The Impact of Size, Stock Market Listing, and Auditors on Voluntary Disclosure in Corporate Annual Reports

Firth, Michael

doi:10.1080/00014788.1979.9729168

Cited by 390 publications

(304 citation statements)

References 7 publications

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“…studies that relate the level of disclosure to firm characteristics include Firth (1979); Cooke (1989;1991, and1992);imhoff (1992); malone, Fries and jones (1993); Singhvi and Desai (1971); Heflin, Shaw and Wild (2001);and wallace and naser (1995). these studies provide evidence of the association between disclosure levels and firm characteristics, including firm size; listing status; firm auditor; the scope of business; risk of trading; and industry type.…”

Section: Prior Research and Hypotheses Developmentmentioning

confidence: 93%

Risk Management Committee and Financial Instrument Disclosure

Hassan¹,

Salleh²,

Yatim³

et al. 2012

AJAG

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Section: Prior Research and Hypotheses Developmentmentioning

confidence: 93%

Risk Management Committee and Financial Instrument Disclosure

Hassan¹,

Salleh²,

Yatim³

et al. 2012

AJAG

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“…In order to facilitate comparisons between Italian and UK firms, we matched them pairwise (e.g., Bozzolan et al, 2003). As previous studies found that firm size and industry (Firth, 1979; Cooke, 1989 Cooke, , 1992 Wallace & Naser, 1995, Raffournier, 1995 Botosan, 1997;Giner Inchausti, 1997; Robb et al, 2001; Owusu-Ansah & Yeoh, 2005) affect 13 the level of voluntary disclosure, the sample was selected so that UK and Italian firms were not significantly different from each other in terms of industry and size. Both sets of firms were classified according to the two-digit SIC code industry and market capitalisation at 31-12-2008 (as a proxy for firm size), leaving a final sample of 117 firms for each country (see table 1 for a description of the sample characteristics).…”

Section: Sample and Data Gatheringmentioning

confidence: 99%

Directors' remuneration: A comparison of Italian and UK non-financial listed firms' disclosure

Melis

Gaia

Carta

2015

The British Accounting Review

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Abstract:Directors' remuneration is a key issue for both academics and policymakers. It has caused enormous controversy in recent years. This study uses a comprehensive index to analyse the disclosure of directors' remuneration in Italian and UK listed firms. It finds that the level of voluntary disclosure is significantly associated with firm-specific incentives, such as the demand for information from investors and the need for legitimacy. It finds that the level of voluntary disclosure is significantly higher in the UK than in Italy and that firm-specific incentives to disclose voluntary information differ according to the institutional setting in which a firm operates. In the UK, firm-specific incentives mostly come from the demand for information, estimated with the level of ownership diffusion, and the need for legitimacy generated by poor market performance and shareholders' dissent. In Italy, firm-specific incentives seem to be represented by the need for legitimacy generated by media coverage. This study also provides evidence that, in both countries, the information disclosed in corporate documents does not allow readers to obtain a comprehensive picture of directors' remuneration. Bonuses are poorly disclosed even though they are a key element of directors' remuneration. This finding is clearly important for policymakers at European and national level.Keywords: agency theory, directors' remuneration, disclosure, legitimacy theory. 2 IntroductionDirectors' remuneration aims to align the interests of directors with those of shareholders, thereby reducing agency problems (Jensen & Meckling, 1l976). However, directors' remuneration, of itself, could give rise to agency problems (Bebchuk et al., 2002). This is one of the key areas where directors may have a conflict of interest and where due account should be taken of the interests of shareholders (EU Commission, 2004). Controversy surrounding directors' remuneration reflects the perception that payments have been excessive and that the lack of timely and adequate disclosure has resulted in increased information asymmetry and rent-extraction (Bebchuk et al., 2002, Jensen et al., 2004. The demand for public disclosure arises from information asymmetry and agency conflicts between directors and outside investors (Healy & Palepu, 2001). Disclosure on directors' remuneration would help to resolve such problems. It can reduce information asymmetry on complex remuneration arrangements that can be an important mechanism to transfer wealth from shareholders to directors (Bebchuk et al., 2002;Laksmana, 2008; Nelson et al., 2010). Moreover, directors' remuneration has been blamed for playing a central role in many international corporate scandals, as well as having been a key factor that contributed to the global financial crisis (e.g., Bebchuk & Fried, 2005). Consequently, regulators have been concerned that directors should be accountable to shareholders by disclosing their remuneration policies. In particular, the EU Commission (2004;) has issued two non-binding ...

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“…Agency theory suggests that the extent of information disclosure in annual reports may vary with listing status (Cook, 1991).As Firth (1979) indicated that minimum disclosure requirements of listed companies in the stock exchange are slightly higher than non-listed companies. Therefore, this study attempts to examine the relationship between listing status in the LSM and the level of voluntary information disclosure in the annual reports of a commercial bank.…”

Section: Listing Status (Lists)mentioning

confidence: 99%