Following the Basel Committee’s advocacy of value-at-risk (VaR) disclosure in external reports of financial institutions, the U.S. Securities and Exchange Commission issued Financial Reporting Release No. 48 to permit VaR disclosure as one of the most important disclosure approaches for market-risk quantitative information in 1997. This study is the first to empirically examine both economic determinants and consequences of VaR disclosure informativeness in the banking industry. First, this study finds that more informative VaR disclosure is associated with more effective corporate governance characteristics, including better shareholder protection, a larger and more independent board, the presence of a separate risk committee under the board of directors, a more independent risk committee, higher institutional ownership and a better overall governance environment. These results suggest that corporate governance mechanisms are important determinants of the informativeness of VaR disclosure. Second, the evidence shows that the cost of equity capital is negatively associated with the informativeness of VaR disclosure, consistent with informative VaR disclosure effectively communicating private information to investors about a bank’s market risk exposure and its risk management system. Additional evidence during the recent crisis further suggests the importance of VaR disclosure informativeness to the capital market as a strong signal reflecting the efficacy of risk management practices and the quality of risk governance mechanisms. However, I still find that a large proportion of the sample banks choose not to disclose information with respect to some important disclosure items (e.g., quantitative stress-test results, and non-trading portfolio VaR). It is necessary for government regulators to re-consider the current regulation on VaR disclosure in the external reports of the banking industry.

One of the main factors that spurred the 2008 financial crisis was the trading of securitized products without a clear understanding of the risks that those products bore. I argue that an appropriate regime of mandatory disclosure is the primary instrument regulators should refer to in order to correct the informational asymmetries that are present in the market for securities products. Subsequently, I take into consideration the CSA proposed legislation for the mandatory disclosure of securitized products and analyze its main components under the light of the principles of investor protection and market efficiency. I find that the new legislation should be welcome by market operators because it is a good balancing effort between the necessity to protect the investors and fostering the efficiency of the market.

One of the main factors that spurred the 2008 financial crisis was the trading of securitized products without a clear understanding of the risks that those products bore. I argue that an appropriate regime of mandatory disclosure is the primary instrument regulators should refer to in order to correct the informational asymmetries that are present in the market for securities products. Subsequently, I take into consideration the CSA proposed legislation for the mandatory disclosure of securitized products and analyze its main components under the light of the principles of investor protection and market efficiency. I find that the new legislation should be welcome by market operators because it is a good balancing effort between the necessity to protect the investors and fostering the efficiency of the market.

This dissertation presents two studies on the value relevance and perceived credibility of pro forma earnings. In the first study, I investigate the value relevance of pro forma earnings relative to two alternative earnings measures GAAP earnings and analysts actual earnings. Value relevance is assessed using two approaches. The first approach examines whether the markets expectations (contemporaneous returns or price) is best reflected in future pro forma earnings, future GAAP earnings, or future analysts actual earnings. The second approach is to determine through pair-wise comparisons of the three earnings measures (e.g., pro forma earnings versus GAAP earnings), which has the greatest explanatory power (comparing adjusted R2s) in explaining price and returns. Across approaches and models, each of the three earnings measures tends to be value relevant. However, Pro forma is consistently the most value relevant, followed by analysts actuals, with GAAP earnings having the least value relevance. That is, pro forma earnings have the greatest information content. This finding is consistent with managers, in aggregate, using pro forma to inform rather than to manage expectations or to mislead. <p>In the second study, I examine the impact of credibility attributes board characteristics, auditor quality and overall information quality on the value relevance of pro forma earnings. It is hypothesized that the credibility attributes will have a statistically significant impact on investors reaction to pro forma earnings. Consistent with the predictions, I find that stronger board characteristics, higher auditor quality and higher overall information quality are positively associated with higher market reaction to the pro forma announcement. That is, credibility attributes increase the value relevance of pro forma earnings. This finding is consistent with some firms providing pro forma earnings that are perceived to be credible and others providing pro formas that are perceived as less credible and possibly provided to manage expectations or to mislead.

This dissertation investigates the relation between firm disclosure, analyst forecast bias, and the cost of equity capital (COEC). Since analyst forecast bias is associated with both implied COEC estimates and disclosure, it is important to control for or remove it from COEC estimates when estimating the relation between disclosure and ex ante expected returns. I begin my analysis by predicting and removing systematic ex ante bias from analyst forecasts to produce de-biased analyst forecasts that better proxy for the market’s ex ante earnings expectations. I use these de-biased analyst forecasts to produce estimates of ex ante expected returns, both at the portfolio- and the firm-level. In addition, I develop a novel estimate of ex ante expected returns by applying Vuolteenaho’s (2002) return decomposition framework to ex post realized returns and accounting data. Finally, using several techniques to control for analyst forecast bias and self-selection bias, I find theoretically consistent evidence of a negative association between regular disclosure and ex ante expected returns. I predict and show that inferences can change when analyst forecast bias is controlled for.

Following the Basel Committee’s advocacy of value-at-risk (VaR) disclosure in external reports of financial institutions, the U.S. Securities and Exchange Commission issued Financial Reporting Release No. 48 to permit VaR disclosure as one of the most important disclosure approaches for market-risk quantitative information in 1997. This study is the first to empirically examine both economic determinants and consequences of VaR disclosure informativeness in the banking industry. First, this study finds that more informative VaR disclosure is associated with more effective corporate governance characteristics, including better shareholder protection, a larger and more independent board, the presence of a separate risk committee under the board of directors, a more independent risk committee, higher institutional ownership and a better overall governance environment. These results suggest that corporate governance mechanisms are important determinants of the informativeness of VaR disclosure. Second, the evidence shows that the cost of equity capital is negatively associated with the informativeness of VaR disclosure, consistent with informative VaR disclosure effectively communicating private information to investors about a bank’s market risk exposure and its risk management system. Additional evidence during the recent crisis further suggests the importance of VaR disclosure informativeness to the capital market as a strong signal reflecting the efficacy of risk management practices and the quality of risk governance mechanisms. However, I still find that a large proportion of the sample banks choose not to disclose information with respect to some important disclosure items (e.g., quantitative stress-test results, and non-trading portfolio VaR). It is necessary for government regulators to re-consider the current regulation on VaR disclosure in the external reports of the banking industry.

This study examines how the Securities and Exchange Commission balances competing regulatory objectives in its decisions to approve requests to withhold proprietary information from firms' financial reports. The confidential treatment process requires the SEC to balance the public interest in protecting proprietary information with the public interest in promoting disclosures to investors. I draw upon the economic and political science literatures on regulatory decision-making to test the strength of these interests on three aspects of the SEC's decisions to grant confidential treatment: the duration of time required to approve the request, the duration of time the SEC agrees to protect proprietary information from disclosure, and whether the firm is successful in securing confidential treatment for all redacted information. I find that the public interest in promoting disclosure and protecting proprietary information influence different aspects of the SEC's decisions to grant regulatory exemptions for confidential treatment. Firms requiring greater monitoring by the SEC receive greater scrutiny and have lower odds of successful redaction. High proprietary costs are associated with significantly longer protection periods but proprietary costs generally are not associated with duration to approval or the success of the application. Finally, I find that the SEC applies greater scrutiny to firms exhibiting objective and salient measures of low financial reporting quality although these firms have higher odds of success. These findings are consistent with the SEC reviewing CTRs to reduce the risk of legislative oversight. This study contributes to the literature on disclosure regulation by providing evidence as to how securities regulators balance competing interests when reviewing requests for disclosure exemptions. These findings also contribute to the role of political influence on disclosure policy, as the SEC's exemption decisions are consistent with avoiding the threat of legislative oversight. Second, these findings contribute to the literature on the SEC's regulatory decisions by demonstrating that the SEC staff appears to allocate resources and apply scrutiny to applications for disclosure exemptions using aspects of registered firms' financial reporting quality. Third, these findings contribute to the literature on redaction as a disclosure choice by providing evidence suggesting that firms with low financial reporting quality are more likely to redact, and I provide evidence on the success of this disclosure choice. Overall, these findings suggest that the public interest in promoting disclosure, as well as the threat of legislative oversight, influence the SECs decisions when granting regulatory exemptions to protect proprietary information.

Prior literature finds that firms incur a lower cost of debt capital when they voluntarily disclose information. However, the economic literature demonstrates that creditors' lending standards become more stringent (lax) when credit is rationed (abundant) suggesting that they value voluntary disclosure from borrowers differentially across credit market regimes. I draw upon the economic and finance literature on credit rationing to test whether the effects of voluntary disclosure on firms' cost of debt capital is greater during periods of credit rationing. I provide some evidence that confirms this prediction. Moreover, I provide some evidence that this relation is stronger for smaller firms than larger firms during periods of credit rationing suggesting that creditors value voluntary disclosure more from firms that have fewer resources to cover the increased agency cost of lending during periods of credit rationing.

Industrialiseringen de senaste århundrandena har medfört att välståndet i många länder har ökat oerhört. Dock har utvecklingen också medfört att ekosystem, mark, luft och vatten har tagit skada. Företag som blir tillräckligt stora och mäktiga kan även skada sin sociala omgivning genom att ignorera frågor som gäller till exempel anställningsförhållanden, mänskliga rättigheter, samhällsansvar och produktansvar. Krav har därför kommit från omgivningen att företagen bör arbeta för att minimera sin skadliga inverkan på miljön och samhället. I och med detta har CSR-redovisning kommit att bli aktuellt. Syftet med denna studie är att förklara hur VD-relaterade faktorer påverkar företags CSR-redovisning. En deduktiv ansats och en kvantitativ metod har valts. Med hjälp av befintlig teori har tolv hypoteser tagits fram för att testas empiriskt. Hypoteserna berör hur VD-variablerna ålder, besittningstid, branscherfarenhet, ägande, bonus och kön påverkar CSR-redovisningen i ett företag. Studien slår fast att det finns ett negativt samband mellan VD-ägande och CSR-redovisning men att det inte finns något stöd för att VD-besittningstid, VD-branscherfarenhet, VD-ålder, VD-bonus eller VD-kön påverkar CSR-redovisningen. Faktumet att VD-ägande och CSR-redovisning var negativt korrelerade var inte i linje med de teorier som användes i studien vilka föreslog att sambandet skulle vara positivt. Studien har således uppdagat att befintliga teorier behöver utvecklas ytterligare för att förklara hur VD-ägande påverkar CSR-redovisning. / The industrialization of the society the last centuries has led to a great increase of wealth in many countries. However, the progress has also brought damage upon ecosystems, land, air and water. Organizations that become big and powerful enough can also damage their social environment by ignoring issues concerning labor practices, human rights, society and product responsibility. Demands have risen for the companies to minimize their bad influence on the environment and the society. Because of this, CSR-disclosure has become a hot topic. The purpose of this study is to explain how the CEO affects CSR-disclosure. A deductive approach and a quantitative method has been used. Twelve hypothesis were developed from existing theory and then tested empirically. The hypothesis consider how the CEO-variables age, tenure, experience of the industry, ownership, bonus and gender affects CSR-disclosure. The study concludes that CEO-ownership is negatively correlated with CSR-disclosure and that CEO-tenure, CEO´s experience of the industry, age of CEO, CEO-bonus and CEO-gender does not affect CSR-disclosure. Even though theory proposed that CEO-ownership would be positively correlated with CSR-disclosure, the study finds that the correlation is negative. The study has discovered that the existing theories have to be further developed in order to explain how the CEO affects CSR-disclosure.

Environmental accounting, as a newly developed cross-field subject, has been received increasing attentions in recent years. With public awareness of corporate social responsibility and sustainability, corporate environmental performance also has been aroused among social public, stakeholders, and internal management. Environmental disclosure, as an effective link between corporate management and social responsibility, is becoming a valuable research topic.   One unsolved problem of the environmental disclosure is the corporate behavior of listed companies in terms of environmental reporting in the post environmental events period, from 2005 to 2009. Those corporation environmental events, exposed by media, include over pollution, over emissions and illegal environmental activities. According to legitimacy theory, negative social perception and “legitimacy gaps” of the community result from illegitimate corporate activities, like environmental events, and corporations are therefore been threatened in its existence. In this case, enhanced environmental disclosure in annual reports is supposed to be an appropriate way to eliminate threats for corporations and ameliorate negative social perceptions. It imply that corporations with lower level of environmental performance are required to have more environmental disclosure for sustainability.   Some prior studies provided evidences that in the period from 1980 to 2002, after some incidents, corporations involved in these incidents indicate a higher level of environmental disclosure in the year when the environmental incidents happened, which align with legitimacy theory. Furthermore, there were incongruence previous results of the relationships between environmental disclosure and firm size and industry characters. We aim to find that whether the corporation environmental disclosure is in a relation with firm size and industry characters or not. And we are to revisit the association between corporate environmental performance and environmental disclosure.   This study took the quantitative method statistical technology was used for analysis. In order to get the answer for the research question, four hypotheses were set in this research. Finally, firm size and industry characters have no significant relationship with the level of environmental disclosure. The results indicate that the level of environmental information disclosure in annual reports of 2008 is higher than those of 2005. However, environmental events could not be deemed as a determinant of environmental disclosure, and the results partially support the legitimacy theory. The quality of environmental disclosure of 21 sample companies did not improve significantly in the year when the environmental events happened, but only the environmental disclosure sample companies with environmental events which happened in the year of 2008 improved significantly, compared with the previous year.