Mar 01, 1990 northholland voluntary disclosure with a strategic opponent alfred wagenhofer unioersitv of technology, vienna, a1040 vienna, austria received june 1989, final version received december 1989 this paper analyzes voluntary disclosure strategies of a privately informed firm when the information is relevant for the market price of the firm and also for an opponent. The taxable person can then click on the vat 211 voluntary disclosure tax assessment tab to see a summary of the submitted voluntary disclosures. Jul 17, 2016 recent studies, starting with hanley weiss and hoberg 2010, have used textual analysis to document that voluntary disclosure of information in ipo prospectuses is associated with lower ipo underpricing. Voluntary disclosure and earnings management abstract discretion pervades the accounting rules. State antitakeover laws and voluntary disclosure volume 48 issue 2. The interpretation of information and corporate disclosure strategies. I find that, consistent with prior studies, earningsrelated voluntary disclosures occur infrequently on average, one disclosure for every ten quarterly earnings announcements. Voluntary disclosure of profit forecasts by target. Options trading and corporate voluntary disclosure1. In particular, the well known unraveling result when the manager is always informed and when disclosure is costless the typical uppertailed disclosure region in classic voluntary disclosure models need not obtain when informed managers can use repurchases to extract information rents. Insider trading and voluntary disclosures cheng 2006. We examine voluntary disclosures of information about corporate strategies. Wagenhofervoluntary disclosure with a strategic opponent journal of accounting and economics, 12 4 1990, pp.
We will critically read each study, evaluate its contribution to the literature, and explore unresolved issues. We model this tradeoff and show that it shapes disclosure strategies of informed. Accounting discretion, voluntary disclosure informativeness. Pdf applying voluntary disclosure theories to intangibles. This paper analyzes a setting in which a firms manager can credibly disclose facts, but not their valuation. Firms appear to use these voluntary disclosures to maximize shareholder value and credibly convey private information. Disclosure, competition, and learning from asset prices mit sloan. Aug 27, 2014 based on annual report data for a sample of 118 companies listed on the australian stock exchange, this study provides further empirical evidence of the association between the voluntary disclosure of segment information and a firms level of diversification.
Voluntary compliance program for retailers with inventory in pennsylvania. This paper develops a theory of strategic information disclosure with disagreement. Theories related to voluntary disclosure that are commonly used through. Some results from economic theory andrew daughety department of economics and law school vanderbilt university conference on transparency and accountability. Managers exploit disclosure to reduce information asymmetry and adverse selection problem healy and palepu 2001. Doj issues new policy regarding voluntary disclosures of. Historical accounting and the endogenous credibility of current. Voluntary disclosure of segment information in a regulated.
Is there a minimum amount of tax liability in order to apply for voluntary disclosure through the multistate voluntary disclosure program. The taxpayer should apply directly with a nonparticipating state. Wagenhofer, voluntary disclosure with u strategic opponent rium, there can exist partialdisclosure equilibria which consist of two distinct nondisclosure. Corporate strategy and information disclosure personal. A common response is that consumers should have control over their data and the ability to choose how firms access it. On the other hand, strategic non disclosure can help them secure higher expected prices in equilibrium e. Voluntary disclosure is the extension of corporate information besides the mandatory regulation and shareholder activism is a legal person that hold a particular amount of share in a registered firm. Abstract this paper analyzes voluntary disclosure strategies of a privately informed firm when the information is relevant for the market price of the firm and also. Oct 20, 2020 see the instructions attached to the form 14457, voluntary disclosure practice preclearance and application pdf, for the most current voluntary disclosure procedures.
Crossref chi keung man, management earnings forecasts and financial distress by credit ratings, ssrn electronic journal, 10. Information quality and discretionary disclosure sciencedirect. Sorry, we are unable to provide the full text but you may find it at the following locations. Gao14265r, irss offshore voluntary disclosure program.
Jenny zha, voluntary disclosure of strategic alternatives. Using a model that captures how direct disclosures and share repurchases di. With voluntary disclosure there is a positive probability of. Pdf strategic information disclosure when there is fundamental. Dec 23, 2018 we also find that controlling for periodic mandatory disclosure does not affect the relationship between voluntary disclosure and the cost of capital, while controlling for event. Pdf theories and determinants of voluntary disclosure.
Strategic withholding and imprecision in asset measurement. Sep 01, 2008 traditional models of voluntary disclosure assume that firms can credibly disclose information when they choose to disclose, and disclosures are thus accurate at all times. Do detail and its verifiability serve as indicators of. Audit data analytics of unregulated voluntary disclosures and. Adverse selection and voluntary disclosure in financial markets. Intertemporal dynamics of corporate voluntary disclosures. Hence, the effect of stock options trading on managers voluntary disclosure is an empirical. Voluntary disclosure is the provision of information by a companys management beyond requirements such as generally accepted accounting principles and securities and exchange commission rules, where the information is believed to be relevant to the decisionmaking of users of the companys annual reports voluntary disclosure is carried out by many companies, although the extent and type of. The department of revenue is offering a 90day voluntary compliance program for any business that has inventory or stores property in pennsylvania but is not registered to collect and pay pennsylvania taxes. Voluntary disclosure is the provision of information by a companys management beyond requirements such as generally accepted accounting principles and securities and exchange commission rules, where the information is believed to be relevant to the decisionmaking of users of the companys annual reports. State antitakeover laws and voluntary disclosure journal of. Competitive disadvantage and discretionary disclosure in. This dissertation studies a firms decision to voluntarily disclose that it is seeking strategic alternatives, effectively setting out to explore the potential sale or merger of the company. Multistate voluntary disclosure improvement team progress.
This paper establishes a casual relation between product market competition and key dimensions of voluntary disclosure using a quasinatural experiment. Voluntary disclosure of press releases and the importance. The study is concerned with the usefulness of using audit data analytics of unregulated voluntary disclosures in reducing the auditing expectations gap. It pays attention to the costs and benefits of voluntary disclosure. Voluntary disclosure is an important way mangers use to communicate with outside investors about the future prospects of the firm hirst et al. Wagenhofer, a 1990, voluntary disclosure with a strategic opponent, journal of accounting and economics 12, 3463. Drawing on prior corporate disclosure research, this study examines factors associated with voluntary disclosure of four types of information. Voluntary disclosures and information production by analysts. Voluntary disclosure of bad news, journal of business. Click on the image to enlarge for details on making a payment based on the voluntary disclosure, please refer to the ftas payment guide. Voluntary disclosure, mandatory disclosure and the cost of.
Pdf voluntary disclosure of segment information in a. Corporate voluntary disclosure is one of the broad topics in accounting. Proponents argue that allowing discretion enables managers to incorporate more information in their disclosures, while opponents believe that. In our setting, information has real effects because the firm uses it to make a continuous operating decision, increasing in the markets belief. Voluntary disclosure and strategic stock repurchases. Voluntary disclosure models focus on managers discretion in deciding whether or not to provide truthful voluntary disclosure to the capital market. Feb 06, 2017 in particular, the well known unraveling result when the manager is always informed and when disclosure is costless the typical uppertailed disclosure region in classic voluntary disclosure models need not obtain when informed managers can use repurchases to extract information rents.
By analyzing managers disclosure strategy when disclosure is voluntary and not. Wagenhofer 1990 analyzes voluntary disclosure strategies of a. Thakor published strategic information disclosure when there is. Voluntary disclosure with a strategic opponent, journal of accounting and economics, elsevier, vol. This article examines whether detail and its verifiability serve as indicators of strategy effectiveness and provide sources of credibility in voluntary qualitative disclosure. Introducing such uncertainty affects the managers disclosure strategy in two important ways. Voluntary financial disclosure in an entry game with continua of types. Voluntary disclosure with a strategic opponent sciencedirect. Earnings management models, on the other hand, concentrate on managers discretion in deciding how to bias their mandatory disclosure. An important feature of the index fund setting is that index funds are sold as a mutual fund. Voluntary information disclosure at ipo by laura bottazzi. Pdf this paper aims to discuss the theoretical aspects of voluntary disclosure.
Voluntary disclosure with informed trading in the ipo market. Voluntary disclosure with a strategic opponent core. Wagen hofer, voluntary disclosure with a strategic opponent 359 however, extensions like this add only to the complexity without leading to different results because the main assumption driving the results of this paper is the behavior of the net firm value contingent on the information. Accordingly, we expect biotechnology firms to be strategic in their voluntary. Favorable information increases the market price but might induce the opponent to take a discrete action that. It presents a comprehensive comparison of voluntary disclosure theories and relates each of the theories to the type of information disclosure being. Pdf why firms voluntarily disclose badnews semantic scholar. Voluntary disclosure and earnings management abstract. Jenny zha this dissertation studies a firms decision to voluntarily disclose that it is seeking strategic alternatives, effectively setting out to explore the potential sale or merger of the company. The self disclosure must occur prior to an imminent threat of disclosure or government investigation. Costly disclosures in a voluntary disclosure model with an. In this course we will discuss a number of studiesanalytical, archival, or experimentalthat address issues in voluntary disclosure.
Its purpose is to identify guidelines that firm management might consider when voluntarily disclosing or mandatorily reporting information to investors and also factors that investors might recognize when using a firms disclosure. The empirical findings aim to explain 1 to what extent the level of voluntary disclosure of listed firms in the. Irs criminal investigation voluntary disclosure practice. In an effort to deliver exceptional customer service, the department of revenue offers a voluntary disclosure program that is designed for businesses and individuals who have recently become aware of their pennsylvania tax obligations to resolve their accounts without paying penalties the employees who administer the program for the department work with local, national and international law. Full references including those not matched with items on ideas. The manager is not limited in her disclosure opportunities but disclosure is costly. Favorable information increases the market price but might induce the opponent to take a discrete action that imposes proprietary costs on the firm.
Tilburg university voluntary disclosure of information when firms are. The uae fta publishes guide on voluntary disclosures for. This paper analyzes voluntary disclosure strategies of a privately informed firm when the information is relevant for the market price of the firm and also for an. A study of voluntary disclosure by listed firms in china. This paper analyzes voluntary disclosure strategies of a privately informed firm when the information is relevant for the market price of the firm and also for an opponent. We develop a model in which managers choose whether to reveal their strategic. This effect is expected to be of larger magnitude for firms 1 with a long history of absence of voluntary disclosures and an impressive past operating performance, or 2 that operate in a relatively stable and predictable business and information environment, or 3 whose managers have a long time horizon and a high degree of risk aversion. Voluntary disclosure and strategic stock repurchases by. Epa announces renewed emphasis on selfdisclosed violation. This study constructs an empirical model of voluntary disclosure using an index fund setting to demonstrate that voluntary disclosure increases stock liquidity. University of florida acg7886 accounting research seminar. Voluntary disclosure with evolving news cyrus aghamolla byeongje any february 18, 2018 we study a dynamic voluntary disclosure setting where the managers information and the rms value evolve over time. A common response to these concerns is that consumers.
Wagenhofer a 1990 voluntary disclosure with a strategic opponent. An incomplete form can be saved by clicking on save as draft or the form can be cancelled by clicking the cancel button the taxable person can then click on the vat 211 voluntary disclosure tax assessment tab to see a summary. Pdf product market competition and firms voluntary. Voluntary disclosure of evidence in plea bargaining. Voluntary disclosure and personalized pricing preliminary and incomplete s. The new policy identifies three necessary elements of a voluntary disclosure. In other words, a company should not wait to selfdisclose until it is facing a threat of government action. Previous studies show that movement toward both voluntary disclosure and. We find that firms tend to make less voluntary disclosure.
Pdf strategic accounting disclosure semantic scholar. The interpretation of information and corporate disclosure. Does nnp staff handle an application for voluntary disclosure with a state that is not a participant in the mvdp. Frequently asked questions about the multistate voluntary. Disclosure of environmental information by canadian. Nageeb ali greg lewis shoshana vasserman december 5, 2019 abstract a concern central to the economics of privacy is that firms may use consumer data to price discriminate. Consequently, he is uncertain as to how those disclosed facts will be interpreted by investors. Our results reveal factors that influence the voluntary disclosure of intangibles in the small european capital market of a country where managers generally do. First, it becomes a function of the markets prior valuation of the firm since that.
Voluntary disclosure with a strategic opponent semantic scholar. We provide a bridge between the voluntary disclosure and the earnings management literature. Voluntary versus mandatory disclosure springerlink. Voluntary disclosure is carried out by many companies, although the extent and type of voluntary disclosure differs by geographic region, industry, and company size.
This paper provides evidence on corporate voluntary disclosure practices through an examination of the earningsrelated disclosures made by a random sample of 93 nasdaq firms during 198190. We employ an alternative measure and model the issuers choice of information disclosure, documenting what factors lead to higher disclosure. This monograph surveys the analytic accounting disclosure literature in which firms strategically communicate information to investors. This paper analyzes a setting in which a firms manager can credibly disclose facts, but not their valuation implications. Our study suggests that a firms disclosure environment includes the. State antitakeover laws and voluntary disclosure journal. I study voluntary disclosure of duopoly firms when they learn information from asset prices. A costbenefit analysis, ssrn electronic journal, 10. Determinants of voluntary disclosures in kenyan companies. Accounting discretion, voluntary disclosure informativeness, and investment efficiency xu jiang.
First, from a utilitarian point of view, mandatory disclosure of evidence is e cient because and agreement is always reached during the plea bargaining process, and the prosecutor never incurs the cost of going to trial. In contrast, if option trading constrains information withholding, the predication would be a positive association between option trading and voluntary disclosure. Voluntary disclosure with a strategic opponent econpapers. Voluntary disclosure and strategic stock repurchases abstract we study the choice of disclosure and share repurchase strategies of informed managers. Wagenhofer, alfred, 1990, voluntary disclosure with a strategic opponent, journal of accounting and economics, this issue. It argues that the lack of credibility and assurance of the unstructured voluntary disclosures and other big data will impact the level of public users expectations towards the quality of these unregulated voluntary disclosures. Voluntary disclosure of information in a setting in which. Voluntary disclosure with a strategic opponent, 1992. Voluntary disclosure and risk sharing researchgate. The uae fta publishes guide on voluntary disclosures for vat. Nageeb aliy greg lewisz shoshana vassermanx november 16, 2018 abstract a concern central to the economics of privacy is that rms may use consumer data to price discriminate. Finally, it should be noted that opponents to annual reports argue that.
857 1004 1518 375 1608 1030 303 384 673 1106 614 927 229 1243 68 680 1943 1012 1414 23 845 279 1200 276 315 1177 1018