The quality of voluntary and mandatory disclosures in company reports: a systematic literature network analysis

ABSTRACT

Adopting Systematic Literature Network Analysis (SLNA), this paper reviews the existing literature on the quality of company reports, defined as both voluntary and mandatory disclosures in financial and non-financial reports. The paper provides a chronological view of the extant literature by combining a Systematic Literature Review (SLR) with a Bibliographic Network Analysis (BNA). The SLR included a final sample of 883 papers from 1975 to 2020, while the BNA detected the evolution of knowledge and consequently, four main themes have emerged: the voluntary disclosure behaviour of firms; company voluntary disclosure and firm performance; earnings management; and the disclosure of CSR activities. Based on this analysis, the paper proposes three research streams that require further investigation: (i) CSR disclosure, capital markets, and digitalisation; (ii) IFRS adoption, contextual factors, and governance mechanisms; and (iii) managerial ownership and text mining.

KEYWORDS:

• Quality
• company reports
• mandatory and voluntary disclosure
• financial and non-financial reporting
• systematic literature network analysis

Acknowledgements

We would like to thank the Editor for managing our review and the anonymous reviewers for their insightful criticisms, encouragement, and useful suggestions that have greatly improved this article.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Company reports include financial reports or separate non-financial reports (which are often called by various names, such as sustainability report, CSR report, or ESG report; Michelon et al., 2020).

2 From 2024, large companies in the EU will need to publicly disclose information on the way they operate and manage social and environmental risks, following the CSRD.

3 Also called CSR reporting, social and environmental reporting, sustainability reporting, and non-financial reporting.

4 For instance, “Theory” has been normalised into “theory”; IFRS into “ifrs”; financial statements into “statement”; and stock options into “option”.

5 The main path network represents the evolution of knowledge from the oldest reference to the newest one in terms of the most significant connected components.