Financial Reporting Conservatism and Voluntary CSR Disclosure

DOI: 10.2308/horizons-17-093, 2020

44 Pages Posted: 13 Apr 2020

See all articles by Seong-Yeon Cho

Seong-Yeon Cho

Oakland University

Pyung Kyung Kang

Wayne State University; Sogang University

Cheol Lee

Wayne State University

Cheong Kyu Park

Woodbury University

Date Written: March 18, 2020


This paper examines whether a firm’s degree of conservatism in financial reporting is associated with its voluntary non-financial corporate social responsibility (CSR) disclosures and the stock price reaction to such disclosures. Theoretical and empirical studies find that the amount of voluntary disclosures and their credibility vary depending on the degree of financial reporting conservatism. We expand this line of questioning and find that firms that adopt conservative financial reporting are less likely to disclose CSR information. Further analyses show that the market reaction to a firm’s CSR disclosure is reduced when its financial reporting is more conservative. Our evidence suggests that the quantity and quality of CSR disclosures are associated with the degree of accounting conservatism. Therefore, stakeholders should consider a firm’s financial reporting policies when interpreting CSR disclosures.

Keywords: Corporate Social Responsibility (CSR); Voluntary Disclosure; Accounting Conservatism; Disclosure Credibility; Soft Information

JEL Classification: M40; M41

Suggested Citation

Cho, Seong Y and Kang, Pyung Kyung and Kang, Pyung Kyung and Lee, Cheol and Park, Cheong Kyu, Financial Reporting Conservatism and Voluntary CSR Disclosure (March 18, 2020). DOI: 10.2308/horizons-17-093, 2020, Available at SSRN: or

Seong Y Cho

Oakland University ( email )

Rochester, MI 48084
United States
248-370-4307 (Phone)

Pyung Kyung Kang

Wayne State University ( email )

5229 Cass Ave.
130 Rands House
Detroit, MI 48202
United States
313-577-7835 (Phone)
313-577-2000 (Fax)

Sogang University ( email )

35 Baekbeom-ro, Mapo-gu
Seoul, Seoul 04107
Korea, Republic of (South Korea)
+82-2-3274-4885 (Phone)

Cheol Lee (Contact Author)

Wayne State University ( email )

United States
313-577-2242 (Phone)

Cheong Kyu Park

Woodbury University ( email )

7500 Glenoaks Blvd.
Burbank, CA 91510
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics