Appendix 1. Annotated bibliography on pioneering disclosure index studies (Text subsection: Early U.S. evidence)

Author(s): Cerf (1961)

Sample Number - Source (dates): 258 NYSE, 113 other exchanges and 156 OTC firms - annual reports (1 July 1956-30 June 1957)

Method(s): Regression

Index: 31 weighted items

Findings: A positive relation between disclosure and: (1) asset size, (2) number of stockholders, and (3) profitibility exists.

Author(s): Copeland & Fredericks (1968)

Sample Number - Source (dates): 200 NYSE listing applications (1964)

Method(s): Rank correlations

Index: Six specific indices, one for each of six specific purposes for listing a stock

Findings: A positive relationship between materiality and disclosure exists. This relationship, however, is statistically insignificant.

Author(s): Singhvi (1968)

Sample Number - Source (dates): 100 of the Fortune 500 firms and 50 OTC firms - 10-Ks and annual reports (1 April 1965-31 March 1966)

Method(s): Classification and tabulation

Index: 32 items

Findings: Firms publish a narrower range of financial information in their annual reports than they divulge to the SEC.

Author(s): Singhvi & Desai (1971)

Sample Number - Source (dates): 100 NYSE and 55 OTC firms - annual reports (1 April 1965-31 March 1966)

Method(s): Regression

Index: 34 weighted items

Findings: Firms disclosing inadequate information tend to be: (1) small, (2) free from listing requirements, (3) audited by small CPA firms and (4) less profitable. In addition, they tend to have more volitile stock prices.

Author(s): Buzby (1974)

Sample Number - Source (dates): 44 NYSE and AMEX firms plus 44 OTC firms - annual reports (30 June 1970-30 June 1971)

Method(s): Rank correlations

Index: 38 weighted items

Findings: The correlation between the relative importance of the items and the extent of their disclosure is low.

Author(s): Buzby (1975)

Sample Number - Source (dates): 44 NYSE and AMEX firms plus 44 OTC firms - annual reports (30 June 1970-30 June 1971)

Method(s): Matched pairs

Index: 39 weighted items

Findings: A positive relation between disclosure in annual reports and the size of company assets exists. Disclosure and listing status are not related.

Author(s): Stanga (1976)

Sample Number - Source (dates): 80 of the Fortune 1,000 firms - annual reports (31 October 1972-30 September 1973)

Method(s): Disclosure scores and frequencies of disclosed items

Index: 79 weighted items

Findings: Many disclosure deficiencies exist. Firm size, among large industrial firms, is not an important factor in explaining disclosure. The industrial sector of the sample firms is related to the extent of disclosure.

Author(s): Garsombke (1979)

Sample Number - Source (dates): 100 NYSE firms - annual reports (1 April 1965-31 March 1966)

Method(s): Regression

Index: 34 weighted items--identical to Singvhi & Desai (1971)

Findings: Disclosure and risk are not related.

See the subsection of the text entitled: Early U.S. evidence) for a discussion of this research area.

From Disclosure Indices to Business Communication: A Review of the Transformation by Schadewitz and Blevins