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

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.

[1]  Ronald A. Dye,et al.  Strategic Accounting Choice And The Effects Of Alternative Financial-Reporting Requirements , 1985 .

[2]  R. Dye.  DISCLOSURE OF NONPROPRIETARY INFORMATION , 1985 .

[3]  Stephen M. Johnson,et al.  Response format of the Job Descriptive Index: Assessment of reliability and validity by the multitrait–multimethod matrix. , 1982 .

[4]  L. DeAngelo,et al.  Auditor size and audit quality , 1981 .

[5]  Tsoung-Chao Lee,et al.  The Theory and Practice of Econometrics , 1981 .

[6]  Jacob Cohen,et al.  Applied multiple regression/correlation analysis for the behavioral sciences , 1979 .

[7]  S. Myers.  Determinants of corporate borrowing , 1977 .

[8]  MEMBERSHIP DIRECTORY,et al.  Membership directory , 1975, Newsletter, European Labor and Working Class History.

[9]  Stephen L. Buzby.  COMPANY SIZE, LISTED VERSUS UNLISTED STOCKS, AND EXTENT OF FINANCIAL DISCLOSURE , 1975 .

[10]  Frederick D. S. Choi.  Financial Disclosure and Entry to the European Capital Market , 1973 .

[11]  Jacob Jacoby,et al.  Is there an optimal number of alternatives for Likert-scale items? Effects of testing time and scale properties. , 1972 .

[12]  J. Jacoby,et al.  Is There an Optimal Number of Alternatives for Likert Scale Items? Study I: Reliability and Validity , 1971 .

[13]  Ronald M. Copeland,et al.  Extent Of Disclosure , 1968 .

[14]  L. Leemis.  Applied Linear Regression Models , 1991 .

[15]  インターグループ.  SAS user's guide : basics , 1986 .

[16]  F. Plewa.  An Empirical Investigation of the Extent of Disclosure in Municipal Annual Reports. , 1983 .

[17]  Jerold L. Zimmerman,et al.  Voluntary Corporate Disclosure: The Case of Interim Reporting , 1981 .

[18]  K. Schipper.  Discussion of Voluntary Corporate Disclosure: The Case of Interim Reporting , 1981 .

[19]  J. Daly,et al.  National economic planning : right or wrong for the U.S.? : an AEI Round Table held on April 1, 1976, and sponsored by the American Enterprise Institute for Public Policy Research , 1976 .

[20]  J. R. Morton.  The communication effectiveness of footnotes in published corporate financial statements , 1975 .

[21]  H. Manne.  Economic Policy and the Regulation of Corporate Securities , 1969 .

[22]  R. T. Sprouse.  Discussion of The Return to Straight-Line Depreciation: An Analysis of a Change in Accounting Method , 1967 .

[23]  R. Cyert,et al.  Theory of the Firm , 1966 .

[24]  Alan R. Cerf,et al.  Corporate reporting and investment decisions , 1961 .