A Study of Corporate Disclosure Practice and Effectiveness in Hong Kong

The recent economic turmoil in Asia has led to a wider recognition of the importance of corporate transparency and disclosures in financial dealings. The objective of this study is to provide comprehensive and up‐to‐date evidence of current practice and perceived effectiveness of corporate disclosur...

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Bibliographic Details
Published in:Journal of international financial management & accounting 2001, Vol.12 (1), p.75-102
Main Authors: Ho, Simon S. M., Wong, Kar Shun
Format: Article
Language:English
Subjects:
Accounting
Accounting policies
Capital market
Chief financial officers
Disclosure
Effectiveness
Emerging markets
Financial analysis
Financial crisis
Financial management
Financial reporting
Hong Kong
Perceptions
Studies
Transparency
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Summary:The recent economic turmoil in Asia has led to a wider recognition of the importance of corporate transparency and disclosures in financial dealings. The objective of this study is to provide comprehensive and up‐to‐date evidence of current practice and perceived effectiveness of corporate disclosure of listed companies in an emerging economy—Hong Kong. The study compares the perceptions of chief financial officers (CFOs) and financial analysts about a variety of information flow, disclosure and capital market efficiency issues. It also seeks to determine whether there is a perceived need for increased financial reporting regulations and to what extent this and other alternative means might improve market functioning. While both subject groups believed that a majority of firms only adopt a conservative one‐way disclosure strategy and the existence of a communication gap, analysts perceived a much higher need than CFOs for increased financial reporting regulations. Neither group thought that enhancing disclosure requirements alone would suffice to close this gap. Instead, they suggested an improvement in the quality of the communication and disclosure processes through means such as choosing more appropriate communication media, formulating a more proactive disclosure strategy, enhancing investor relationship, and voluntarily reporting more information desired by users.
ISSN:0954-1314
1467-646X
DOI:10.1111/1467-646X.00067