literature review on corporate disclosure

Academia.edu no longer supports Internet Explorer.

To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to  upgrade your browser .

Enter the email address you signed up with and we'll email you a reset link.

• We're Hiring!
• Help Center

Theories of corporate disclosure: A literature review

Corporate Governance and Sustainability Review

The purpose of this paper is to provide an up-to-date look at the reality of the theories used in disclosure literature, including stakeholder theory, legitimacy theory, agency theory, signaling theory, institutional theory. This study relies on both deductive and inductive approaches to reviewing a group of disclosure literature worldwide and highlighting the theoretical frameworks used. The results showed that the most comprehensive theory is the stakeholder theory, as researchers have adopted it in more than one field of disclosure. The legitimacy theory followed them. Both theories, however, have failed to be consistently supported in the prior studies as it is not expected that companies only want to satisfy stakeholders through disclosure (Al Amosh & Khtaib, 2021b), and legitimizing activities (Pistoni, Songini, & Bavagnoli, 2018) but due to the information asymmetry, firms’ preferences to disclose more information would be different based on their characteristics. Therefore, ...

Related Papers

Asian Review of Accounting

Mohamed Omran

Advances in Scientific and Applied Accounting

Marcelle Colares Oliveira

Nadeesha Priyadarshanie

This paper aims to develop a conceptual framework based on the most commonly used theories in corporate disclosure literature to explain firms' motives for disclosure decisions. System-oriented theories namely, institutional theory, stakeholder theory and institutional theory are integrated into one model to explain the determinants of corporate disclosures. Thereby, variables were identified under each theory and indicators which can be used as the proxy for the variables were also recognized. Disclosure literature confirms that political economy theory is the most commonly used theory in explaining determinants of corporate disclosure level. Accordingly, Profitability, company age, firm size and media exposure can be used as the measures of corporate legitimacy. Shareholder power, creditor power and lobby group power were taken as the variables of stakeholder theory. Isomorphism which is the practice of adopting similar practices is considered under the institutional theory. Coercive isomorphism, mimetic isomorphism, and normative isomorphism are three separate isomorphic processes and indicators were recognized for each isomorphism. The main limitation of this study is that this conceptual framework has included only the political economy theory. Other important theories such as agency theory, signaling theory, resource dependency theory, media agenda-setting theory may be used to explain corporate disclosure practices. This conceptual framework can be employed in empirical studies on the motivations for corporate disclosure behaviors in a variety of settings. The predicted disclosure motivates can be compared to empirical evidence of those studies. Findings obtained by utilizing this conceptual framework will help to evaluate which companies report? Under which context, in which sectors and of which size? And it answered whether there is uniform reporting across industries. Those findings will help regulators to establish a code of practice for disclosing information which leads to a better practice of reporting. This paper has presented a conceptual model for determinants of corporate disclosures which is not discussed elsewhere in the literature.

International Journal of Business and Society

Jennifer Tunga Janang

It is important for companies to adhere to society’s values by engaging in corporate social responsibility activities to remain legitimate, which in turn, translated into disclosures in annual reports. Corporate governance mechanisms have been used as explanatory factors in determining the level of disclosures. This paper aims to determine the influence of corporate governance mechanisms on the society disclosure in Malaysian companies’ annual reports using the legitimacy theory. The level of society disclosure is examined against the Modified Society Disclosure Index (MoSDI), which was developed based on the society indicatorof Global Reporting Initiative Version 4.0, preliminary observation on the 2016 NACRA winners’ annual reports and past literature. The analysis involved 234 top Malaysian companies’ annual reports from 2014 to 2016. The results found that audit committee, independent directors, and size are significantly associated withthe level of society disclosure. By comply...

International Journal of Accounting and Financial Reporting

Prince Modugu

This study is a compendium of the existing literature on corporate disclosure with a view to identifying the gaps to which future empirical inquiry may be directed. The paper discusses the concept of disclosure as canvassed by different authors. This review is initiated with a working definition of disclosure. This was followed by a series of reviews of studies in developed countries. Added to this, are developing countries’ studies. The review showed that the influencers of corporate disclosure differ between developed and developing countries on the one hand, and within both economies on the other hand. The review revealed mixed findings on the determinants of corporate disclosure. This suggests that the factors determining corporate disclosure are not fixed, and vary from one jurisdiction to another. The paper also x-rays a litany of theories of corporate disclosure research and suggests a unified theory that amalgamates the existing theories; and that which will be amenable to t...

Ahmet Anıl Karapolatgil

Due to the importance of stakeholders for the sustainability of the companies, there exists a research interest to identify the important stakeholders. With this study, most salient and other groups of stakeholders were identified based on a content analysis of sustainability reports of 78 large-scale companies. Although many researches are undertaken in developed countries based on sustainability reports that are popular tools for information disclosure for the companies, similar research in developing countries is still at infancy. The findings of the study indicate shareholders and government to be the most salient stakeholders regardless of industry difference. © 2016 Şener, Varoğlu and Karapolatgil. Published by Elsevier Ltd. Peer-review under responsibility of the International Strategic Management Conference

Journal of Business Ethics

Denis Cormier

Accounting Organizations and Society

A lack of sufficient theoretical support for models designed to explain corporate social responsibility activity led Ullmann (Academy of Management Review, 1985, pp. 540–577) to develop a framework for predicting corporate social activity based on a stakeholder theory of strategic management. This study empirically tests the ability of stakeholder theory to explain one specific corporate social responsibility activity — social responsibility disclosure. Results support this application, finding that measures of stakeholder power, strategic posture, and economic performance are significantly related to levels of corporate social disclosure.

SSRN Electronic Journal

Dhafer Saidane , Celine Gainet

The International Journal of Digital Accounting Research

RELATED PAPERS

Religija ir kultūra

Ramūnas Boleslovas Malcius

Pakistan journal of biological sciences : PJBS

Ardeshir Javaremi

Current Opinion in Virology

Michael Y Li

Acta Materialia

John Bruley

Syifa Atifah

John Kostelnick

How to Win Hearts: Inspiration from Gulen's Life

Ali Suleiman Ali

Chunming Su

claire sarrat

Bibliothek Forschung und Praxis

Claudia Lux

European Neuropsychopharmacology

Joseph Valadez

Anais Do Cbmfc

Jose luis Quispe campos

Cryobiology

Marta F.Riesco

Mohamed Yassine Binous

Proceedings of the National Academy of Sciences

2007 39th North American Power Symposium

A. Román-Messina

Dr. Muhaimin Ismoen

Ukrainian Journal of Food Science

CHRISTIANA TENIOLA GBADEBO

International Journal of Genomic Medicine

Joao Vicente Coffani Nunes

Valéria Maria

Revista del Hospital Italiano de Buenos Aires

walter dzurovcin

jhkghjf hfdgedfg

In: Bernardo Strobel Guimarães; Andréa Costa de Vasconcelos; Ana Carolina Hohmann. (Org.). Novo Marco Legal do Saneamento. 1 ed. Belo Horizonte: Fórum, 2021, v. 1, p. 137-146.

Luciana Janes Carneiro

See More Documents Like This

RELATED TOPICS

•   We're Hiring!
•   Help Center
• Find new research papers in:
• Health Sciences
• Earth Sciences
• Cognitive Science
• Mathematics
• Computer Science
• Academia ©2024

Exploring Financial Risks from Corporate Disclosure: Evidence from Italian Listed Companies

• Published: 06 November 2015
• Volume 7 , pages 309–327, ( 2016 )

Cite this article

• Rosa Lombardi 1 ,
• Daniela Coluccia 2 ,
• Giuseppe Russo 3 &
• Silvia Solimene 2  

1201 Accesses

14 Citations

Explore all metrics

The purpose of this paper is to contribute to the existing literature on corporate disclosure by exploring the quality of information on financial risks contained in the annual reports of a sample of non-financial companies listed on the Italian Stock Exchange. The analysis is based on a manual content analysis approach, used to measure the level of financial risk information presented in the annual reports of 50 companies and build a Grid Risk Report. The findings of this paper show the degree of financial risk disclosure, as well as what companies actually disclose in terms of financial risk indices in their Management Reports (in the section covering information on risks and uncertainties), in their Notes to the Financial Statements (in the section on risk management) and, possibly, in their Notes on the Financial Instruments, they hold for to cover risk, for the period between 2008 and 2013. The paper’s findings have practical implications for both stakeholders and managers, giving investors facts about the sort of Italian companies that disclose financial risk information as part of the risk information presented in their annual reports and managers information about the degree of financial risk disclosure that will satisfy their stakeholder disclosure demands.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price includes VAT (Russian Federation)

Instant access to the full article PDF.

Rent this article via DeepDyve

Institutional subscriptions

Similar content being viewed by others

The Impact of Ownership Structure on Risk Disclosure: Evidence from Jordan

Forward-Looking Information Disclosure as a Risk Factor in Accounting—The Case of Poland

Corporate Disclosure

Acharya, V. V., Almeida, H., & Campello, M. (2007). Is cash negative debt? A hedging perspective on corporate financial policies. Journal of Financial Intermediation, 16 (4), 515–554.

Article   Google Scholar  

Avram, K. J., & Skully, M. (2007). Australian banks’ disclosure of operational risk. Monash Business Review, 3 (2), 1–9.

Banghoj, L., & Plenborg, T. (2008). Value relevance of voluntary disclosure in the annual report. Accounting and Finance, 48 (2), 159–180.

Beattie, V. A., McInnes, B., & Fearnley, S. (2002). Through the eyes of management: a study of narrative disclosures. An interim report . London: Centre for Business Performance, The Institute of Chartered Accounts in England and Wales.

Google Scholar  

Bennet, M., Klinkers, L., & James, P. (1999). Sustainable measures: evaluation and reporting of environmental and social performance . Sheffield: Greenleaf Publishing.

Beretta, S., & Bozzolan, S. (2004). A framework for the analysis of firm risk communication. Journal of International Accounting, 39 (1), 265–288.

Beretta, S., & Bozzolan, S. (2008). Quality vs quantity: the case of forward-looking disclosure. Journal of Accounting, Auditing and Finance, 23 (3), 333–375.

Bischof, J., & Daske, H. (2013). Mandatory disclosure, voluntary disclosure, and stock market liquidity: evidence from the EU bank stress tests. Journal of Accounting Research, 51 (5), 997–1029.

Bodnar, G. M., Consolandi, C., Gabbi, G., & Jaiswal-Dale, A. (2013). Risk management for Italian non-financial firms: currency and interest rate exposure. European Financial Management, 19 (5), 887–910.

Bolton, P., Chen, H., & Wang, N. (2013). Market timing, investment, and risk management. Journal of Financial Economics, 109 (1), 40–62.

Bonetti, P., Mattei, M. M., & Palmucci, F. (2012). Market reactions to the disclosures on currency risk under IFRS 7. Academy of Accounting and Financial Studies Journal, 16 (3), 13–24.

Bushee, B. J., & Noe, C. F. (2000). Corporate disclosure practices, institutional investors, and stock return volatility. Journal of Accounting Research, 38 , 171–202.

Cabedo, J. D., & Tirado, J. M. (2004). The disclosure of risk in financial statements. Accounting Forum, 28 (2), 181–200.

Campbell, J. L., & Chen, H. (2011). Environmental disclosure and environmental risk: sceptical attitudes of UK sell-side bank analysts. The British Accounting Review, 43 , 54–64.

Campbell, J. L., Chen, H., Dhaliwal, D. S., Lu, H., & Steele, L. B. (2014). The information content of mandatory risk factor disclosures in corporate filings. Review of Accounting Studies, 19 , 396–455.

Carlon, L., Loftus, J. A., & Miller, M. C. (2003). The challenge of risk reporting: regulatory and corporate responses. Australian Accounting Review, 13 (3), 36–51.

Combes-Thuélin, E., Henneron, S., & Touron, P. (2006). Risk regulations and financial disclosures: an investigation based on corporate communication in French traded companies. Corporate Communications: An International Journal, 11 (3), 303–326.

Del Giudice, M., Carayannis, E. G., & Della Peruta, M. R. (2012). Culture and cooperative strategies: knowledge management perspectives. In Cross-cultural knowledge management . New York: Springer.

Chapter   Google Scholar  

Del Giudice, M., Della Peruta, M. R., & Maggioni, V. (2013). Collective knowledge and organizational routines within academic communities of practice: an empirical research on science—entrepreneurs. Journal of the Knowledge Economy, 4 (3), 260–278.

Deumes, R. (2008). Corporate risk reporting. A content analysis of narrative risk disclosures in prospectuses. Journal of Business Communication, 42 (2), 120–157.

Dionne, G., & Ouederni, K. (2011). Corporate risk management and dividend signaling theory. Finance Research Letters, 8 (4), 188–195.

Dobler, M., Lajili, K., & Zéghal, D. (2011). Attributes of corporate risk disclosure: an international investigation in the manufacturing sector. Journal of International Accounting Research, 10 (2), 1–22.

Dumay, J., Frost, G., & Beck, C. (2015). Material legitimacy. Blending organizational and stakeholder concerns through non-financial information disclosures. Journal of Accounting & Organizational Change, 11 (1), 2–23.

Einhorn, E. (2005). The nature of the interaction between mandatory and voluntary disclosures. Journal of Accounting Research, 43 (4), 593–621.

Elkington, J. (1997). Cannibals with forks. The triple bottom line of 21st century business . Oxford: Capstone Publishing.

Elshandidy, T., Fraser, I., & Hussainey, K. (2013). Aggregated, voluntary and mandatory risk disclosure incentives: evidence from UK FTSE all-share companies. International Review of Financial Analysis, 30 , 320–333.

Eng, L. L., & Mak, Y. T. (2003). Corporate governance and voluntary disclosure. Journal of Accounting and Public Policy, 22 (4), 325–345.

Francis, J., & Schipper, K. (1999). Have financial statements lost their relevance? Journal of Accounting Research, 37 , 319–352.

Froot, K. A., Scharfstein, D. S., & Stein, J. C. (1993). Risk management: coordinating corporate investment and financing policies. The Journal of Finance, 48 (5), 1629–1658.

Gabillon, E., & Gabillon, J. C. (2012). Corporate risk management and information disclosure. Finance, 33 (2), 101–128.

Guthrie, J., Petty, R., Yongvanich, K., & Ricceri, F. (2004). Using content analysis as a research method to inquire into intellectual capital reporting. Journal of Intellectual Capital, 5 (2), 282–293.

Hallikas, J., & Lättilä, L. (2012). Firm positioning and performance in ICT industries sectors. Journal of the Knowledge Economy, 3 (4), 406–420.

Higgins, C. P. (2002). Triple bottom line reporting: the importance of reputation and trust. New Academy Review, 1 (2), 91–112.

Hill, P., & Short, H. (2009). Risk disclosures on the second tier markets of the London Stock Exchange. Accounting & Finance, 49 , 753–780.

Kajüter, P. (2006). Risk disclosures of listed firms in Germany: a longitudinal study, paper presented at the 10th Financial Reporting & Business Communication Conference, July, Cardiff Business School: Unpublished.

Konishi, N., & Ali, M. (2007). Risk reporting of Japanese companies and its association with corporate characteristics. International Journal of Accounting, Auditing and Performance Evaluation, 4 (3), 263–285.

Korosec, B., & Horvat, R. (2005). Risk reporting in corporate annual reports. Economic and Business Review, 7 (3), 217–237.

Lajili, K., & Zéghal, D. (2005). A content analysis of risk management disclosures in Canadian Annual Reports. Canadian Journal of Administrative Sciences, 22 (2), 125–142.

Linsley, P. M., & Shrives, P. J. (2005). Examining risk reporting in UK public companies. Journal of Risk Finance, 6 (4), 292–305.

Linsley, P. M., & Shrives, P. J. (2006). Risk reporting: a study of risk disclosures in the annual reports of UK companies. The British Accounting Review, 38 , 387–404.

Marston, C. L., & Shrives, P. J. (1991). The use of disclosure indices in accounting research: a review article. British Accounting Review, 23 , 195–210.

Mayew, W. J. (2012). Disclosure outlets and corporate financial communication: a discussion of “managers” use of language across alternative disclosure outlets: earnings press releases versus MD&A. Contemporary Accounting Research, 29 (3), 838–844.

Mello, A. S., & Parsons, J. (2000). Hedging and liquidity. Review of Financial Studies, 13 (1), 127–153.

Miihkinen, A. (2013). The usefulness of firm risk disclosures under different firm riskiness, investor-interest and market conditions: new evidence from Finland. Advances in Accounting, Incorporating Advances in International Accounting, 29 , 312–331.

Mohobbot, A. (2005). Corporate risk reporting practices in annual reports of Japanese Companies. Japanese Journal of Accounting, 16 (1), 113–133.

Oliveira, J., Lima Rodrigues, L., & Craig, R. (2011). Voluntary risk reporting to enhance institutional and organizational legitimacy: evidence from Portuguese banks. Journal of Financial Regulation and Compliance, 19 (3), 271–289.

Othman, R., & Ameer, R. (2009). Market risk disclosure: evidence from Malaysian listed firms. Journal of Financial Regulation and Compliance, 17 (1), 57–69.

Papa, M. (2007). Disclosure of risk information in Italian IPO prospectuses: a descriptive analysis of manufacturing and IT companies, 30th Annual Congress of the European Accounting Association, April, Lisbon: Unpublished.

Rajab, B., & Handley-Schachler, M. (2009). Corporate risk disclosure by UK firms: trends and determinants. World Review of Entrepreneurship, Management and Sustainable Development, 5 (3), 224–243.

Shin, H. S. (2006). Disclosure risk and price drift. Journal of Accounting Research, 44 (2), 351–379.

Singhvi, S. S., & Desai, H. B. (1971). An empirical analysis of the quality of corporate financial disclosure. Accounting Review, 46 , 129–138.

Tim, A., Dasgupta, S., & Titman, S. (2007). Financial constraints, competition and hedging in industry equilibrium. The Journal of Finance, 62 (5), 2445–2473.

Yong, H. H. A., Chalmers, K., & Faff, R. (2005). Asia Pacific banks’ derivative and risk management disclosures. Asian Review of Accounting, 13 (1), 15–44.

Zanda, G. (2012). Corporate management in a knowledge-based economy . London: Palgrave MacMillan.

Download references

Author information

Authors and affiliations.

Link Campus University, Rome, Italy

Rosa Lombardi

University of Rome “La Sapienza”, Rome, Italy

Daniela Coluccia & Silvia Solimene

University of Cassino and Southern Lazio, Cassino, Italy

Giuseppe Russo

You can also search for this author in PubMed   Google Scholar

Corresponding author

Correspondence to Rosa Lombardi .

Rights and permissions

Reprints and permissions

About this article

Lombardi, R., Coluccia, D., Russo, G. et al. Exploring Financial Risks from Corporate Disclosure: Evidence from Italian Listed Companies. J Knowl Econ 7 , 309–327 (2016). https://doi.org/10.1007/s13132-015-0329-5

Download citation

Received : 14 October 2015

Accepted : 28 October 2015

Published : 06 November 2015

Issue Date : March 2016

DOI : https://doi.org/10.1007/s13132-015-0329-5

Share this article

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

• Financial risks
• Corporate disclosure
• Risk disclosure
• Risk management
• Find a journal
• Publish with us
• Track your research

To read this content please select one of the options below:

Please note you do not have access to teaching notes, determinants of corporate social performance disclosure: a literature review.

Social Responsibility Journal

ISSN : 1747-1117

Article publication date: 4 May 2020

Issue publication date: 26 May 2021

This review aims to identify the determinants of voluntary disclosure of corporate social performance (CSP) and to analyze and consolidate previous quantitative studies to identify the theoretical perspectives and the variables used in measuring the determinants of CSP disclosure (CSP-D).

Design/methodology/approach

A literature review of articles published from 1987 to 2015 was conducted using the three databases, Ebsco, ISI and Jstor, with CSP-D as the dependent variable. The goal was to identify the theoretical perspectives underlying the studies and the independent variables.

The literature revealed a set of variables and their general measures, but the consensus confirmed that there was no single explanation for what determined CSP-D. The published theories that support a relationship between CSP-D and its determinants are legitimacy, institutional, stakeholder, agency and voluntary disclosure theory.

Originality/value

The results allowed us to identify the perspectives underlying the major theories and disclosed a set of factors considered by the literature as the ones that influence CSP-D. This information will be useful for researchers interested in developing their own studies on CSP-D because it presents the evolution of CSP-D factors over time and organizes the findings of multiple studies developed since the emergence of the theme.

• Agency theory
• Stakeholder
• Institutional
• Determinants

Acknowledgements

This research was partially supported by the Brazilian Research Council (CNPq) and Brazilian National Council for the Improvement of Higher Education (CAPES).

Garcia, E.A.d.R. , Carvalho, G.M.d. , Boaventura, J.M.G. and Souza Filho, J.M.d. (2021), "Determinants of corporate social performance disclosure: a literature review", Social Responsibility Journal , Vol. 17 No. 4, pp. 445-468. https://doi.org/10.1108/SRJ-12-2016-0224

Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

Related articles

We’re listening — tell us what you think, something didn’t work….

Report bugs here

All feedback is valuable

Please share your general feedback

Join us on our journey

Platform update page.

Visit emeraldpublishing.com/platformupdate to discover the latest news and updates

Questions & More Information

Answers to the most commonly asked questions here