Voluntary disclosure in the context of convergence with International Accounting Standards in Brazil

Abstract

Purpose -The purpose of this paper is to verify the influence of the convergence process to International Financial Reporting Standards on the voluntary disclosure of listed Brazilian companies.Design/methodology/approach -A voluntary disclosure metric was designed and collected from a random sample of 66 companies registered as active in BM&FBovespa during the 2005-2012 period. For the hypothesis test it was used panel data regressions with random effects.Findings -The convergence process to International Financial Reporting Standards is presented as an exogenous factor that affected positively and significantly voluntary disclosure in the analyzed period. It leads to the complementary rationale between mandatory disclosure and the voluntary disclosure.Originality/value -The study presents a new metric for measuring the voluntary disclosure level, with the potential to understand the nature of the relationship between this and the mandatory disclosure. In the Brazilian capital market context, governed by the stakeholder model, convergence to International Financial Reporting Standards induced an increase on voluntary disclosure quality.

Voluntary disclosure and earnings management: evidence from the Brazilian capital market

“…Part of this period is marked by adjustments resulting from the process of alignment with international accounting standards starting in 2008. Consoni and Colauto (2016) present evidence that this process can be understood as an exogenous factor that had a signifi cant positive eff ect on voluntary disclosure in Brazil. Th erefore, the index proposed by Consoni and Colauto (2016) is adopted as a metric for voluntary disclosure and, diff erent from that of Murcia and Wuerges (2011), the proxy for earnings management that is used is the discretionary accruals (DA) estimated using the model by Dechow et al (1995).…”

“…Th e procedures for data collection are the same as those adopted by Consoni and Colauto (2016), aligning the scope of each item of the metric with the content of statements in the Management Report and, where applicable, in some sections of the IAN and Reference Form. To take advantage of the fact that some companies disclose more detailed information, these researchers defi ne coding criteria that consider how detailed the information is, in both qualitative and quantitative terms.…”

“…Th is study employs the same sample of companies that is used in Consoni and Colauto (2016). Th e sampling procedure favors the random selection of companies that have maintained an active registration in the BM&FBOVESPA during the 2005-2012 period, excluding fi nancial companies.…”

“…To explore what underlies the objective of this study and the specifi cs of the context being analyzed, as Botosan (2004) refers to it, this study employs the metric proposed by Consoni and Colauto (2016) for measuring the content of voluntary disclosures (Table 1). Th ese researchers conceive the metric grounded in Brazilian studies and defi ne its content based on the elements that continue to be voluntary over the time period of the study.…”

Rentabilidade e disclosure voluntário das empresas acionárias brasileiras

“…This research is justified based on the lack of a deep understanding of the relationship between profitability and voluntary disclosure in emerging countries (Zaini et al 2018). This gap can be seen in the divergent and non-significant results found on the theme in Brazil (Murcia & Santos, 2009;Klann & Beuren, 2011;Angonese, Sanches & Bezerra, 2014;Consoni & Colauto, 2016).…”