Explaining voluntary disclosure of financial ratios by Australian listed companies
Harrison, JL & Morton, A 2009, 'Explaining voluntary disclosure of financial ratios by Australian listed companies', 32nd European Accounting Association Congress, Tampere, Finland, 12-15 May, EAA, Brussels, Belgium.
In this study we examine factors influencing voluntary disclosure of financial ratios in the annual reports of Australian listed companies. In particular, we examine the extent to which signalling theory, agency theory, corporate governance quality, and control variables, such as size and industry, can explain the amount of space devoted to voluntary ratio disclosures. Our analysis considers two time periods – before and after the introduction of international financial reporting standards, with a sample of 96 companies in the first period and 93 of the same companies in the second period. The results suggest that greater profitability, more independent boards of directors and greater company size are associated with greater space being devoted to ratio disclosures. Confidence in these results is enhanced by their consistency across the two time periods. In summary, this research provides support for signalling theory and for greater quality of corporate governance.