Firm Characteristics and the Extent of Voluntary Disclosure : The Case of Egypt

In a society depending on real time information, corporate disclosure is crucial for the capital market efficiency. The more disclosures a company makes, the more transparent becomes the information to investors, the lower becomes the information asymmetry and more credible the firms will be for the market. The purpose of this study is to investigate the association between the voluntary disclosure level in annual reports and firm characteristics of more active 50 Egyptian companies listed on the Egyptian Stock Exchange of the non-financial sector during the period 2007-2010. The firm characteristics used in the study are: firm size, auditor size, profitability, and firm's age. A disclosure checklist consisting of 60 voluntary items of information is developed and statistical analysis is performed using multiple regression analysis. The results of univariate and multivariate analyses indicated that firm size and profitability have significant positive association with voluntary disclosure level in annual reports. On the other hand, auditor size and firm's age do not have any significant association with voluntary disclosure level. However, this paper has contributed to the academic literature that firms in the Middle East provide voluntary corporate information which builds a confidence to the investors in general