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The moderating effect of voluntary disclosure on the relation between earnings quality and information asymmetry: some Canadian evidence

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  • Denis Cormier
  • Marie-Josée Ledoux
  • Michel Magnan

Abstract

This study investigates how web-based voluntary disclosure affects the relation between earnings quality and information asymmetry, considering governance attributes. Our results show that both earnings quality and web-based disclosure are associated with reduced information asymmetry. In addition, web-based disclosure has a moderating effect on the relation between earnings quality and information asymmetry, irrespective of earnings quality. This is consistent with the argument that stock market participants assess the quality of financial reporting taking into account a firm's overall disclosure strategy. Finally, corporate governance is found to underlie both disclosure and earnings quality.

Suggested Citation

  • Denis Cormier & Marie-Josée Ledoux & Michel Magnan, 2012. "The moderating effect of voluntary disclosure on the relation between earnings quality and information asymmetry: some Canadian evidence," International Journal of Accounting, Auditing and Performance Evaluation, Inderscience Enterprises Ltd, vol. 8(2), pages 157-183.
    • Handle: RePEc:ids:ijaape:v:8:y:2012:i:2:p:157-183
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    Citations

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    Cited by:

    1. Bona-Sánchez, Carolina & Pérez-Alemán, Jerónimo & Santana-Martin, Domingo J., 2017. "Sustainability disclosure, dominant owners and earnings informativeness," Research in International Business and Finance, Elsevier, vol. 39(PA), pages 625-639.
    2. Samaha, Khaled & Khlif, Hichem & Hussainey, Khaled, 2015. "The impact of board and audit committee characteristics on voluntary disclosure: A meta-analysis," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 24(C), pages 13-28.
    3. Ala’ Hussein Albawwat & Mohamad Yazis Ali Basah, 2015. "The Impact of Shariah Approved Companies on the Relationship between Corporate Governance Structure and Voluntary Disclosure of Interim Financial Reporting in Jordan," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 5(2), pages 66-85, April.
    4. Alexander Landau & Janina Rochell & Christian Klein & Bernhard Zwergel, 2020. "Integrated reporting of environmental, social, and governance and financial data: Does the market value integrated reports?," Business Strategy and the Environment, Wiley Blackwell, vol. 29(4), pages 1750-1763, May.

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