Reducing Cost of Capital. Do Voluntary Disclosure and Accounting Conservatism Contribute?

Abstract

Theoretically, accounting conservatism and voluntary disclosure may be used as means to reduce cost of equity. Supportive evidence has been provided by the majority of studies, especially in developed countries. We address this issue by focusing on an underdeveloped country with political instability. The impact of accounting conservatism and voluntary disclosure on cost of capital is estimated using the data belongs to all companies listed on the Palestine Exchange during the period from 2015 to 2019. The results confirm the negative influence of voluntary disclosure and accounting conservatism on cost of capital.

Configurational analysis of corporate governance and corporate social responsibility reporting assurance: understanding the role of board and CSR committee

“…A recent survey conducted by KPMG demonstrates that 96% of 250 world's largest companies [1] contain CSR-related disclosures in their annual reports, believing that CSR is relevant for their current and potential investors (KPMG, 2022). This thriving importance and popularity of CSRD, however, is coupled with certain complexities and a lack of unified guidance (Alia and AbuSarees, 2023;Mardawi et al, 2021;Alia and Mardawi, 2021;Bouten and Hooz ee, 2015), which has led users to raise some concerns regarding the reliability, materiality, completeness and comparability of CSRD (Abu Alia et al, 2022;Radhouane et al, 2020;Muslu et al, 2019;Miras-Rodriguez and Di Pietra, 2018;Dobbs and van Staden, 2016;Peters and Romi, 2015). One key measure that could be used to improve this credibility gap and to reinforce the level of trust in CSRD is to have such disclosure assured by external independent third parties (Velte, 2021;Quick and Inwinkl, 2020;Maroun, 2018Maroun, , 2019Simnett and Huggins, 2015;Maroun and Atkins, 2015;Cohen and Simnett, 2015;Perego and Kolk, 2012;Simnett et al, 2009).…”