Determinants of voluntary disclosure of financial information: literature review

Abstract

The purpose of this work is to highlight the motivations or determinants that encourage companies to go beyond regulatory obligations by disclosing their financial information voluntarily. This issue will remain relevant as long as mandatory communication is restricted. Indeed, regulatory communication obliges companies to communicate a certain amount of information, except that this is often considered insufficient since the information communicated does not always reflect the real situation of the company with full transparency. Our article will present a comparison between different studies carried out on a multitude of samples of companies around the world, in order to have a more global vision between the different types of companies that have chosen to disclose more information as well as the various reasons behind this choice. By comparing the results of different studies, companies will be able to choose between moving towards voluntary disclosure, or simply communicating what is strictly necessary. Bankruptcy or financial distress may motivate executives to disclose more information in their annual reports, but not only, but the choice of corporate information dissemination strategy is also just as important. The comparison of the strong and weak points of the various studies moreover by accentuating on the circumstances in which information becomes voluntary, will allow a more obvious choice of communication strategy on the part of the leaders.

JEL Classification : G 30

Paper type: Theoretical Research