Essays on Voluntary Disclosures in Australian Corporate Sector Case Study

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The paper "Voluntary Disclosures in Australian Corporate Sector" is a perfect example of a finance and accounting case study. Rampant corporate failures across the globe as into international interest on corporate governance issues, most of the reforms in corporate governance have been built around the rampant failures of major companies across the globe. Both practitioners and academicians have drawn much interest in corporate governance and voluntary disclosure. Managers have the discretion to disclose voluntarily or not to disclose company activities. Guidry & Patten (2012) argues that companies only adopt voluntary disclosure only if the benefits of voluntary disclosure exceeds the cost of non- disclosure.

Some of the costs incurred here include an agency cost which requires the company shareholders to appoint an independent committee of directors and auditors to monitor manager’ s behaviors and information as asymmetry costs that are incurred by managers as a result of the depreciation of firm. Cho, Freedman & Patten (2012) states that companies that are listed in the stock exchange and of high quality will tend to disclose more information more voluntarily compared to non listed companies and once with low quality.

The listed companies disclose more information as a way of attracting both internal and external investors, hence voluntary disclose is a way of attracting the investors. This theory is called signaling theory and in support of the signal theory, Guidry & Patten (2012) states that high-quality corporate governance signals their management quality through voluntary disclosure. It is not easy to replicate these high-quality standards by poorly managed firms. The voluntary disclosure improves a firm’ s value since well-informed investors will always infer that companies with high corporate governances quality since they are less risky compared with companies with less corporate governance quality. This paper intends to discuss voluntary disclosure within Australia two listed companies which are Virgin Airline Company limited operating in the Transport industry and Origin Energy limited operating in the energy sector.

The paper will compare and contrast the level of disclosure between the two firms highlighting the gaps that exist and how the gaps can be corrected.


Cho, C., Freedman, M., & Patten, D. (2012). Corporate disclosure of environmental capital expenditures: A test of alternative theories. Accounting, Auditing & Accountability Journal, 25(3), 486-507.

Guidry, R., & Patten, D. (2012). Voluntary disclosure theory and financial control variables: An assessment of recent environmental disclosure research. In Accounting Forum (Vol. 36, No. 2, pp. 81-90). Elsevier.

Rankin, M., Windsor, C., & Wahyuni, D. (2011). An investigation of voluntary corporate greenhouse gas emissions reporting in a market governance system: Australian evidence. Accounting, Auditing & Accountability Journal, 24(8), 1037-1070.

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