Financial Accounting and Equity Markets

Philip Brown, Stephen L. Taylor and Terry S. Walter

The Impact of Statutory Sanctions on the Level and Information Content of Voluntary Corporate Disclosure

This article examines the effect of statutory civil and criminal sanctions on voluntary corporate disclosures by firms listed on the Australian Stock Exchange (ASX). Apart from direct investigation of the quantity of voluntary disclosure, we also investigate several possible consequences of altered corporate disclosure policies, namely properties of analysts’ forecasts, the degree to which share prices anticipate the information content of periodic earnings reports, and the relationship between volatility and corporate disclosures. Results suggest that, post-sanctions, any increase in voluntary ...