Abstract:
Purpose –This study examines the extent and determinants of voluntary
disclosure of companies listed in Colombo Stok Exchange (CSE).
Design/methodology/approach – Complying with the previous empirical studies
on corporate voluntary disclosures, this study surveyed the annual reports of 43
randomly drawn sampled firms using 60 disclosure items constructed into three
voluntary disclosure indices namely the corporate strategic disclosure index (CSDI),
financial and capital market information disclosure index (FCMDI), social
reporting disclosure index (SRDI). The samples firms were observed for three
reporting periods from 2016 through 2018. Data was analyzed using descriptive
statistics, correlation, and OLS regression analysis.
Findings – The study found that the extent of voluntary disclosures by firms listed
in CSE gradually grew over the years. The extent of disclosure of such corporate
strategic information as ‘ways of improvement in product/service quality and the
customer service’, ‘research development activities, and ‘future product and
development’ is relatively higher than the other corporate and strategic
information surveyed. Financial and capital market-related disclosure items that
reflect on companies’ market value have been disclosed relatively at higher rates
then the items that connect to the assessment of current and potential risk, return
and operating cash flows useful for industry comparison.
Research limitations/implications – Following previous studies, this paper
surveyed only the annual reports of listed firms, which is a regular medium of
companies’ disclosures. This paper however excludes voluntary disclosure
contents in other such media as the company’s website, magazine, and sustainability
reports etc.
Originality/value – Distinguished from similar empirical works, the descriptive
analysis on the extent of disclosures has in detail been directed to items within
disclosure constructs. This account of analysis helps the inference of patterns/
reasons/motives/attitudes that underlie voluntary disclosures.
