Ownership structure, audit quality and information disclosure: An approach at firm level in Vietnam

Abstract

This paper investigates the relationship between the ownership concentration, audit quality and the amount of firm-specific information captured in the stock price. The study covers 195 Vietnamese listed firms on the Hochiminh stock market from 2006 to 2011. The findings confirm the positive relationship between the ownership of the largest shareholder and the stock price informativeness of that firm. Moreover, this relationship is not significant when the largest owner is related to the state. Further, the largest owner would like to disclose more information to the market if his asset, tied with the stock price, is large. The reason is that the asset value could be reduced when the investors punish the owner bad behavior by discounting the stock price. In addition, the results also show a positive impact of audit quality on the disclosure of firm specific information. Moreover, a trend of better information environment for information disclosure is also discovered. Finally, this research also finds out that the ownership concentration of top 3 largest shareholders also has a similar positive impact on the corporate disclosure of firm-specific information.