Mandatory Disclosure in Annual Reports in Bangladesh

The importance of disclosure is justified by agency theory political economy theory stakeholder theory institutional theory and signaling theory. The agency theory states that mandatory disclosure in corporate annual reports is one of the fundamental elements for reducing information asymmetry between insiders and outsiders. These theories provided reasons for corporate disclosure which is important for gaining investors’ confidence developing efficient markets creating good corporate governance protecting minority interest ensuring an investment friendly environment harmonizing international accounting standards to cope the national market and economy with the challenges of globalization and for protection of investors. Disclosure is made for giving good signal of firm as justified by signaling theory. More importantly disclosure ensures transparency accountability fairness and responsibility of corporations to stakeholders. Realizing the facts the different regulatory bodies of a country always put pressure on the listed companies to disclose adequate information in their annual reports as stated by institutional and stakeholder theory. Corporate mandatory disclosur