THE ROLE OF VOLUNTARY DISCLOSURE PRACTICES IN THE TRANSPARENCY OF FINANCIAL REPORTING

Abstract

The present article discusses the role of voluntary disclosure practices in transparency in financial reporting. The term transparency here means the extent to which the investors can access the financial information includes the share valuation, credit worthiness and ultimately the financial position of the company. Disclosure is a detailed statement about the transactions. The present work identifies features and benefits of voluntary disclosure practices, the role played by the voluntary disclosures in the efficient working of financial reporting. It also improves the competitiveness and presently the firms considered the voluntary disclosure as opportunity rather than burden. In this paper, the importance of transparency in financial reporting and expressed its limitations and benefit of disclosure and transparency. It also highlights the issues and impact of voluntary disclosure of information. Therefore the purpose of this research is to understand in how extend the voluntary disclosure practices boosts up the transparency in financial reporting.