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Corporate Financial Disclosure Measurement in the Empirical Accounting Literature: A Review Article

Author

Listed:
  • Omaima A. G. Hassan

    (Robert Gordon University, Garthdee House, Garthdee Road, Aberdeen AB107QB, UK)

  • Claire Marston

    (Accountancy, Economics and Finance, School of Social Sciences, Heriot-Watt University, Riccarton, Edinburgh EH14 4AS, UK)

Abstract

This paper develops a framework for corporate financial disclosure measurement to identify and evaluate common measures of financial disclosure employed in prior empirical accounting studies. It identifies two approaches: (i) a disclosure-based approach that investigates actual disclosure, operationalizes the concept of disclosure in terms of its main dimensions such as the quantity and quality of disclosure, and develops methods to measure them such as the disclosure index and textual analysis, and (ii) a non-disclosure-based approach that uses the values of some observable variables to proxy for disclosure such as market-based disclosure measures. The study also discusses some empirical challenges related to causal claims and the extent to which the reliability and validity of these different measures of disclosure are tested. The purposes of this review are (i) to help future researchers identify exemplars and select or develop their own suitable disclosure measures, and (ii) to identify measurement issues relating to corporate financial disclosure and provide avenues for future research.

Suggested Citation

  • Omaima A. G. Hassan & Claire Marston, 2019. "Corporate Financial Disclosure Measurement in the Empirical Accounting Literature: A Review Article," The International Journal of Accounting (TIJA), World Scientific Publishing Co. Pte. Ltd., vol. 54(02), pages 1-54, June.
    • Handle: RePEc:wsi:tijaxx:v:54:y:2019:i:02:n:s1094406019500069
    DOI: 10.1142/S1094406019500069
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    Cited by:

    1. Bedjo Santoso & Widodo Widodo & Muhammad Taufiq Akbar & Khaliq Ahmad & Rahmat Heru Setianto, 2022. "The Determinant of Sukuk Rating: Agency Theory and Asymmetry Theory Perspectives," Risks, MDPI, vol. 10(8), pages 1-23, July.
    2. Hidaya Lawati & Khaled Hussainey & Roza Sagitova, 2021. "Disclosure quality vis-à-vis disclosure quantity: Does audit committee matter in Omani financial institutions?," Review of Quantitative Finance and Accounting, Springer, vol. 57(2), pages 557-594, August.
    3. Suliman Alshahmy & Hafez Abdo, 2023. "Impacts of reserve and decommissioning disclosures on value and performance of oil and gas firms listed in the UK," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 20(2), pages 168-184, June.
    4. Arpita Sharma & Shailesh Rastogi, 2021. "Impact of Efficiency on Voluntary Disclosure of Non-Banking Financial Company—Microfinance Institutions in India," JRFM, MDPI, vol. 14(7), pages 1-21, June.
    5. Mohammed Adel Elzahaby, 2023. "Corporate narrative disclosure practices in the Middle East and North Africa (MENA) region: a systematic literature review," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 20(3), pages 296-315, September.
    6. Daniel Badulescu & Muhammad Nouman Akhtar & Mumtaz Ahmad & Mariam Abbas Soharwardi, 2021. "Accounting Policies, Institutional Factors, and Firm Performance: Qualitative Insights in a Developing Country," JRFM, MDPI, vol. 14(10), pages 1-20, October.
    7. Cecília Carmo & Cristiana Ribeiro, 2022. "Mandatory Non-Financial Information Disclosure under European Directive 95/2014/EU: Evidence from Portuguese Listed Companies," Sustainability, MDPI, vol. 14(8), pages 1-23, April.

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