Factors Affecting Voluntary Disclosure With Corporate Governance as Moderating Variables

Abstract

Purpose — The purpose of this research is to analyze and prove the influence of independent variables that are proxied by profitability, liquidity, firm size on voluntary disclosure, and moderated by corporate governance variables. Design/methodology/approach — The object of the research is the companies listed on the IDX from 2012 through 2016. This research uses a purposive sampling method involving 45 annual company reports and uses multiple regression and MRA (Moderated Regression Analysis) as a data analysis tool. Findings — The results of this research indicate that there is a significant positive effect between liquidity, firm size on voluntary disclosure, there is a significant negative effect between profitability and voluntary disclosure, and corporate governance moderates the relationship between profitability, liquidity, firm size, and voluntary disclosure. Practical Implications — Companies with high liquidity supported by good corporate governance will reduce voluntary disclosures due to the existence of independent commissioners whose positions are still less influential with the board of commissioners and board of directors, in the other hand, companies with low profitability supported by good corporate governance encourage managers to disclose company information more broadly to convince all stakeholders concerned. Originality/value —

Voluntary disclosure and complexity of reporting in Egypt: the roles of profitability and earnings management

“…Signaling theory argues that profit-making firms disclose voluntary information to signify their good performance to gain an advantage for their values Widayawati et al, 2020). Empirically, prior studies have reported mixed findings for the effect of firm profitability on voluntary disclosure.…”