Keywords
disclosure of information
financial reporting
financial result
earnings management
How to Cite
Abstract
The purpose of this paper is to verify whether companies listed on the Warsaw Stock Exchange disclose less information about reserves in their financial statements in case of a reduction in reserves than in case of an increase in reserves. It has been hypothesized that in the case of a reduction in reserves balance, disclosures are less detailed than in the case of an increase in them. This hypothesis was verified through an analysis of information reported in the financial statements of 148 companies listed on the Warsaw Stock Exchange for the years 2007–2014: in total, the analyzed data comes from 1184 financial statements. Within the research, a three-step index of disclosures detail of the two leading reserve categories is constructed and followed with a comparison of the values of disclosure indexes and the fact that reserves were reduced and increased. The research methodology included literature studies and empirical studies using the author’s index of disclosure detail and statistical testing. The conducted research extends the cognitive legacy of mainstream research into the quality of financial statements disclosures and in the principal-agent problem.
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