Efficiency of authoritative disclosure recommendations: Evidence from IFRS transition disclosure in Finland
AbstractPurpose – This paper aims to explore the potential for disclosure recommendations given by authoritative supervisory bodies to reduce information asymmetry between the management and shareholders. Design/methodology/approach – There is only meagre existing evidence concerning firms' responses to disclosure recommendations. This paper uses descriptive statistics and OLS regression analysis to test if firms behave more similarly to voluntary or to mandatory disclosure when they follow the Committee of European Securities Regulators disclosure recommendation for International Financial Reporting Standards transition. Second, it analyses the determinants of and incentives for recommended transition disclosure. Findings – Recommended disclosure is documented to have more mandatory characteristics than purely voluntary disclosure. Moreover, the certain disclosure incentives for managers and corporate governance factors prove to have an impact on recommended disclosure. Firm size, growth prospects, and independent board members associate positively with recommended disclosure whereas there is a negative relationship between financial leverage and recommended disclosure. Research limitations/implications – The paper does not provide evidence on the cost differences between disclosure laws and authoritative disclosure recommendations. This could be examined by future research. Practical implications – Authoritative disclosure recommendations reduce information asymmetry. In some cases they may be a faster and more cost-efficient way to achieve disclosure enhancements than regulation. Originality/value – This paper is the first to explore the efficiency of authoritative disclosure recommendations in situations where urgent disclosure improvements are needed. The results have implications for regulatory bodies evaluating different strategies to reduce asymmetric information in these situations.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Emerald Group Publishing in its journal Journal of Financial Regulation and Compliance.
Volume (Year): 16 (2008)
Issue (Month): 4 (November)
Contact details of provider:
Web page: http://www.emeraldinsight.com
Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Miihkinen, Antti, 2012. "What Drives Quality of Firm Risk Disclosure?," The International Journal of Accounting, Elsevier, vol. 47(4), pages 437-468.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Louise Lister).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.