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Article
Role of Voluntary Disclosure and Transparency in Financial Reporting
The Accounting World (2007)
  • Pankaj M Madhani
Abstract

This article discusses the role of voluntary disclosure and transparency in Financial Reporting. It identifies various characteristics and discusses transparency and benefits of voluntary disclosure. To enhance competitiveness, firms view disclosure as an opportunity rather than a burden. The higher the level of disclosure the lower is the information risk premium. Low risk premium provides higher valuation. Firms gain from building reputation for transparent reporting, as it eventually results in highermanagement credibility, a higher Price/Earning (P/E) multiple, increased liquidity and a lower cost of capital. This article also highlights risks and costs ssociated with voluntary disclosure.

Keywords
  • Voluntary Disclosure,
  • Transparency
Publication Date
June 1, 2007
Citation Information
Pankaj M Madhani. "Role of Voluntary Disclosure and Transparency in Financial Reporting" The Accounting World (2007)
Available at: http://works.bepress.com/madhani/32/