Strategy and business model disclosures in annual reports: The role of legal regime

Vasiliki Athanasakou, Abdlmutaleb Boshanna, Natalia Kochetova and Georgios Voulgaris

The British Accounting Review, 2024, vol. 56, issue 3

Abstract: We examine the role of legal regime in the use and usefulness of management disclosures relating to firm strategy and the business model (SBM disclosures). We conduct our analysis in the bijural Canadian setting, where firms operate under either common law (CL) or French Civil law (FCL), depending on where they are headquartered. We find that SBM disclosures vary in length and usefulness across legal regimes. Quebec firms operating under a FCL legal regime produce less extensive SBM disclosures, but such disclosures have a more pronounced information asymmetry-reducing effect, as compared to those of firms operating in CL jurisdictions. Our analysis introduces legal liability risk related to the legal regime as an additional factor that shapes SBM disclosures in the annual reports. Our findings can be of interest to the IASB and the national accounting standard setters as they develop SBM disclosure-related implementation guidance across various jurisdictions.

Keywords: Strategy and business model reporting; Information asymmetry; Corporate Disclosures; Legal Regime; Canada (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:bracre:v:56:y:2024:i:3:s0890838923000203

DOI: 10.1016/j.bar.2023.101190

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