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Mapping corporate disclosure theories


  • Larissa von Alberti-Alhtaybat
  • Khaled Hutaibat
  • Khaldoon Al-Htaybat


Purpose - The purpose of this paper is to map corporate disclosure theories as a step towards filling a gap in the theoretical background for corporate disclosure research. The purpose of the map is to encompass a range of particular theories relating to corporate disclosure and to demonstrate the complex relationships between different notions of the financial disclosure phenomenon. This will help new researchers to understand how particular corporate disclosure theories are related, as well as help with teaching accounting theories at undergraduate and postgraduate level. Design/methodology/approach - A deductive and inductive approach to theory building was applied. The deductive approach suggests identifying the gap in the literature, the inductive approach then prescribes theory building in three stages: phenomenon observation, categorisation and relationship building. This approach serves to develop a theoretical map integrating the corporate disclosure theories. Findings - The paper discusses theories that recognise actual features of financial markets – market failure, information asymmetry and adverse selection – to provide an explanation for the existence of corporate reporting regulations and managerial incentives, which control and determine the maximum level of corporate information under these conditions. It then integrates these theories in a map seeking to explain corporate disclosure levels, mandatory and voluntary, financial and narrative. A combination of theoretical supplements – codification theory, Dye's theory of mandatory and voluntary disclosure, and disclosure transformation theory – are proposed in this framework as theories to explain processes of change in mandatory and voluntary corporate disclosure in practice. Originality/value - Another benefit mapping these theories is to provide useful insights into existing disclosure theories, which may help to explain why some empirical results have been inconsistent with the predictions of these theories. No similar attempts have been published in the accounting literature.

Suggested Citation

  • Larissa von Alberti-Alhtaybat & Khaled Hutaibat & Khaldoon Al-Htaybat, 2012. "Mapping corporate disclosure theories," Journal of Financial Reporting and Accounting, Emerald Group Publishing, vol. 10(1), pages 73-94, June.
  • Handle: RePEc:eme:jfrapp:v:10:y:2012:i:1:p:73-94

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    References listed on IDEAS

    1. Gregory Lewis, 2011. "Asymmetric Information, Adverse Selection and Online Disclosure: The Case of eBay Motors," American Economic Review, American Economic Association, vol. 101(4), pages 1535-1546, June.
    2. Richard A. Posner, 1974. "Theories of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 5(2), pages 335-358, Autumn.
    3. Eti Einhorn, 2005. "The Nature of the Interaction between Mandatory and Voluntary Disclosures," Journal of Accounting Research, Wiley Blackwell, vol. 43(4), pages 593-621, September.
    4. Zezhong Xiao & Michael John Jones & Andy Lymer, 2002. "Immediate trends in Internet reporting," European Accounting Review, Taylor & Francis Journals, vol. 11(2), pages 245-275.
    5. Core, John E., 2001. "A review of the empirical disclosure literature: discussion," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 441-456, September.
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    7. Cooke, Terence E. & Wallace, R. S. Olusegun, 1990. "Financial disclosure regulation and its environment: A review and further analysis," Journal of Accounting and Public Policy, Elsevier, vol. 9(2), pages 79-110.
    8. R.M. Haniffa & T. E. Cooke, 2002. "Culture, Corporate Governance and Disclosure in Malaysian Corporations," Abacus, Accounting Foundation, University of Sydney, vol. 38(3), pages 317-349.
    9. Xiao, Jason Zezhong & Yang, He & Chow, Chee W., 2004. "The determinants and characteristics of voluntary Internet-based disclosures by listed Chinese companies," Journal of Accounting and Public Policy, Elsevier, vol. 23(3), pages 191-225.
    10. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
    11. Ettredge, Michael & Richardson, Vernon J. & Scholz, Susan, 2002. "Dissemination of information for investors at corporate Web sites," Journal of Accounting and Public Policy, Elsevier, vol. 21(4-5), pages 357-369.
    12. R. Nielsen, 2010. "Practitioner-Based Theory Building in Organizational Ethics," Journal of Business Ethics, Springer, vol. 93(3), pages 401-406, May.
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