Policy Implications from the Theory-Based Literature on Disclosure

Robert E. Verrecchia

in The Economics and Politics of Accounting

Published in print March 2004 | ISBN: 9780199260621
Published online January 2005 | e-ISBN: 9780191601668 | DOI:
 Policy Implications from the Theory-Based Literature on Disclosure

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The theory-based disclosure literature is reviewed to infer policy prescriptions that seem implicit in the results. The author points out that the theory-based literature fails to distinguish adequately between analyses concerned primarily with narrow pathologies, and results that are sufficiently general to extend naturally to broad policy issues. He attempts to make this distinction and discusses broad notions and ideas that originate from the theory-based literature in accounting that comport with casual empiricism. The six sections of the chapter are: Introduction; Public disclosure and private information gathering; Unintended consequences of public disclosure; Other externalities of disclosure; Disclosure standards aside, what thwarts firms from disclosing voluntarily?; and Conclusion.

Keywords: accounting; disclosure; externalities; literature review; policy implications; private information gathering; public disclosure; voluntary disclosure

Chapter.  5750 words. 

Subjects: Financial Markets

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