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Article
Publication date: 13 April 2012

Sonia Jindal and Manoj Kumar

Human capital (HC) disclosures by firms are voluntary as per the GAAPs in most of the countries including India. Therefore, a wide discrepancy exists across Indian firms with…

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Abstract

Purpose

Human capital (HC) disclosures by firms are voluntary as per the GAAPs in most of the countries including India. Therefore, a wide discrepancy exists across Indian firms with respect to their HC disclosures. This paper aims to investigate the extent and determinants of HC disclosure levels of the Indian listed firms in a two‐stage analysis.

Design/methodology/approach

In the first stage, a 12‐item index is developed and is used to measure the extent of HC disclosures of 97 listed firms. In the second stage, a regression analysis is carried out to ascertain the determinants of HC disclosure levels of the Indian listed firms.

Findings

The results point out that HC disclosure levels have high variations among the sample firms with information technology firms having highest average HC disclosure levels. Further, regression results indicate that a firm's “size” and “employees' expenses as a proportion of its total operating expenses” have a significant positive bearing on its level of HC disclosure, and “industry affiliation”, “globalisation”, “profitability”, “ownership concentration”, “age”, “structural complexity”, “leverage” and “auditor reputation” do not have significant influence on its level of HC disclosure.

Research limitations/implications

This study follows a cross sectional design. A longitudinal study would have the potential to determine any pattern of changes in extent of HC disclosures over time. Index construction involves subjective judgment. The study assumes that the annual reports are the primary documents available to stakeholders requiring information about the firms.

Practical implications

The HC disclosure index constructed in this study can be used as a benchmark by the Indian firms to enhance their HC disclosures in future. It can be an aid to the regulators as and when they decide on an accounting standard for HC disclosures. The extent of HC disclosure of individual firms measured by this study can be used by the investors to identify the Indian firms which disclose more HC information. The determinants of HC disclosures can be used by the investors in identifying the other Indian firms (not in the study sample) which potentially may have high HC disclosures.

Originality/value

The study adds to the existing literature by constructing a suitable index to measure the level of HC disclosures in the annual reports of the Indian listed firms. Further, this is the first ever study to investigate the extent and determinants of HC disclosures of Indian listed firms. This study empirically validates a new proposition which has never been tested by any of the existing studies. The new proposition validated is: firm's “employee expenses as a proportion of its total operating expenses” has a significant positive bearing on its level of HC disclosures. Additionally this is the first ever study to use Poisson regression to ascertain determinants of HC disclosure practices.

Details

Journal of Intellectual Capital, vol. 13 no. 2
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 17 April 2019

Rosane Maria Seibert and Clea Beatriz Macagnan

This paper aims to explain the extent of social responsibility disclosure by Brazilian philanthropic higher education institutions (PHEIs). This paper assumes that there is…

Abstract

Purpose

This paper aims to explain the extent of social responsibility disclosure by Brazilian philanthropic higher education institutions (PHEIs). This paper assumes that there is information asymmetry between these organizations and their stakeholders.

Design/methodology/approach

The presence of indicators on the organizations’ webpage generated a disclosure index for each PHEI of the sample. Afterwards, this paper performed regression tests, which identified the determinants of PHEIs social responsibility disclosure extent.

Findings

The results support the legitimacy theory as a theoretical basis for social responsibility disclosure extent. The evidenced indicators and the non-rejected hypotheses, related to complexity, diversification, regional factor, specific event and quality, confirm the concern with transparency and accountability of commitments assumed by the social contract.

Research limitations/implications

This research is limited to social responsibility disclosure related to the legitimacy theory and the interests of some stakeholders and to Brazilian PHEIs and their webpages. These limitations mean opportunities for future research studies addressing different information disclosure, foundations of other theories, interests of each specific stakeholder or other stakeholders in other communication channels and other countries, which enable comparisons of results.

Practical implications

The disclosure of extent determinants serve as the basis for the establishment of disclosure and accountability policies for PHEIs.

Originality/value

The originality of this research consists of analyzing the determinants of disclosure from the information of the stakeholders’ interest. They are able to legitimize organizations, allowing them to remain in the community where they operate.

Details

Meditari Accountancy Research, vol. 27 no. 2
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 3 May 2016

Venancio Tauringana and Lyton Chithambo

The purpose of this paper is to investigate compliance with risk disclosure requirements under International Financial Reporting Standard (IFRS) 7 by Malawian Stock…

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Abstract

Purpose

The purpose of this paper is to investigate compliance with risk disclosure requirements under International Financial Reporting Standard (IFRS) 7 by Malawian Stock Exchange-listed companies over a three-year period. Specifically, the paper examines the extent and determinants of risk disclosure compliance with IFRS 7.

Design/methodology/approach

The study uses a mixed-method approach. The quantitative approach employs the research index methodology and uses panel data regression analysis to examine the relationship between proportion of non-executive directors (NEDs), size, gearing and profitability and the extent of risk disclosure compliance. The results of the panel data regression analysis are triangulated by the qualitative research approach in the form of personal interviews with company managers.

Findings

The results indicate that over the three years, the extent of compliance with IFRS 7 is, on average, 40 per cent which is very low. The regression results suggest that NEDs, size and gearing are significantly and positively associated with the extent of risk disclosure compliance under IFRS 7. The results of qualitative approach are mixed since some support and whilst others contradict the regression results.

Research limitations/implications

The sample size is very small which may affect the generalisability of the study.

Originality/value

The use of a mixed-methods approach to examine the determinants of risk disclosure compliance provides additional insights not provided in prior studies. The contradicting results suggest that more research using the mixed approach is required to provide more robust evidence of the determinants of risk disclosure compliance.

Details

Journal of Accounting in Emerging Economies, vol. 6 no. 2
Type: Research Article
ISSN: 2042-1168

Keywords

Article
Publication date: 20 February 2008

Jinghui Liu and Dennis Taylor

The purpose of this paper is to provide Australian evidence on both the extent and key determinants of discretionary disclosure in company annual reports of information about top

7040

Abstract

Purpose

The purpose of this paper is to provide Australian evidence on both the extent and key determinants of discretionary disclosure in company annual reports of information about top executives' share rights, options and termination entitlement. Such information has value‐relevance to shareholders and the public, but prior evidence is lacking about the factors that influence top managements' decisions to voluntarily disclose or withhold personally sensitive details about their own remuneration.

Design/methodology/approach

The extent and nature of executive remuneration disclosure are obtained from the content analysis of annual reports of 191 Australian listed companies for the years 2003 and 2004, prior to a more detailed prescriptive regulatory environment occurring in this area when international financial reporting standards became effective in 2005. To explain the factors that could influence managements' decisions about the extent of discretionary disclosure details concerning their own remuneration, the perspectives of legitimacy theory and corporate governance structures are invoked. Relationships are hypothesized and tested between the extent of remuneration disclosure and the following variables: shareholder activism, media attention, company size, board composition and existence of a remuneration committee.

Findings

Regression results reveal significant relationships between these determinants and the extent of disclosures of rights, options and termination benefits of executives. These results suggested that, under a relatively unregulated environment, corporate management will react to community and shareholders' expectations by revealing personally sensitive information when their company is placed in a situation of higher shareholder and public scrutiny and when it is structured to meet expectations of good corporate governance.

Originality/value

This study advances knowledge of the influence that companies' legitimation circumstances and corporate governance structures can have on public disclosure decisions by management about the level of detail of their remuneration – information that is of high interest to shareholders and personally sensitive to management.

Details

Corporate Governance: The international journal of business in society, vol. 8 no. 1
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 7 August 2017

Praveen Bhagawan M. and Jijo Lukose P.J.

Theoretical studies suggest that hedging helps firms to reduce their financial distress costs and underinvestment problem especially if the markets are imperfect. Hence hedging…

1161

Abstract

Purpose

Theoretical studies suggest that hedging helps firms to reduce their financial distress costs and underinvestment problem especially if the markets are imperfect. Hence hedging, through the use of currency derivatives, is one of the important financial policies for firms. The purpose of this paper is to empirically examine the determinants of derivatives usage by Indian firms using financial disclosures on currency derivatives by non-financial constituents of S&P CNX 500 for 2009.

Design/methodology/approach

We manually collect the data on foreign currency derivatives from firms’ annual reports for 2009 and then follow Haushalter’s (2000) approach to examine the determinants of firms’ decision to hedge. A firm can make its hedging decision at once, deciding whether to hedge and how much to hedge. Given the nature of dependent variable that is censored, it is appropriate to use Tobit regression. A firm can also decide its hedging decision in two steps by deciding first on whether to hedge and later how much to hedge. The former is modelled by probit regression and later by conditional regression.

Findings

Our empirical evidence suggests that forwards are the main instruments for managing currency risk followed by options and swaps. The objectives, in the order of priority, are reduction in exposure associated with foreign currency receivables, foreign currency long-term loans and foreign currency payables. Firm’s decision to hedge is positively related to size, foreign exchange exposure and leverage, while negatively related to liquidity and investment opportunities. We find evidence of higher derivative usage by firms with both higher currency risk and higher financial distress costs.

Practical implications

The findings of this paper will help corporates, researchers and regulators to understand firms’ motives behind hedging.

Originality/value

This is the first empirical study that examines the determinants of firm’s decision to hedge and the extent of hedging in the context of emerging economies like India.

Details

Studies in Economics and Finance, vol. 34 no. 3
Type: Research Article
ISSN: 1086-7376

Keywords

Article
Publication date: 29 April 2014

S. Zainon, R. Atan and Y. Bee Wah

The purpose of this paper is to examine the determinants of the extent of disclosure by non-profit organizations (NPOs) in Malaysia due to the growing interest in the disclosure…

1762

Abstract

Purpose

The purpose of this paper is to examine the determinants of the extent of disclosure by non-profit organizations (NPOs) in Malaysia due to the growing interest in the disclosure practice studies of NPOs and given the importance of disclosure to ensure accountability and transparency.

Design/methodology/approach

This study involves three phases. First, the paper identifies information items NPOs need to disclose. Second, the paper conducts an online survey to determine the ratings of importance for the disclosure items. Third, the paper measures the extent of disclosure from the annual returns of 101 Malaysian NPOs for the year 2009. The paper uses hierarchical regression analysis to determine the significant determinants of information disclosure.

Findings

The key determinants are establishment of an external audit, financial performance and government support in terms of grants. The results show that the presence of external auditors promotes better reporting practice. Malaysian NPOs that receive funding and those with better financial standing disclose more information.

Research limitations/implications

The sample only covers NPOs with tax-exempt status in the state of Selangor and Wilayah Persekutuan in Malaysia. The sample size of 101 registered NPOs limits the generalization of the results. Inclusion and analyses of additional NPOs may offer generalizable results.

Practical implications

This study provides empirical evidence concerning the establishment of external audit for better information disclosure. It also provides 88 items that are important and required by stakeholders.

Originality/value

The study is based on 88 items of information according to the needs of stakeholders for information. The NPOs reporting index can assist the preparers of charity reporting in fulfilling the stakeholders’ requirements. The reporting index can also be used to assess the information disclosure of NPOs in Malaysia.

Details

Asian Review of Accounting, vol. 22 no. 1
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 5 June 2017

Ben Kwame Agyei-Mensah

This paper aims to investigate compliance with risk disclosure requirements under International Financial Reporting Standard (IFRS 7) by firms listed on the Ghana Stock Exchange…

1423

Abstract

Purpose

This paper aims to investigate compliance with risk disclosure requirements under International Financial Reporting Standard (IFRS 7) by firms listed on the Ghana Stock Exchange (GSE) over a three-year period. Specifically, the paper examines the extent, quality and determinants of risk disclosure compliance with IFRS 7.

Design/methodology/approach

The study uses 90 firm-year observations for the period 2011-2013 for firms listed on the GSE. Each annual report was individually examined and coded to obtain the extent and quality of corporate risk disclosure index. Descriptive analysis was performed to provide the background statistics of the variables examined. This was followed by regression analysis, which forms the main data analysis.

Findings

The results indicate that over the three years, the extent of compliance with IFRS 7 is, on average, 53 per cent, which is very low; the quality of the disclosures is, on average, 33 per cent, which is also very low. The regression results suggest that proportion of non-executive director (PNED) is significantly and positively associated with the extent of risk disclosure compliance under IFRS 7. Board size was found to be significantly and positively associated with quality of risks disclosure compliance.

Originality/value

This is the first study in Ghana that considered the impact of corporate governance factors on the extent and quality of IFRS 7 risk disclosure compliance. The findings of this study will help market regulators in Ghana in evaluating the adequacy of the risk disclosures by listed firms.

Details

Corporate Governance: The International Journal of Business in Society, vol. 17 no. 3
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 10 January 2018

Merve Kılıç and Cemil Kuzey

This paper aims to examine the nature and extent of forward-looking disclosures in early examples of integrated reporting and to investigate the determinants of those disclosures.

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Abstract

Purpose

This paper aims to examine the nature and extent of forward-looking disclosures in early examples of integrated reporting and to investigate the determinants of those disclosures.

Design/methodology/approach

The sample for research involved 55 non-financial companies whose reports are available in the Integrated Reporting Examples Database for the year 2014. The authors used content analysis to investigate the quantitative and qualitative forward-looking disclosures among early adopters of integrated reporting. The forward-looking disclosure index (FLDI) was categorized into two main groups, quantitative and qualitative, including 30 items in total. Multivariate ordinary least squares regression was used to investigate the associations proposed in the research hypotheses.

Findings

The authors determined that the majority of the entities tended to provide qualitative forward-looking disclosures rather than quantitative. Further, the findings showed that gender diversity and firm size are positively related to forward-looking disclosures, whereas leverage is negatively related to forward-looking disclosures. Contrary to expectations, the authors did not find a significant impact created by board size, board composition, profitability or industry on forward-looking disclosures.

Originality/value

The research contributes to the current integrated reporting and forward-looking disclosure literature. To the best of the authors’ knowledge, there is no prior study that has investigated forward-looking disclosures in integrated reports. This study contributes to the current literature by examining the determinants of forward-looking disclosures by categorizing them as quantitative and qualitative. Further, this research adds empirical findings to the literature on the association found between female directors and forward-looking disclosures.

Details

Managerial Auditing Journal, vol. 33 no. 1
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 22 October 2021

Haitham Nobanee and Nejla Ould Daoud Ellili

This study aims to explore the extent of voluntary corporate governance disclosure in the annual reports of banks in the UAE, operating in an emerging economy in the Gulf…

Abstract

Purpose

This study aims to explore the extent of voluntary corporate governance disclosure in the annual reports of banks in the UAE, operating in an emerging economy in the Gulf Cooperation Council region. It also examines the effect of this non-financial disclosure on bank performance by differentiating conventional and Islamic banks.

Design/methodology/approach

This study applies content analysis to explore the extent of voluntary corporate governance disclosure using data collected from the annual reports of all the banks traded on the UAE financial markets from 2003 through 2020. It further examines the potential effect of voluntary disclosure on bank performance using dynamic panel data regressions.

Findings

The results indicate a low level of voluntary corporate governance disclosure in the annual reports for most disclosure indices. However, conventional and Islamic banks do not differ significantly. Additionally, the results of the robust dynamic panel data from the two-step generalized method of moments system estimation confirm that voluntary corporate governance disclosure does not affect bank performance significantly.

Practical implications

The findings of this study would benefit the central bank and lawmakers in the UAE in developing a framework for appropriate voluntary disclosure and enhancing the corporate governance framework to improve the quality of annual reports.

Originality/value

This study contributes to the literature on the extent of corporate governance disclosure, as well as its association with bank performance in an emerging economy by differentiating between conventional and Islamic banks.

Details

Corporate Governance: The International Journal of Business in Society, vol. 22 no. 4
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 7 August 2017

Ben Kwame Agyei-Mensah

This paper aims to examine the relationship between corporate governance, corruption and compliance with International Financial Reporting Standard (IFRS 7) risk disclosure…

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Abstract

Purpose

This paper aims to examine the relationship between corporate governance, corruption and compliance with International Financial Reporting Standard (IFRS 7) risk disclosure requirements in listed firms in two Sub-Saharan Africa countries: Botswana and Ghana. This study tries to test whether the transparency level of a country has any impact on the transparency level of its firms.

Design/methodology/approach

The study uses 174 firm-year observations between the period 2013-2015 for listed firms in the two countries. Each annual report was individually examined and coded to obtain the disclosure of corporate risk disclosure index. Descriptive analysis was performed to provide the background statistics of the variables examined. This was followed by regression analysis, which forms the main data analysis.

Findings

The results suggest that the extent of risk disclosure compliance over the three-year period is, on average, 63 and 53 per cent for Botswana and Ghana, respectively. The differences in the disclosure levels in the two countries can be attributed to the different levels of corruption in the two countries. One way of hiding corrupt practices is for companies to disclose scanty information.

Originality/value

This is one of the few studies in Sub-Saharan Africa that tests the transparency levels of listed firms in the two countries by considering the impact of corporate governance factors on IFRS 7 risk disclosure compliance. The findings of this study will help market regulators in Ghana, Botswana, the Sub-Saharan Africa Security and Exchange Commission (SEC) and the Sub-Saharan Africa exchanges in evaluating the adequacy of the current disclosure regulations in their countries.

Details

Corporate Governance: The International Journal of Business in Society, vol. 17 no. 4
Type: Research Article
ISSN: 1472-0701

Keywords

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