Cost of equity and disclosure of management's responsibility for financial reports of firms in Thailand
Keywords:cost of equity, information asymmetry, information risk, Sarbanes-Oxley act, voluntary disclosure
Increased disclosures of firm-related information help decrease the cost of capital of firms. This study tests the disclosure proposition by investigating the relationship between the voluntary disclosure of the statement of management's responsibility for ﬁnancial reports (MRF) and the cost of equity in firms listed on the Stock Exchange of Thailand during the years of 2013–2015. The results show that firms with MRF have lower cost of equity than firms without MRF because voluntary disclosures of MRF reduce information asymmetry and estimation risks. The empirical evidence serves as a guideline for the Securities and Exchange Commission in making decisions regarding the requirement of disclosing management responsibilities on the ﬁnancial reports for listed companies, in compliance with the Sarbanes-Oxley Act.
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This is an open access article under the CC BY-NC-ND license http://creativecommons.org/licenses/by-nc-nd/4.0/