Determinants of Voluntary Disclosure of Financial Information by Ethiopian Tax Payers: In Case of Eastern Ethiopia

Abstract

Voluntary financial information disclosures are the focus of an increasing amount of attention by accounting researchers, regulatory agencies, Creditors, Investors, employees and others. The Income Tax Law of Ethiopia requires taxable income of businesses to be determined on the basis of financial statements prepared according to ‘generally accepted accounting standards’ now it tends to change according to international financial reporting standards. This study examines the voluntary disclosure of annual financial report made by Ethiopian taxpayers especially category ‘A’ and category ‘B’ and factors influence financial information disclosure. To examine the relationship of theoretical factors that might affect the financial information disclosure the paper used logistic regression and cross tabulation. As logistic regression result indicates that the only significant but weak variable is debt to equity-ratio. To keep pace with the world changing environment, Ethiopian firms should disclose their financial information to users.

Keywords: Voluntary financial information disclosures