Materiality and voluntary disclosures☆

Abstract

Materiality has important implications for voluntary disclosures when there is an affirmative duty to disclose. Using a change in rules on the disclosure of advertising costs, Heitzman et al. (2009) empirically demonstrate that, indeed, it is important to factor in the effect of the materiality constraint on firms’ disclosure behavior. This discussion reviews the contributions and limitations of Heitzman et al. (2009).