The use of disclosure indices in accounting research: A review article

Abstract

This article is concerned with the measurement of disclosure in published financial reports. In particular, the use of a disclosure index is examined by reviewing the literature that has made use of this measurement technique. Disclosure indices are extensive lists of selected items which may be disclosed in company reports. Calculating an index score for a particular company can give a measure of the extent of disclosure but not necessarily the quality of the disclosure. Items included in the disclosure index may be weighted in order to take account of the fact that some items are viewed as more important than others. The aim of this article is to bring together and summarise a selection of projects that have employed disclosure indices and to comment on the work carried out to date.