Mandatory Financial Reporting Processes and Outcomes

Matthew Bamber, Kevin McMeeking and Nikola Petrovic

The International Journal of Accounting, 2018, vol. 53, issue 3, 227-245

Abstract: In an extension to the mandatory financial reporting literature, we consider compliance and applicability as intermediate stages in the disclosure decision process, and investigate to what extent these measures explain any variance in the quantity of disclosure. We use financial instruments disclosures as our empirical context because of the level of complexity and diversity of the mandatory requirements. We find that neither applicability nor compliance show statistically significant association with disclosure quantity. By contrast we find that a firm's financial instruments management programme is an important determinant of both applicability and quantity. Finally, we demonstrate the economic consequences of applicability, compliance and quantity through their association with audit fees. For companies that use financial instruments management programmes to a greater extent, audit fees are higher. In contrast, the quantity of financial instruments disclosures appears to reduce audit fees.

Keywords: Applicability; Compliance; Quantity; Financial instruments; Financial reporting; Audit fees (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:accoun:v:53:y:2018:i:3:p:227-245

DOI: 10.1016/j.intacc.2018.08.001

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