Management reporting incentives and classification credibility: The effects of reporting discretion and reputation

Hodge, Frank D.; Hopkins, Patrick E.; Pratt, Jamie

doi:10.1016/j.aos.2005.12.003

Cited by 85 publications

(43 citation statements)

References 18 publications

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“…More generally, Hirst, Koonce, and Simco (1995) have shown that fi nancial reporting users consider the consistency between management's reporting incentives and a fi rm's disclosures in assessing reporting credibility. This tendency increases with the level of discretion in reporting, but it decreases with a fi rm's reporting reputation (Hodge, Hopkins, & Pratt, 2006). In this vein, fi rms may play on information attributes, like precision level, to mitigate an external audience's tendency to discount the credibility of its discretionary disclosures and thus, enhance the persuasiveness and effectiveness of social and human capital disclosures.…”

Section: Why Are Social and Human Capital Disclosuresmentioning

confidence: 99%

Attributes of social and human capital disclosure and information asymmetry between managers and investors

Cormier¹,

Aerts

Ledoux³

et al. 2009

Can J Adm Sci

123

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We extend the literature on voluntary disclosure by investigating the impact of precision attribute of social and human capital disclosure on information asymmetry. We provide evidence on how the stock market reacts to different levels of information precision. Overall, results suggest that quantitative disclosure reduces share price volatility and increases Tobin's Q. As expected, firm size attenuates the impact of precision attribute of disclosure on information asymmetry. Furthermore, it appears that firms take into account ultimate costs and benefits to shareholders when determining precision attribute of their disclosure. Finally, our results suggest that efficient governance leads to more disclosure. Copyright © 2009 ASAC. Published by John Wiley & Sons, Ltd.

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Section: Why Are Social and Human Capital Disclosuresmentioning

confidence: 99%

Attributes of social and human capital disclosure and information asymmetry between managers and investors

Cormier¹,

Aerts

Ledoux³

et al. 2009

Can J Adm Sci

123

View full text Add to dashboard Cite

show abstract

“…As a consequence, international institutions have become more involved in the issuance of regulations and codes of good governance, with a view to restoring the confidence of investors in large corporations. In this respect, Mercer (2004) and Hodge et al (2006) have stated that the credibility of information is an essential element in the governance of a society.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

“…Corporate transparency has become an important dimension of corporate governance and has a positive impact on the market evaluation of businesses (Mercer, 2004;Hodge et al, 2006). More transparency helps investors understand management decisions, reduces information asymmetry, enhances confidence in the capital market and increases foreign direct investment (Bushman and Smith, 2001).…”

Section: Introductionmentioning

confidence: 99%

Corporate Information Transparency on the Internet by Listed Companies in Spain (IBEX35) and Mexico (IPYC)

Turrent¹,

Ariza²

2012

IJDAR

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Abstract. Financial and non-financial disclosure play a central role in the functioning of capital markets. In this context, the Internet has been adopted as an effective mechanism for large companies to disseminate corporate information. The institutional theory approach has been applied to identify both formal (fundamentally legal and economic) and informal factors that significantly influence listed companies' level of corporate transparency on the Internet. Our work aims to build on existing study by focusing on two main objectives. Firstly, to make a comparative study of the corporate transparency of listed companies from Mexico and Spain by creating an index of corporate transparency on the Internet (e-CTI). And secondly, to identify the factors that affect this index using multiple regression analysis. Our study population is comprised of 70 companies, of which 35 belong to the Mexican Price and Quotations Index (IPyC) and 35 to the Spanish IBEX 35 index. The descriptive analysis reveals significant differences in the level of information disclosure between the two countries. The companies listed in Mexico obtain an e-CTI of 59%, while the Spanish ones register 80%, i.e. more importance is assigned to the disclosure of corporate governance data in Spain than in Mexico. Furthermore, this analysis shows that the factors most telling with regards to corporate transparency are the strength and application of law, GDP per capita, inflation and firm-level variables such as ownership concentration and Chairman of the Board-Chief Executive Officer (COB-CEO) duality. However, other variables such as board size and composition, profitability, leverage and firm size are not significant for the purposes of this analysis. Our work is of great relevance today, since most studies have focused on developed countries, mainly in the U.S. and Europe, with few comparisons being made between developed and developing countries, such as Spain and Mexico.

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“…Por otro lado, los recientes escándalos financieros que tuvieron lugar en EE.UU., Europa y Latinoamérica, han avivado el interés por el tema. Así, Mercer (2004) y Hodge et al (2006) afirman que la credibilidad de la información es un elemento esencial en el buen gobierno de una sociedad. La transparencia corporativa ha sido adoptada como uno de los principios rectores del buen gobierno por organismos internacionales como la Organización para el Desarrollo y Cooperación Económicos [OCDE].…”

Section: Introductionunclassified

Factores que Inciden en una Mayor Transparencia de Gobernanza Corporativa en Empresas Cotizadas Latinoamericanas

Turrent¹

2014

REMEF

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ResumenBajo el enfoque de la teoría institucional, nuestro trabajo realiza un estudio comparativo del nivel de transparencia en gobierno corporativo de empresas cotizadas Latinoamericanas en el periodo de 2004-2010. Por otro lado, identifica aquellos factores institucionales formales que inciden en la transparencia de gobernanza empresarial. Los resultados ponen de manifiesto que el sistema legal, el tamaño y composición del consejo, la presencia del comité de auditoría, el tamaño de la empresa, el nivel de endeudamiento y el sector industrial inciden significativamente en el nivel de transparencia en gobierno corporativo en la región Latinoamericana. AbstractUnder the institutional theory approach, our work aims to obtain a comparative study of corporate governance transparency level on Latin American listed companies during 2004-2010 period. On the other hand, to identify those formal institutional factors that have a significant influence on corporate governance disclosure. The results indicate that legal system, board size, board composition, audit committee, size of the company, leverage, and industry type influence on corporate governance transparency on Latin American region.

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Management reporting incentives and classification credibility: The effects of reporting discretion and reputation

Cited by 85 publications

References 18 publications

Attributes of social and human capital disclosure and information asymmetry between managers and investors

Attributes of social and human capital disclosure and information asymmetry between managers and investors

Corporate Information Transparency on the Internet by Listed Companies in Spain (IBEX35) and Mexico (IPYC)

Factores que Inciden en una Mayor Transparencia de Gobernanza Corporativa en Empresas Cotizadas Latinoamericanas

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