Economic consequences of key performance indicators’ disclosure quality
| Autor: | Hany Elzahar, Khaled Hussainey, Ioannis Tsalavoutas, Francesco Mazzi |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2015 |
| Předmět: |
Economics and Econometrics
Actuarial science Impact factor business.industry media_common.quotation_subject Best practice Enterprise value Accounting Sample (statistics) Implicit cost value relevance Cost of capital Quality (business) Business Performance indicator UK KPI disclosure quality cost of capital Finance Economic consequences media_common |
| Zdroj: | Elzahar, H, Hussainey, K, Mazzi, F & Tsalavoutas, I 2015, ' Economic consequences of key performance indicators' disclosure quality ', International Review of Financial Analysis, vol. 39, pp. 96-112 . https://doi.org/10.1016/j.irfa.2015.03.005 |
| ISSN: | 1057-5219 |
| DOI: | 10.1016/j.irfa.2015.03.005 |
| Popis: | Starting from 2006, UK listed companies are required to analyse their performance by using Key Performance Indicators (KPIs) in specific sections of their annual reports and the UK Accounting Standard Board (ASB) provides companies with guidelines for the best practice regarding KPI disclosure. Motivated by the possible effects of the KPI disclosure quality, we examine their potential economic consequences for a sample of UK listed firms for the period 2006 to 2010. Our sample consists of 448 firm-year observations. We first develop a measure for the quality of the KPI disclosure based on the ASB’s guidelines. We then test the economic consequences of financial and nonfinancial KPIs disclosure quality both separately and combined into one variable. Our findings, after conducting various sensitivity tests, suggest that only the disclosure quality of financial KPIs matters. We find a significantly negative (weakly positive) relationship between disclosure quality of financial KPIs and the implied cost of capital (firm value). These results inform regulatory bodies as well as the academic literature about the potential economic consequences of this type of disclosure. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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