Dr. Zabihollah Rezaee accepted for publication in Advances in Accounting

For release:  August 9, 2017

Dr. Zabihollah Rezaee, Thompson-Hill Chair of Excellence and professor of Accountancy, recently had his paper accepted for publication in Advances in Accounting. The paper is entitled "Voluntary Disclosure of Nonfinancial Information and Its Association with Sustainability Performance." Dr. Rezaee co-authored this paper with Dr. Ling Tuo, assistant professor at Lawrence Technological University in Michigan and former FCBE Ph.D. student.

This paper investigates management incentives for disclosing voluntary non-financial information and whether such disclosure is associated with firms' environmental, social, and governance (ESG) sustainability performance. The authors hand-collected 580 sample firms' voluntary non-financial disclosure on product, competition, industry, customers, trends, and technology data from their annual reports in 2010. They found that information contents and managerial motivations play an important role in assessing the antecedents and consequences of non-financial disclosure. Specifically, they found that earnings quality is a more pronounced factor in influencing forward-looking non-financial disclosures, whereas proprietary cost is a more pronounced factor in influencing historical non-financial disclosures. Using the ratings from the KLD database to construct ESG sustainability performance, the authors found a two-directional association between non-financial disclosures and sustainability performance. Specifically, forward-looking non-financial disclosures are associated with a one year lead in sustainability performance, whereas current year sustainability performance is linked to more disclosures of historical non-financial information in the year-end annual filings.