UBC Theses and Dissertations

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UBC Theses and Dissertations

A consideration of corporate disclosure from the global viewpoint Teoh, Hai Yap


Interest in the question of adequate corporate disclosure has never been greater than in recent years. Among the factors contributing to this increase in interest are the postwar trend of corporations to develop into the more complex conglomerates, the growing participation of institutional investors and the rising role of the financial analysts. The institutional investors, financial analysts, other shareholder groups, employees, credit grantors, professional organisations, Securities and Exchange Commissions, as well as others, are interested in disclosure on a more disaggregative basis by corporations to meet their diverse and sometimes overlapping needs for information. The rationale of adequate corporate disclosure is examined from the viewpoints of these different parties at interest. A related consideration is the accounting problem of materiality. It is suggested that an explicit guideline would provide a common approach in the interpretation and application of the materiality concept, thereby ensuring that a more consistent disclosure practice is followed. Unlike the interested external parties, who are only concerned with the informational aspect of corporate disclosure, management, however, must also consider its motivational, competitive, legal and cost implications. As would be expected, the general reaction of corporate management is one of opposition to more extensive disclosure. In the light of the foregoing considerations, a structure of factors relevant to estimate the present net worth of the estimated future benefits of and future costs of full corporate disclosure is presented, using as a model the technique of the value concept.

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