Voluntary Disclosure Practices: A Systematic Review of Literature

Abstract

: Nowadays, presence of information asymmetry and lack of enhanced disclosure influences the investors to make investment decisions wisely. The importance of voluntary disclosure in annual reports has increased manifold as lower information availability carries more risk premium for investors. Corporate Scandals across the globe shattered the confidence of investors and enhances the significance of disclosure in annual reports. The purpose of the study is to provide better insights of voluntary disclosure practices and measurement context of voluntary disclosure used by researchers. The study reviewed 50 research papers taken from relevant research databases such as Emerald, JSTOR, Scopus (Elsevier), Science Direct (Elsevier) and SSRN-Social Science Research Network for the period starting from 1998 to 2020. The results of study indicated that seventy percent of studies used self-constructed index to measure voluntary disclosure and 26 percent of papers provided information relating to corporate social components and the extent of disclosure provided by companies is least due to presence of information cost.