the administration reports of the Brazilian companies and the participation of such companies in different levels of
corporative governance of BOVESPA. For the Brazilian bank institutions, Costa, Goldner and Galdi (2007) showed that the
participation on the different levels of governance is one of the topics that influences its disclosure levels.
Hypothesis 7 (H7): Companies which are part of the regulated industries (for example: Electric power and
telecommunications industries) show higher disclosure levels than those companies which are part of the non-regulated
industries. This hypothesis was suggested for the reason that the companies which are part of the regulated industries have
already accomplished the rendering of accounts requirements to their specific regulatory bodies.
Hypothesis 8 (H8): Companies which have tradition in the issuing of accounting reports for the North American
market are closer to the international requirements than those which started to issue such reports recently (1999 and the
following years). It is assumed that, due to the more frequent habit of issuing accounting reports in accordance with the
North American standards, the companies already practice a policy of greater disclosure.
In the following two sections, there is a review of the literature about accounting and disclosure, the convergence
of the accounting standards and the disclosure of financial instruments. In the fourth section, there are the details of the
methodological aspects of the research, which are followed by the presentations of the results and its analysis. Finally, there
are the considerations and recommendations for the future researches.
2
Disclosure and accounting
As the external users of the accounting information, “the investors do not have the same level of information that
the managers of the company have, so that they need independent instruments to evaluate the real situation of the
companies” (LOPES and MARTINS, 2005, p. 31). In such way, when the company promotes the disclosure in its
accounting reports in a incomplete manner, the information which are known by the external users may show, among other
factors, a lower risk than that one which the entity is really exposed to; as a consequence, “the relation risk-return, which is
the key component of all the movement process of resources in the economy, is sensibly prejudiced” (LOPES and LIMA,
1998, p. 9).
This providing of incomplete information causes the occurrence of informational asymmetry and it impacts directly
the content of the basic objective of the accounting, which is to provide its users with information of economical, financial
and productive nature. According to Amihud and Mendelson (1991, p. 62), the informational asymmetry “can be reduced by
the disclosure of internal information in regular financial reports and occasional announcements”. So, the accomplishment
of the basic objective of the accounting reduces the informational asymmetry through the disclosure practices (IUDÍCIBUS,
MARTINS and GELBCKE, 2006).
4
Convention