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Abstract
We test the relation between nancial and social disclosure and the cost of equity capital for a sample of
Canadian rms with year-ends in 1990, 1991 and 1992. We nd that, consistent with prior research, the quantity
and quality of nancial disclosure is negatively related to the cost of equity capital for rms with low analyst
following. Contrary to expectations, there is a signicant positive relation between social disclosures and the cost
of equity capital. This positive relationship is mitigated among rms with better nancial performance. We consider
some biases in social disclosures that may explain this result. We also note that social disclosures may benet the
rm through its eect on organizational stakeholders other than equity investors. # 2001 Published by Elsevier
Science Ltd.
* Corresponding author.
In spite of the regulatory and theoretical support for increased disclosure by rms, direct evidence of a negative empirical relation between
disclosure levels and the cost of capital is limited
(e.g. Botosan, 1997; Botosan & Plumlee, 2000, on
the cost of equity capital, and Sengupta, 1998 on
the cost of debt). In part, the lack of strong
empirical ndings on the relationship between
disclosure and cost of capital may be an artifact of
the markets and information set that are used in
empirical tests. If there is little variation in the
information disclosed due to eective regulatory
interventions, or if analysts routinely generate
information independently of the rms own disclosures, then the power of empirical tests will be
signicantly reduced. For example, Botosan
(1997) documents a statistically signicant negative relation between the level of nancial disclosure and cost of equity capital for her sample of
USA manufacturing rms, but this relation holds
598
1. Hypothesis development
1
The view that US disclosure practices provide more information than Canadian practices is apparently widely held.
Nearly 90% of the Canadian analysts surveyed between
November 1994 and January 1995 on behalf of the Toronto
Stock Exchanges Committee on Corporate Disclosure responded that disclosure was better in the USA. None of the analysts
felt that disclosure was better in Canada. Reasons provided for
the belief that disclosure is better in the USA included: more
stringent regulation, greater volume of information and more
detailed segmentation of information (Committee on Corporate Disclosure, 1995).
599
600
4
The AIMR rankings are compiled annually by the Association for Investment Management and Research. These disclosure rankings have been used in empirical studies by
Botosan and Plumlee (2000), Healy, Hutton, and Palepu
(1999), Lang and Lundholm (1993, 1996), and Welker (1995).
rankings available to us are based on the judgments of less experienced raters and do not reect
the same level of averaging across raters as the
AIMR ratings. Nevertheless, the SMAC/UQAM
ratings are the best available source of disclosure
ratings for a broad cross-section of Canadian
rms. The only alternative measure of disclosure
for Canadian companies would be researchergenerated measures, as utilized by Botosan (1997).
We choose not to generate our own disclosure
ratings because of the potential for researcher
biases to inuence the ratings and to avoid the
severe limitations on sample size imposed by this
approach.
For each year from 1990 to 1992, researchers at
UQAM analyzed the annual reports of around
700 Canadian companies coming from nine
industry sectors. The industry sectors reported on
in their publication include: ManufacturingIndustrial Products, Manufacturing-Consumer
Products; Oil, Gas and Chemicals; Mines, Metals
and Forestry Products; Technology and Communications; Financial Institutions; Retail and
Wholesale Trade; Management and Other; and
Utilities. An extensive checklist of information
related to socially responsible activities was
developed that contained 170 subcategories of
information. Similarly, an extensive checklist
related to nancial information was developed
which allocated points across 261 individual
disclosure elements.
Appendix A contains a summary of the 10
categories of social information considered and
the maximum number of points allocated to each
category, as well as the sub-categories of information considered within each category. The
Appendix also contains similar information for
the nancial disclosure checklist.
Two points should be noted about these checklists. First, the social information captured in the
checklist includes a much broader set of disclosures than just environmental disclosures that
have been the subject of much of the past social
disclosure literature.
Second, the checklist used to assess nancial disclosure is similar in many respects to the checklists
utilized by the AIMR and developed by Botosan
(1997). For example, all of the checklists contain
601
sections devoted to general background information that help users to interpret the nancial
statements. All three lists contain sections devoted
to assessing the usefulness of the disclosure of
summarized historical results, and all three checklists assess the inclusion of forecasted information
within the annual report. In addition to assessing the
types of disclosure made in the annual report, the
UQAM researchers also attempted to make an
assessment of the quality of the disclosure by
awarding more points for disclosures that contained
quantitative data or reported more information.
The extensive nature of the checklists utilized in the
SMAC/UQAM disclosure ratings, combined with
the attempt to discriminate between more and less
informative disclosures, gives us condence in the
face validity of these ratings. While they are
undoubtedly noisy measures, they provide us
with some ability to discriminate between rms
providing high levels of disclosure and those
providing minimal disclosure. Empirical analysis
reported later in the manuscript also provides evidence corroborating the validity of our disclosure
measures.
602
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5
A clean surplus accounting system is one in which book
value at time t is equal to book value at time t1 plus earnings
minus dividends net of capital contributions. Dirty surplus
arises when gains and losses aecting book value bypass the
income statement.
IROEit ri
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6
About 10% of our rm year observations have two-year
ahead EPS forecasts but do not have a 3-year ahead forecast.
When the third year ahead forecast is missing, we forecast scal
year 3 (FY3) EPS by assuming that the earnings growth rate
implicit in the scal year 2 (FY2) compared with scal year 1
(FY1) forecasts applies to scal year 3 as well. Specically, we
forecast FY3 EPS as FY2 EPS(FY2 EPS/FY1 EPS). If FY2
EPS/FY1 EPS< 0, we do not forecast FY3 EPS and omit the
observation.
4. Empirical analysis
4.1. Disclosure proxy and additional data
Our initial sample consists of all rms that
received a disclosure rating based on any or all of
its 1990, 1991 or 1992 annual reports. In each of
these three years, the annual reports of over 700
Canadian companies were collected and analyzed
by a group of research assistants at UQAM. The
results of the ratings are summarized by industry
group and published each year by CMA Canada.
The survey only provides 3 years of data. Since
disclosure policies are probably relatively stable
rm attributes, this limited time-series should not
severely impact the generality of our results. In
order to perform the initial empirical analysis, we
require nancial statement data provided by
Compustat, earnings forecasts and analyst following provided by I/B/E/S, and market price and
returns data acquired through Datastream. These
additional data requirements leave us with a
sample of 324 rm year observations from 124
dierent companies with all necessary price data,
nancial and social disclosure scores, all necessary
Compustat data and at least 1-year ahead EPS
forecast available from I/B/E/S. For this initial
sample, we only require that 1-year ahead analysts forecasts be available, and therefore the
number of analysts making a 1-year ahead forecast, be available from I/B/E/S. In order to
calculate cost of capital estimates, we require
that at least 2-year-ahead earnings forecasts be
obtained from I/B/E/S. We also require that
unambiguous identication with a StatsCan
industry group be possible, further reducing our
603
7
Our results are qualitatively similar using average stock
prices from the 4th month after scal year-end. We use the
average stock price for the month rather than monthly closing
prices to avoid extreme observations that may result from
temporary share price uctuations reected in a single price
observation such as a closing price.
604
Table 1
Descriptive statisticsa
Variable name N
FDISC
SDISC
MV ($000,000)
ANALFOL
LEV (%)
ROE (%)
IND
COST (%)
Mean
324
32.53
31.48
4.75
324
11.04
8.25
0.25
324 3833
1605
20.2
324
9.32
9.0
1
324
75.8
53.5
0
324
0.19
5.98 194.0
324
0.38
0
0
225
8.9
8.5
1.8
63.0
50.0
38,729
37
1095
33.1
1
22.5
Tables 1 and 2 provides distributional characteristics and a correlation matrix for the variables used in the study. Financial disclosure scores
average 32.5 (out of a possible 120), and range
between 4.75 and 63. Social disclosure scores tend
to be lower, averaging 11 (out of 100) and ranging
between 0.25 and 50. The average rm size in the
sample is $3.8 billion and the median size is substantially lower at around $1.6 billion. Nine analysts follow the average rm, and this ranges
between 1 and 37. The average debt to equity ratio
is 75%. The mean ROE for our sample rms is
close to zero, reecting the poor economic climate
in Canada in the early 1990s.8 The median ROE is
around 6%. Around one third of our sample rms
come from the oil, gas and chemical industry or
the mines, metals and forestry products industry,
industries that have been depicted as environmentally/socially sensitive industries in the past litera-
Table 2
Correlation matrix (Pearson above diagonal, Spearman below)a
FDISC
SDISC
MV
NANAL
LEV
ROE
IND
COST
FDISC
SDISC
MV
NANAL
LEV
ROE
IND
COST
1
0.704*
0.555*
0.603*
0.177*
0.067
0.281*
0.053
0.662*
1
0.474*
0.509*
0.243*
0.096
0.278*
0.012
0.499*
0.294*
1
0.617*
0.024
0.136*
0.065
0.066
0.542*
0.391*
0.413*
1
0.042
0.009
0.346*
0.156*
0.067
0.080
0.054
0.023
1
0.251*
0.013
0.131*
0.009
0.023
0.132*
0.029
0.542*
1
0.255*
0.102
0.229*
0.298*
0.143*
0.321*
0.011
0.121*
1
0.351*
0.046
0.011
0.091
0.208*
0.054
0.074
0.362*
1
a
Variable denitions: FDISC=Financial disclosure score for rm i, year t; SDISC=social disclosure score for rm i, year t;
MV=beginning of year market value of common equity for rm i, year t; NANAL=number of analysts making a 1 year ahead EPS
forecast for rm i, year t; LEV=debt to equity ratio for rm i, year t; ROE=return on equity for rm i, year t; IND=a dummy variable
equal to one if rm i is a member of the Oil, Gas and Chemicals or Mine, Metals and Forestry Products industry sectors in year t, zero
otherwise; COST= estimated cost of equity capital for rm i, year t.
*=signicant at the 5% level, two-tailed test.
605
606
Table 3
Descriptive information across sensitive and non-sensitive industries and time
Variable name
Mean
Median
Minimum
Maximum
Sensitive industry1990
FDISC
SDISC
MV ($000,000)
NANAL
ROE (%)
COST (%)
37
37
37
37
37
29
36.14
13.82
2478
13.49
1.58
8.43
34.75
11.25
1982
12
6.00
8.12
15.5
1.25
69.3
3
142.07
1.83
56
45.5
12,543
34
26.46
15.26
Sensitive industry1991
FDISC
SDISC
MV ($000,000)
NANAL
ROE (%)
COST (%)
42
42
42
42
42
31
37.15
15.31
2840
12.12
8.67
7.56
35.25
14.38
1994
10.5
1.95
7.47
16.75
2
85.3
2
158.9
3.52
58
40.5
11,821
36
17.54
14.15
Sensitive industry1992
FDISC
SDISC
MV ($000,000)
NANAL
ROE (%)
COST (%)
43
43
43
43
43
34
34.7
13.95
2511
10.37
0.81
6.72
34.35
13.5
2002
10.0
2.66
6.23
14.25
2
88.4
1
38.38
3.89
52.5
50
10,554
30
22.84
13.73
Non-sensitive industry1990
FDISC
SDISC
MV ($000,000)
NANAL
ROE (%)
COST (%)
63
63
63
63
63
40
31.9
10.2
4675
8.76
5.09
10.84
29
7
1364
8
9.98
10.53
11.25
0.75
20.2
1
97.06
6.55
63
38
32,179
37
23.68
20.34
Non-sensitive industry1991
FDISC
SDISC
MV ($000,000)
NANAL
ROE (%)
COST (%)
71
71
71
71
71
47
29.7
8.62
4447
7.82
4.32
10.06
46.75
7
1245
7
7.63
9.62
8.7
0.25
27.5
1
77.71
4.04
59.5
33.5
37,839
34
33.09
19.74
Non-sensitive industry1992
FDISC
SDISC
MV ($000,000)
NANAL
ROE (%)
COST (%)
68
68
68
68
68
44
29.81
8.35
4452
6.77
1.59
8.98
29.28
6.38
1393
6.0
6.42
9.1
4.75
1
66.1
1
194.0
3.11
63
43.25
38,729
26
31.15
22.48
Variable denitions: FDISC=nancial disclosure score for rm i, year t; SDISC=social disclosure score for rm i, year t; MV=beginning of year market value of common equity for rm i, year t; NANAL=number of analysts making a 1 year ahead EPS forecast
for rm i, year t; ROE=return on equity for rm i, year t; COST=estimated cost of equity capital for rm i, year t.
607
Coecient estimate
t-Statistic
P-value (two-tailed)
Intercept (?)
DSIZE (+)
ROE (+)
LEV (+)
DANAL (+)
34.113
6.895
0.032
0.014
8.505
26.323
5.481
1.277
2.535
6.776
0.0001
0.0001
0.2026
0.0117
0.0001
No. of observations=324; adjusted R2=32.7%. Variable denitions: FDISC=nancial disclosure score for rm i, year t; DSIZE=a
dummy variable equal to one if the beginning of year market value of equity for rm i, year t is above the sample median, zero
otherwise; ROE=return on equity for rm i, year t; LEV=debt to equity ratio, rm i, year t; DANAL=a dummy variable equal to 1
if the number of analysts providing a 1-year ahead earnings forecast for rm i, year t is above the sample median, zero otherwise.
9
Our tabulated results provide two-tailed P-values. By
convention, we describe an estimated coecient as statistically
signicant if the coecient is signicant at the 0.05 level in a
one-tailed test if we predict the sign of the coecient and a twotailed test if we do not predict the sign of the coecient.
608
Table 5
Results of estimating Eq. (6) explaining variation in social disclosure
SDISCit 1 DSIZEit 2 ROEit 3 INDit 4 INDit SIZEit 5 DANALit 6 LEVIT it 6
Variable (pred. sign)
Coecient estimate
t-Statistic
P-value (two-tailed)
Intercept (?)
DSIZE (+)
ROE (?)
IND (+)
INDSIZE (+)
DANAL (+)
LEV (+)
5.097
3.507
0.021
2.465
2.958
3.931
0.011
6.315
3.021
1.092
1.957
1.713
3.918
2.596
0.0001
0.0027
0.2757
0.0513
0.0876
0.0001
0.0099
No. of observations=324; adjusted R2=26.8%. Variable denitions: SDISC=social disclosure score for rm i, year t; DSIZE=a
dummy variable equal to one if the beginning of year market value of equity for rm i, year t is above the sample median, zero
otherwise; ROE=return on equity for rm i, year t; LEV=debt to equity ratio, rm i, year t; DANAL=a dummy variable equal to 1
if the number of analysts providing a 1-year ahead earnings forecast for rm i, year t is above the sample median, zero otherwise;
IND=a dummy variable equal to one if rm i is a member of the Oil, Gas and Chemicals or Mine, Metals and Forestry Products
industry sectors in year t, zero otherwise.
based on the work of Botosan (1997) and Gebhardt et al. (2000). Similar to Botosan, we attempt
to document a negative relation between nancial
and social disclosure and the cost of equity capital
that is incremental to the eects of other variables
known to inuence cost of capital. Gebhardt et al.
nd that the risk premia is negatively related to
the number of analysts following the rm and
positively related to leverage. Accordingly, our
empirical tests include these variables as control
variables.10 In addition, Botosan documents that
disclosure and analyst following has an interactive
eect on cost of capital. She nds that disclosure
reduces cost of capital only for those rms with
low analyst following. We also estimate an equation that allows for this potential interactive eect
and an interaction between analyst following and
social disclosure as well. Specically, our primary
empirical tests come from the estimation of the
following two equations:
COSTit
1 NANALit
3 FDISCit
2 LEVit
4 SDISC it
it
10
Other potential risk proxies such as market beta, market
value of equity and book to market ratios could also be controlled for in the empirical analysis. We omit beta from the
analysis because Gebhardt et al. document that they are statistically unrelated to our measure of the cost of equity capital
except in certain multivariate tests. We include size and book to
market ratios in all our equations explaining the cost of capital
and nd that these variables have the correct sign but are statistically unrelated to our industry adjusted cost of capital estimates. Gebhardt et al. also nd that the dispersion in analysts
earnings forecasts is signicantly related to the cost of capital.
We choose not to include this variable in our analysis for three
reasons. First, the dispersion in analysts forecasts would presumably be a function of the disclosure variables we include in
our analysis, so the inclusion of this variable would amount to
the inclusion of an alternative disclosure measure and could
hamper our ability to observe a relation between more direct
disclosure measures and the cost of capital. Second, including a
measure of analysts forecast dispersion would reduce our
sample size because a measure of dispersion requires that the
rm be followed by multiple analysts Third, the dispersion in
analysts forecasts is related to the number of analysts following the rm, which we include for consistency with Botosan.
COSTit 1 NANALit
3 FDISCit 4 SDISCit
5 LANALit FDISCit
LANAL
6
it SDISCit it
609
2 LEVit
610
Table 6
Results of estimating Eq. (5) explaining variation in nancial disclosureindustry adjusted data
FDISCit 1 SIZEit 2 ROEit 3 LEVit 4 NANALit " 5
Variable (pred. sign)
Coecient estimate
t-Statistic
P-value (two-tailed)
Intercept (?)
SIZE (+)
ROE (+)
LEV (+)
NANAL (+)
0.276
0.001
0.015
0.007
0.508
0.524
5.467
0.605
1.472
5.291
0.6005
0.0001
0.5458
0.1420
0.0001
No. of observations=324; adjusted R2=23.8%. Variable denitions: FDISC=nancial disclosure score for rm i, year tthe industry
sector median for year t; SIZE=beginning of year market value of equity for rm i, year tthe industry sector median for year t;
ROE=return on equity for rm i, year tthe industry sector median for year t; LEV=debt to equity ratio, rm i, year tthe industry
sector median for year t; NANAL=number of analysts providing a 1-year ahead earnings forecast for rm i, year tthe industry
sector median for year t.
Table 7
Results of estimating Eq. (6) explaining variation in social disclosureindustry adjusted data
SDISCit 1 SIZEit 2 ROEit 5 NANALit 6 LEVit it 6
Variable (pred. sign)
Coecient estimate
t-Statistic
P-value (two-tailed)
Intercept (?)
SIZE (+)
ROE (?)
NANAL (+)
LEV (+)
1.148
0.002
0.033
0.172
0.009
2.682
3.472
1.687
2.196
2.003
0.0077
0.0006
0.0936
0.0461
0.0288
No. of observations=324; adjusted R2=8.4%. Variable denitions: SDISC=social disclosure score for rm i, year tthe industry
sector median for year t; SIZE=beginning of year market value of equity for rm i, year tthe industry sector median for year t;
ROE=return on equity for rm i, year tthe industry sector median for year t; LEV=debt to equity ratio, rm i, year tthe industry
sector median for year t; NANAL=number of analysts providing a 1-year ahead earnings forecast for rm i, year tthe industry
sector median for year t.
Table 8
Results of estimating Eq. (7) explaining variation in cost of capital estimatesindustry adjusted data
COSTit
1 NANALit
2 LEVit
3 FDISCit
4 SDISCit
it 7
Coecient estimate
t-Statistic
P-value (two-tailed)
Intercept (?)
NANAL ()
LEV (+)
FDISC ()
SDISC ()
0.00394
0.00101
0.00002
0.00040
0.00064
2.244
3.459
1.584
1.961
2.354
0.0258
0.0007
0.1147
0.0512
0.0195
No. of observations=221; adjusted R2=9.9%. Variable denitions: COST=estimated cost of equity capital for rm i, year tthe
industry sector median for year t; NANAL=number of analysts providing a one-year ahead earnings forecast for rm i, year tthe
industry sector median for year t; LEV=debt to equity ratio, rm i, year tthe industry sector median for year t; FDISC=nancial
disclosure score for rm i, year tthe industry sector median for year t; SDISC=social disclosure score for rm i, year tthe industry
sector median for year t.
611
1 NANALit
FDISCit
2 LEVit
6 LANALit
3 FDISCit
4 SDISCit
SDISCit it 8
Coecient estimate
t-Statistic
P-value (two-tailed)
Intercept (?)
NANAL ()
LEV (+)
FDISC ()
SDISC ()
LANAL*FDISC ()
LANAL*SDISC (?)
0.00094
0.00095
0.00002
0.00004
0.00078
0.00098
0.00036
0.474
3.258
1.478
0.169
2.517
2.289
0.567
0.6362
0.0013
0.1408
0.8663
0.0126
0.0231
0.5715
No. of observations=221; adjusted R2=12.98%. Variable denitions: COST=estimated cost of equity capital for rm i, year tthe
industry sector median for year t; NANAL=number of analysts providing a 1-year ahead earnings forecast for rm i, year tthe
industry sector median for year t; LEV=debt to equity ratio, rm i, year tthe industry sector median for year t; FDISC=nancial
disclosure score for rm i, year tthe industry sector median for year t; SDISC=social disclosure score for rm i, year tthe industry
sector median for year t; LANAL=a dummy variable set equal to one if the number of analysts following rm i in year t is below is
industry sector median for year t, zero otherwise.
12
Recall that the sample sizes reected in Tables 8, 9, and 10
are 221, not the 324 reected in earlier tables. This reects the
additional data requirements to estimate the cost of capital
(analysts forecasts and industry ROE) and the deletion of
observations with cost of capital below the 1st percentile or
above the 99th percentile of the empirical distribution.
number of analysts following the rm has a statistically reliable eect on cost of capital, with
higher analyst coverage resulting in a lower cost of
capital. Financial leverage is positively associated
with the cost of equity capital, but this eect is not
signicant at conventional levels. Financial disclosure is negatively related to cost of capital,
consistent with our predictions. This result is
stronger than the full sample result in Botosan,
perhaps suggesting that nancial disclosure plays
a more important role for Canadian rms. Surprisingly, social disclosure exhibits a statistically
reliable positive association with the cost of equity
capital. For our sample rms and our time period,
enhanced social disclosure results in a higher cost
of capital.
Table 9 reports the results of estimating the
expanded Eq. (8). This specication includes
interaction terms intended to determine if analyst
following modies the relation between our disclosure variables and the cost of capital. Consistent with Botosans (1997) results, we nd that
rms with low analyst following receive benets
from expanded nancial disclosure in the form of
a reduction in the cost of equity capital. The
interaction of analyst following and social disclosure is not statistically signicant.
612
1 NANALit
2 LEVit
3 FDISCit
4 SDISCit
LANAL
5
it FDISCit
6 DROEit
SDISCit
7 ROEit
it
613
1 NANALit
FDISCit
2 LEVit
6 DROEit
3 FDISCit
SDISCit
4 SDISCit
7 ROEit
it 9
Coecient estimate
t-Statistic
P-value (two-tailed)
Intercept (?)
NANAL ()
LEV (+)
FDISC ()
SDISC ()
LANALFDISC ()
DROESDISC ()
ROE (?)
0.00130
0.00091
0.00003
0.00007
0.00116
0.00096
0.00109
0.00009
0.667
3.221
1.863
0.284
3.462
2.663
2.469
1.101
0.5058
0.0015
0.0639
0.7771
0.0006
0.0083
0.0143
0.2719
No. of observations=221; adjusted R2=15.58%. Variable denitions: COST=estimated cost of equity capital for rm i, year tthe
industry sector median for year t; NANAL=number of analysts providing a 1-year ahead earnings forecast for rm i, year tthe
industry sector median for year t; LEV=debt to equity ratio, rm i, year tthe industry sector median for year t; FDISC=nancial
disclosure score for rm i, year tthe industry sector median for year t; SDISC=social disclosure score for rm i, year tthe industry
sector median for year t; ROE=return on equity for rm i, year tthe industry sector median for year t; LANAL=a dummy variable
set equal to one if the number of analysts following rm i in year t is below is industry sector median for year t, zero otherwise;
DROE=a dummy variable set equal to one if return on equity for rm i, year t is above the industry sector median for year t, zero
otherwise.
relationship between the level of nancial disclosure and the cost of capital (H1, see Table 8).
We also conrm Botosans (1997) nding that
higher levels of nancial disclosure can reduce the
cost of capital in cases where there is low nancial
analyst following [H3a(i), see Table 9]. Our
results, however, suggest that this relation does
not hold for social disclosures. There is a statistically signicant, positive relation between the level
of social disclosure and the cost of capital, that is,
more social disclosure raises the cost of capital for
the rm (H2, see Table 8). The number of analysts
following the rm does not aect this result
[H3a(ii), see Table 9]. The positive relationship
between cost of capital and social disclosure is
moderated by the return-on-equity of the rm
with more successful rms being less penalized for
social disclosures.
It is important to recognize that these results are
not based on the content of the disclosures. The
disclosure scores reect the completeness and
informativeness of nancial and social disclosures
but they do not indicate whether the information
is good or bad news. There are several possible
614
Acknowledgements
The authors gratefully acknowledge the nancial support of the Certied General Accountants
of Canada Research Foundation and comments
on earlier drafts by Irene Gordon, Marc Epstein
and an anonymous reviewer. The authors also
gratefully acknowledge the contribution of I/B/E/
S International Inc. for providing earnings per
share forecast data, available through the Institutional Brokers Estimate System. These data have
been provided as part of a broad academic program to encourage earnings expectations
research.
Appendix A
Panel 1: Social disclosure categories of information, maximum number of points allocated to the
category, and number of sub-categories allocated
to each categoryinformation provided in the
1991 SMAC/UQAM Report:
(continued on next page)
615
Category of
information
Human resources
Products, services,
and consumers
Community
Environment
Energy resources
Governments
Suppliers
Shareholders
Competitors
Miscellaneous
Totals
Maximum
points
No. of subcategories
18
10
29
23
18
18
6
10
6
6
4
4
100
24
22
10
14
16
9
9
14
170
Other notes to
nancial statements
Pension plans
and leases
Government aid
and income tax
Exports and portion
of products
manufactured in Canada
Information on eects
of price uctuations
Special notes on total
quality, environment,
training, and technology
Miscellaneous
Totals
Category
General information
Financial retrospective
Financial forecasts
Graphs and tables
Points of view on
regulations, competition
and economy
Past performance
and highlights
Future prospects
Investment and
disinvestment
Research, development
and environment
Risks and uncertainties
Chairmans (sic) report
Financial statements
Sector Information
Income Statement
Accounting policies
7
11
4
23
25
5
5
12
22
14
5
2
9
4
10
10
5
34
10
7
13
37
120
261
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