The nature of the interaction between mandatory and voluntary disclosures

Abstract

This paper demonstrates the crucial role that firms' mandatory disclosures play in determining their voluntary disclosure strategies. It also shows how a firm's propensity for providing voluntary disclosures relates to various features of the mandatory disclosure environment and disclosure regulation. The special case of choosing between aggregated and disaggregated disclosures serves as an illustration of the model's applicability. Copyright ©, University of Chicago on behalf of the Institute of Professional Accounting, 2005.