low.…”

Section: The Variables Used For Measuring Information Asymmetrymentioning

confidence: 99%

“…The need of an enterprise for external borrowing gives rise to voluntary disclosures. The improvement of disclosures reduces information asymmetry, too (Paprocki & Stone, 2004). …”

Section: The Variables Used For Measuring Information Asymmetrymentioning

confidence: 99%

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The Relationship between Information Asymmetry and the Quality of Audit: An Empirical Study in Istanbul Stock Exchange

Varici¹

2013

IBR

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Information asymmetry occurs where one party of an enterprise has more or better information than the other. The primary objective is to remove asymmetric information. It is argued that information asymmetry can be removed by a high quality audit. This study examined the differences between the enterprises audited by Big Four audit companies that were employed for measuring the quality of audit and the enterprises not put into such audit in terms of information asymmetry variables. The enterprises audited by four big audit companies, which were argued to make a high quality audit, were compared with other enterprises in terms of 6 variables used in the measurement of information asymmetry. The study was conducted on manufacturing industry enterprises traded at Istanbul Stock Exchange (Note 1). The variables of the independence of the board of directors, market value/book value, and Tobin Q were found to be statistically different in two separate enterprise groups. However, the study yielded results contrary to those reported in the literature.

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Section: The Variables Used For Measuring Information Asymmetrymentioning

confidence: 99%

Section: The Variables Used For Measuring Information Asymmetrymentioning

confidence: 99%

“…6, No. 10;2013 book value depending on growth opportunities (Paprocki & Stone, 2004). Thus, we can make mention of a positive condition if the aforesaid value is low.…”

Section: The Variables Used For Measuring Information Asymmetrymentioning

confidence: 99%

“…The need of an enterprise for external borrowing gives rise to voluntary disclosures. The improvement of disclosures reduces information asymmetry, too (Paprocki & Stone, 2004). …”

Section: The Variables Used For Measuring Information Asymmetrymentioning

confidence: 99%

See 2 more Smart Citations

The Relationship between Information Asymmetry and the Quality of Audit: An Empirical Study in Istanbul Stock Exchange

Varici¹

2013

IBR

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“…(1), the extent of the application of it measured by a study sample and using ten-years data beginning in (2005) and ending in (2014), the study has used the actual annual reports of the banks to test the instructions Compliance, and has been given a mark (1) to comply with paragraph and a mark (0) for non-compliance with them, these marks has been added together and divided by 24 (the total number of paragraphs) and then multiplied by 5 to give degrees ranges between zero to 5, so that whenever the index is higher the quality of disclosure is higher, this quintet measure has been used in the study of (Paprocki & Stone, 2004).…”

Section: Measure the Quality Of Disclosure Of Financial Datamentioning

confidence: 99%

Measuring the Conservatism Level in the Accounting Policies and Its Effect on the Financial Information Disclosure Quality in the Jordanian Commercial Banks

Attar¹,

Altal²,

Ali³

2016

JMS

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The objective of this study is to measure the level of conservatism in accounting policies and its effect on disclosure quality in commercial banks in Jordan. The research was implemented on the Jordanian commercial banks listed at Amman Stock Exchange from the period 2005 to 2014. The study population consists (14) banks used as a sample. The total data observations for the last 10 years were (130), (29) of which were dismissed either because missing observation or outlier, leaving a final study sample of (101) observations. The research used the book value-to-market value ratio and the accruals-to-profit (before extraordinary events and discontinued operations) ratio as proxies for conservatism. While the level of compliance with disclosure instructions was used as a proxy for disclosure quality. The study used two hypotheses to achieve its goals. The results showed that there is a good level of conservatism in accounting policies used by Jordanian commercial banks, which is one of the banking sector characteristics. The study showed a significant effect of accounting conservatism measured by using the accruals-to-profit ratio on the disclosure quality, but not when using the book value-to-market value ratio. This difference in results could be referred to the presence of pure accounting factors in the accruals-to-profit ratio, but there are additional environmental factors in the book value-to-market value ratio.

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Information Asymmetry Problematic and Voluntary Disclosure in Companies

Çağıran

Varıcı

Özdemir³

2021

Accounting, Finance, Sustainability, Governance &Amp; Fraud: Theory and Application

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Is the Quality of Critical Accounting Policy Disclosures Lower for Companies with High Information Asymmetry?*

Cited by 14 publications

References 11 publications

The Relationship between Information Asymmetry and the Quality of Audit: An Empirical Study in Istanbul Stock Exchange

The Relationship between Information Asymmetry and the Quality of Audit: An Empirical Study in Istanbul Stock Exchange

Measuring the Conservatism Level in the Accounting Policies and Its Effect on the Financial Information Disclosure Quality in the Jordanian Commercial Banks

Information Asymmetry Problematic and Voluntary Disclosure in Companies

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