The informativeness of voluntary disclosure in the annual reports of listed industrial companies in South Africa

Users of annual reports require an extensive range of financial and non‐financial information, whether mandatory or voluntary, in order to assess the fair value of an investment. The extent and quality of voluntary information is dependent on company policy, and companies need to make decisions in favour of or against the disclosure of certain informative items. A survey was conducted to examine the perceptions of the compilers and the users of annual reports on the price‐informative value of voluntary disclosures in annual and interim reports. The rankings awarded by compilers and users to the various voluntarily disclosed items were compared in order to determine the significance of the differences between the perception of the two groups. Significant differences were identified and suggestions are made for the improvement of corporations’ voluntary disclosure strategies.