Appendix 2.Annotated bibliography on confirmatory disclosure index studies (Text subsection: International confirmation)
Author(s): Choi (1973)
Sample Number - Source (dates): 72 firms that are Eurobond participants - annual reports (participants prior to July 1971)
Method(s): Matched pairs
Index: 36 unweighted and weighted items, based on investor decision framework and literature
Findings: Entry to the European capital market is related to improvements in disclosure.
Author(s): Barrett (1975)
Sample Number - Source (dates): 103 firms: U.S. (15), Japan (15), U.K. (15), France (15), Germany (15), Sweden (15), and the Netherlands (13) - annual reports (1963-72)
Method(s): Comparison of disclosure indices and subindices
Index: 17 unweighted and weighted items, based on literature and judgment
Findings: The overall extent and quality of American annual report disclosure is not better than that of British firms. In specific disclosure areas there are also differences between countries.
Author(s): Barrett (1976)
Sample Number - Source (dates): 103 firms: U.S. (15), Japan (15), U.K. (15), France (15), Germany (15), Sweden (15), and the Netherlands (13) - annual reports (1963-72)
Method(s): Disclosure scores and frequencies of disclosed items
Index: 17 unweighted and weighted items, based on literature and judgment
Findings: The extent of disclosure improves throughout 1963-72. There is a wide variance between the disclosure of American and British firms, on the one hand, and the level of disclosure of firms from the other five countries, on the other. These results reinforce the view that the quality of disclosure and the degree of efficiency of national markets are related.
Author(s): Barrett (1977)
Sample Number - Source (dates): 103 firms: U.S. (15), Japan (15), U.K. (15), France (15), Germany (15), Sweden (15), and the Netherlands (13) - annual reports (1963-72)
Method(s): Disclosure scores and frequencies of disclosed items
Index: 17 unweighted and weighted items, based on literature and judgment
Findings: The extent of financial disclosure in the annual reports of U.S. firms is greater on average (but not uniformly in specific categories of disclosure) than it is for firms in Japan, France, Germany, Sweden, and the Netherlands.
Author(s): Chenhall & Juchau (1977)
Sample Number - Source (dates): 1,025 active individual investors - questionnaire (1975)
Method(s): Disclosure scores in different investor populations
Index: 37 items, previous literature and Accounting Standards Steering Committee
Findings: Risk-averse investors and those preferring high dividends value information on: (1) expected future dividend yields, (2) past dividend yield, and (3) ease of transfer of old shares. Investors accepting high risk and low dividends value information on: (1) leverage and (2) budgeted statements of performance and position.
Author(s): Firth (1978)
Sample Number - Source (dates): 750 respondents: 250 financial directors, 250 auditors, 120 financial analysts, and 130 loan officers - questionnaire (undated)
Method(s): Differences in rankings
Index: 75 items, based on literature, recent annual reports, and discussions with users
Findings: Finance directors and auditors have somewhat similar views. Financial analysts and bank loan officers have somewhat similar views. However, users (analysts, officers) attach higher importance to directors' disclosures than do preparers (directors, auditors).
Author(s): Firth (1979a)
Sample Number - Source (dates): 100 manufacturing firms (every 10th of the Times 1,000 largest firms) - annual reports (1976)
Method(s): Actual disclosure vs. analysts' ranking
Index: 48 weighted items, based on literature and questionnaire (120 professional financial analysts)
Findings: Disclosure levels are very low. Two major reasons are postulated: (1) preparers of annual reports are unaware of the importance of some items for users and (2) the confidential nature of some information.
Author(s): Firth (1979b)
Sample Number - Source (dates): 40 nonlisted manufacturing firms and 100 listed manufacturing firms - annual reports (1976)
Method(s): Disclosure scores in different groups
Index: 48 weighted items, based on literature and questionnaire of disclosure (120 financial analysts)
Findings: Listed firms and large firms tend to provide greater disclosures in their annual reports than do unlisted firms and small firms. The firms auditing the books of the sample firms do not affect the level of disclosure.
Author(s): Firth (1980)
Sample Number - Source (dates): 6 different samples of manufacturing firms (3 issuing groups and 3 nonissuing groups) - annual reports (1972-73)
Method(s): Differences in disclosure scores
Index: 48 unweighted and weighted items, based on literature and experts' weightings
Findings: Small firms (but not large ones) increased their disclosure when issuing new stock.
Author(s): Spero (1979)
Sample Number - Source (dates): 60 firms: France (20), U.K. (20), and Sweden (20) - annual reports (1964/1967/1970/1972)
Method(s): Regression
Index: Replication of some previous indices, adjusted for voluntary disclosure, and 3 of the author's own
Findings: The firm's need for capital explains voluntary disclosure. Furthermore, disclosure increases in each sample country during the research period: 1964-72.
Author(s): Nair & Frank (1980)
Sample Number - Source (dates): 38 countries - 233 accounting principles and reporting practices (1973). 46 countries - 264 principles and practices (1975)
Method(s): Factor and discriminant analyses
Index: 6 classification categories for principles and practices (1973), 7 classification categories for principles and practices (1975)
Findings: The groupings of countries by disclosure practices are different from groupings based on measurement practices. Also the underlying environmental variables most closely associated with the practices are different. The results have implications for: (1) the comparability of financial statements and (2) accounting harmonization.
Author(s): Amernic & Maiocco (1981)
Sample Number - Source (dates): 60 Canadian firms - annual reports (1967/1972/1977)
Method(s): Differences in disclosure scores, ANOVA
Index: 42 weighted items, based on literature and judgment
Findings: Significant and consistent increases in the mean disclosure score are detected over the period examined. There is a detectable industry effect related to disclosure in 1972. 1977 may also contain this relation. Canadian firms' cross-listing on a U.S. exchange is linked to improved disclosure.
Author(s): Firth (1984)
Sample Number - Source (dates): 40 nonlisted manufacturing firms and 100 listed manufacturing firms - annual reports (1976)
Method(s): Regression
Index: 48 weighted items, based on literature and questionnaire (120 financial analysts)
Findings: No significant association between the amount of disclosure and the level of stock market risk exists.
Author(s): Chow & Wong-Boren (1987)
Sample Number - Source (dates): 52 Mexican Stock Exchange firms - annual reports (1982)
Method(s): Regression
Index: 24 unweighted and weighted items, based on experts' review and literature
Findings: Large firms voluntarily disclose more than do small firms.
Author(s): Cooke (1989a)
Sample Number - Source (dates): 90 firms: 38 unlisted, 33 listed on the Swedish Stock Exchange, 19 listed on both the Swedish and at least 1 foreign stock exchange - annual reports (1985)
Method(s): Regression
Index: 224 unweighted items, based on literature, institutional recommendations, law, and practicing accountants
Findings: Listing status and size explain the extent of disclosure.
Author(s): Cooke (1989b)
Sample Number - Source (dates): 90 firms: 38 unlisted, 33 listed on the Swedish Stock Exchange, 19 listed on both the Swedish and at least 1 foreign stock exchange - annual reports (1985)
Method(s): Regression
Index: 146 unweighted items, based on institutional recommendations, literature, and practicing accountants
Findings: Listing status and size are major explanatory variables for voluntary disclosure. In addition, firms categorized as "trading" disclose information less voluntarily than do firms in other industries.
Author(s): Gray & Roberts (1989)
Sample Number - Source (dates): 212 British multinational firms - questionnaire (1984)
Method(s): Interviews and disclosure rankings
Index: 34 items, questionnaire
Findings: Stock market pressures appear to dominate political pressures in encouraging voluntary disclosures. Indirect costs of competitive disadvantage are important in disclosure policy decisions.
Author(s): Tuominen (1991)
Sample Number - Source (dates): 72 publicly listed firms and firms on the broker list on the Finnish stock market - annual reports (1976/1980/1984)
Method(s): Discriminant analysis, latent structure analysis, and principal component analysis
Index: 223 items, based on literature and regulation
Findings: Over time, disclosure policy has become more comprehensive and diversified.
Author(s): Priebjrivat (1992)
Sample Number - Source (dates): 63 firms operating in the Securities Exchange of Thailand - annual reports (1989)
Method(s): Regression
Index: 27 unweighted and weighted items, based on literature, regulation, judgment, annual reports, and financial analysts
Findings: Level of disclosure is not related to capital costs as measured by beta and return variance. Voluntary disclosure is related to: (1) size, (2) ownership structure, (3) capital structure, and (4) audit firm (local/international). Overall, the results with unweighted and weighted indices are substantially equivalent.
Author(s): Susanto (1992)
Sample Number - Source (dates): 98 Jakarta Stock Exchange listed firms - annual reports (1990)
Method(s): Regression
Index: 30 weighted items, based on literature, questionnaire, and interviews
Findings: Nationality (domestic/foreign) of a firm, new regulations, and size are related to disclosure.
Author(s): Williams (1992)
Sample Number - Source (dates): 316 firms in 13 countries - annual reports (the most recent annual report requested on February 1990)
Method(s): Regression
Index: 43 weighted items, based on literature
Findings: Size and profitability are significantly and positively related to disclosure. Results also indicate that nationality is an important determinant of disclosure.
Author(s): Giner Inchausti (1993, April)
Sample Number - Source (dates): 138 Valencia Stock Exchange listed firms - annual reports (1989-91)
Method(s): Regression, panel data analyses
Index: 50 unweighted items, based on literature and regulation
Findings: Size, auditing firm, and listing status are related to disclosure.
Author(s): Gray, Meek, & Roberts (1994, April)
Sample Number - Source (dates): 116 U.S., 64 U.K., and 100 Continental European multinational firms - annual reports (1989)
Method(s): ANOVA
Index: 128 unweighted items, based on an analysis of international trends, actual reporting practices, and literature
Findings: The results show that there are significant differences in financial reporting between internationally listed and domestically listed firms.
Author(s): Raffournier (1994, April)
Sample Number - Source (dates): 161 Swiss listed firms - annual reports (1991)
Method(s): Regression
Index: 30 unweighted items, based on EU directives
Findings: Disclosure is related to size and degree of internationalization of a firm.
Author(s): Schadewitz & Blevins (1996a)
Sample Number - Source (dates): 40 HSE listed firms - interim reports (1986-89)
Method(s): Regression, unexplained earnings portfolios
Index: Abnormal performance index (API)
Findings: Unexpected disclosures are found to impact prices for a 10 day period, beginning with the announcement date for both permanent and for total earnings.
Author(s): Schadewitz & Blevins (1996b)
Sample Number - Source (dates): 64 HSE listed firms - interim reports (1985-93)
Method(s): Actual disclosure vs. forecasted disclosure, regressions
Index: 26 items, based on literature, recent interim reports, and in-depth interviews
Findings: A significant relationship is found to exist between the degree of disclosure and: (1) governance, (2) business risk, (3) growth, (4) growth potential, (5) size, and (6) regulation.
From Disclosure Indices to Business Communication: A Review of the Transformation by Schadewitz and Blevins
