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An Empirical Investigation of the Extent of Corporate Financial Disclosure in the Oil and Gas Industry

An Empirical Investigation of the Extent of Corporate Financial Disclosure in the Oil and Gas... The principal research question addressed by the study was: Are there identifiable and measurable factors that are associated with the extent to which firms in the oil and gas industry disclose financial information?Extent of financial disclosure was measured by using a weighted index of disclosure items. The 10-K and annual reports of 125 oil and gas firms were examined in order to identify various financial disclosures provided by each firm. This set of disclosures was weighted by oil and gas financial analysts according to the importance of each disclosure in an investment decision. The items of information provided by an individual firm were then applied to the index. The dependent variable, extent of financial disclosure, was the ratio of a firm's total disclosure score to the firm's total possible disclosure.A stepwise regression model was used to determine which variables were “best” in explaining extent of financial disclosure. Of the ten independent variables entered, four were retained in the final model at the .20 level of significance: exchange listing status, audit firm size, ratio of debt to total equity, and number of shareholders. The final model was examined for the significance of parameter estimates. Three variables—listing status, ratio of debt to total equity, and number of shareholders—were determined to be statistically significant. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Accounting, Auditing & Finance SAGE

An Empirical Investigation of the Extent of Corporate Financial Disclosure in the Oil and Gas Industry

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References (29)

Publisher
SAGE
Copyright
© 1993 SAGE Publications
ISSN
0148-558X
eISSN
2160-4061
DOI
10.1177/0148558X9300800306
Publisher site
See Article on Publisher Site

Abstract

The principal research question addressed by the study was: Are there identifiable and measurable factors that are associated with the extent to which firms in the oil and gas industry disclose financial information?Extent of financial disclosure was measured by using a weighted index of disclosure items. The 10-K and annual reports of 125 oil and gas firms were examined in order to identify various financial disclosures provided by each firm. This set of disclosures was weighted by oil and gas financial analysts according to the importance of each disclosure in an investment decision. The items of information provided by an individual firm were then applied to the index. The dependent variable, extent of financial disclosure, was the ratio of a firm's total disclosure score to the firm's total possible disclosure.A stepwise regression model was used to determine which variables were “best” in explaining extent of financial disclosure. Of the ten independent variables entered, four were retained in the final model at the .20 level of significance: exchange listing status, audit firm size, ratio of debt to total equity, and number of shareholders. The final model was examined for the significance of parameter estimates. Three variables—listing status, ratio of debt to total equity, and number of shareholders—were determined to be statistically significant.

Journal

Journal of Accounting, Auditing & FinanceSAGE

Published: Jul 1, 1993

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