ISSN 2039-2117 (online) ISSN 2039-9340 (print) Mediterranean Journal of Social Sciences Published by MCSER-CEMAS-Sapienza University of Rome Vol 4 No 2 May 2013 319 The Determinants of the Quality of Financial Information Disclosed by French Listed Companies Jouini Fathi Faculty of economic and management of Sousse, Tunisia fathijouini@fdseps.rnu.tn Doi:10.5901/mjss.2013.v4n2p319 Abstract This study examines the relationship between the quality of financial information disclosed and governance mechanisms on certain features of the board, ownership structure and control system for French companies listed on the SBF 250 for a period of five years from 2004 to 2008. The quality of financial information is approximated by the discretionary accruals and with a disclosure index with 78 items. The result shows a positive effect of certain variables such as the size of the board of directors, the members' attendance at Board meetings and the presence of the Big 4 and the presence of a dual listing. Keywords:disclosure, corporate governance, accruals, characteristics of the board 1. Introduction The beginning of the first decade of the 21st century was marked by several scandals, fraud and manipulating all kinds of information. Scandals are established in the presence of misdeeds committed by director belonging to the large companies and normally supposed to be trustworthy person. These executives cannot effectively use or divert funds and overestimate the value of assets with the cooperation of officials in other companies or subsidiaries. These poor practices are considered an evidence of the failure of current models of corporate governance, and the presence of risk of disclosure lack. These scandals renewed debates about the relative merits of the accounting principles adopted in the United States and led to the introduction of new laws. A company must provide to its shareholders, regulators and markets through the annual reports financial information with higher quality. It is a necessary factor for good governance. Thus, the disclosure is closely linked to the practice of good corporate governance. Improving corporate governance is considered among the themes that have attracted the attention of researchers in finance and since the scandals that took place in the early 2000s (Gaint et al, 2009). The traditional literature on corporate governance has proposed a solution to the problems of control by implementing of incentive contracts. These were supposed to solve the problems concerning the cost of access to perfect information and the incapacity of shareholders to deal correctly information. Incentive mechanisms seek to achieve a concordance between the interests of the manager and shareholders. Since the 1990s the solution to the problem of information asymmetry appears to be supported by the disclosure of financial information (Gainet et al., 2009). Voluntary or mandatory disclosure would have the merit to reduce information asymmetries and enable effective monitoring of management, and thereby establish good governance. Managers tend to provide voluntary disclosures to make investors aware of their ability to manage and avoid mispricing of their actions and performance. They are likely to provide voluntary disclosures and forecasts to show to investors that they are interested in the evolution of the economic environment in which the company operates and they are able to respond quickly to changes (Gaint et al., 2009).This is a positive signal to investors about the abilities of managers, and has a positive effect on stock returns and on the market value of the firm (La Porta, Lopez de Silanes, Shleifer, and Vishny, 2000). Information disclosed should have certain quality. It must be reliable and relevant to help users and stakeholders in the decision making. For this reason, it is necessary to detect the determinants of the quality of information disclosed. The theoretical arguments that justified the selection of the determinants of financial disclosure are the presence of agency costs, properties cost, political cost, litigation cost and signal theory (Healy and paleplu, 2001; Watson, Shrives and Marston, 2002).