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Article
Publication date: 15 February 2024

Alemayehu Yismaw Demamu

Ethiopia has enacted laws on transparency and disclosure of information in state-owned enterprises (SOEs). However, these laws are not strict enough, with the transparency and…

Abstract

Purpose

Ethiopia has enacted laws on transparency and disclosure of information in state-owned enterprises (SOEs). However, these laws are not strict enough, with the transparency and disclosure practices disappointing in the country. Thus, this study aims to investigate the legal framework governing transparency and disclosure in SOEs.

Design/methodology/approach

This study uses doctrinal, qualitative and comparative approaches. Domestic legal texts are appraised based on the organization for economic co-operation and development Guideline on Corporate Governance of State-owned Enterprises, the World Bank Toolkit on Corporate Governance of State-owned Enterprises and best national practices. This approach has been further corroborated by qualitative analysis of the basic principles of transparency and disclosure.

Findings

The finding reveals that the laws on transparency and disclosure do not comply with global practices and are inadequate to ensure transparency and discourse in SOEs. They fail to establish appropriate disclosure frameworks and practices at the SOE and state-ownership entity levels. They also indiscriminately subject enterprises to multiple auditing functions and conflicting responsibilities.

Originality/value

To the author’s knowledge, this study is the first legal literature on transparency and disclosure in Ethiopian SOEs. This study assists the state as owner in reforming the laws and uplifting SOEs from their current unpleasant condition. It can also become a reference for future research.

Details

International Journal of Law and Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 26 September 2023

Ricky Chung, Lyndie Bayne and Jacqueline Birt

This study investigates the impact of environmental, social and governance (ESG) disclosure on firm financial performance under a mandatory disclosure regime in Hong Kong.

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Abstract

Purpose

This study investigates the impact of environmental, social and governance (ESG) disclosure on firm financial performance under a mandatory disclosure regime in Hong Kong.

Design/methodology/approach

The authors examine the largest 109 firms listed on the Hong Kong Exchange (HKEX) as of the financial year of 2019. The authors use a manually constructed index based on the most current 2019 ESG Reporting Guide launched by HKEX, followed by quantitative statistical methods using a model that follows the valuation framework by Ohlson.

Findings

The authors find a significant positive association between total ESG disclosure level and firm financial performance in the main tests. However, when the total ESG scores are partitioned into environmental and social subscores, the results show that only social disclosures are value relevant. Moreover, the results demonstrate that environmental and social subscores are both significant when return on assets (ROA) is used as a dependent variable. Furthermore, the robustness tests show that only qualitative ESG information is value relevant to share prices, while both quantitative and qualitative ESG information are relevant to ROA. In addition, the disclosure quality of annual reports alone is good in explaining the firm financial performance in this study.

Originality/value

This study contributes to existing non-financial reporting literature using hand-collected data as well as examining the firm financial performance of ESG reporting under the mandatory disclosure regime in the Hong Kong context.

Details

Asian Review of Accounting, vol. 32 no. 1
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 10 May 2023

Memiyanty Abdul Rahim, Nur ’Ain Syahirah Shaharuddin and Norazah Mohd Suki

The purpose of this study is to examine the level of Shariah governance disclosure among Islamic banks in Malaysia and the Gulf Cooperation Council (GCC) countries (i.e. Kuwait…

Abstract

Purpose

The purpose of this study is to examine the level of Shariah governance disclosure among Islamic banks in Malaysia and the Gulf Cooperation Council (GCC) countries (i.e. Kuwait, Bahrain, United Arab Emirates, Qatar, Oman and Saudi Arabia). On top of that, the effect of Shariah governance disclosure on Islamic banks financial performance is investigated.

Design/methodology/approach

Data underwent quantitative content analysis and a mean comparison of the Shariah governance disclosure mechanisms as well as multiple regression analysis. Shariah governance information is obtained from the Islamic banks' official websites and the Bursa Malaysia Exchange.

Findings

The results of the content analysis revealed that the level of Shariah governance disclosure among Malaysian Islamic banks has been more pronounced than in the GCC countries. Additionally, the multiple regression analysis results specified that of the five Shariah governance disclosure mechanisms, the Shariah committee emerged as the strongest determinant in the financial performance of the Islamic banks, followed by transparency and disclosure.

Practical implications

Islamic banks should emphasise publishing Shariah governance information in annual reports to reflect superior accounting practices as assessed by certified Shariah auditors with an effective monitoring system.

Originality/value

The empirical findings are vital for serving as a guideline for Islamic banks in Malaysia and the GCC countries to disclose their practice of Shariah governance and gain empirical insights into its effect on firms’ financial performance. Following that, Islamic banks would improve their accounting practices while adhering to Shariah principles, strengthen internal controls and boost their brand reputation.

Details

Journal of Islamic Accounting and Business Research, vol. 15 no. 4
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 23 November 2023

Anjali Srivastava and Anand

Corporate disclosures are essential because they provide transparent and accurate information about a company's financial health, performance, risks and governance practices. They…

Abstract

Purpose

Corporate disclosures are essential because they provide transparent and accurate information about a company's financial health, performance, risks and governance practices. They enable investors to make informed decisions, promote market efficiency and maintain trust in the financial system. This paper uses bibliometrics to identify the intellectual composition of the literature on corporate disclosure.

Design/methodology/approach

Based on the bibliometric information of 4,551 articles on corporate disclosure research, the authors conducted citation, keyword co-occurrence, bibliographic coupling and publication analyses to elucidate the leading articles, authors, sources, institutions, countries, themes and topics in the field of corporate disclosure from the 1960s to 2021.

Findings

The findings of this review demonstrate that corporate disclosure research is based on four broad themes – the role of disclosure in capital markets, non-financial disclosure, determinants of corporate disclosure and firm risk and intellectual capital disclosure. This review suggests that management should pay attention to the financial and non-financial corporate information that investors, regulators and the government emphasise.

Originality/value

This paper is the first comprehensive bibliometric review on corporate disclosure. It summarises the regulatory shifts, technological changes and industry trends that have influenced corporate disclosure research. Besides identifying broad research themes, the authors performed bibliographic coupling for research on disclosure sources, including annual reports, management forecasts, earnings calls, press releases, the Internet and social media, to reveal the thematic clusters related to these sources.

Details

Managerial Finance, vol. 50 no. 4
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 31 March 2023

Nur Laili Ab Ghani, Noraini Mohd Ariffin and Abdul Rahim Abdul Rahman

This study aims to assess the extent of the mandatory and voluntary Shariah compliance disclosure in the Shariah Committee Report of Islamic financial institutions (IFIs) in…

Abstract

Purpose

This study aims to assess the extent of the mandatory and voluntary Shariah compliance disclosure in the Shariah Committee Report of Islamic financial institutions (IFIs) in Malaysia. The study highlights the accountability and transparency of the Shariah Committee members to provide full disclosure of relevant Shariah compliance information to the stakeholders.

Design/methodology/approach

The study adopts content analysis to quantify and code the number of sentences in the Shariah Committee Report disclosed in the 2016 annual report of 47 IFIs in Malaysia. The extent of Shariah compliance disclosure in the Shariah Committee Report is measured based on the Standard (S) and Guidance (G) items outlined in the Shariah Governance Framework (SGF) as well as the Financial Reporting for Islamic Banking Institutions and takaful operators guidelines issued by Bank Negara Malaysia (BNM) as the reference.

Findings

The findings indicate that majority of IFIs complied with the minimum mandatory disclosure requirement based on the Standard (S) items in the Shariah Committee Report as required by the SGF. Highest information on the purpose of Shariah Committee engagement and scope of work performed is disclosed to the stakeholders in almost all IFIs. Only two prominent full-fledged Islamic bank and Islamic banking business in development financial institutions have shown highest accountability to go beyond the minimum disclosure requirement. This includes disclosing higher voluntary information on Shariah governance processes in the Shariah Committee Report of these two IFIs.

Research limitations/implications

This study adopts the SGF (Bank Negara Malaysia, 2010), Financial Reporting for Islamic Banking Institutions (Bank Negara Malaysia, 2016) and Financial Reporting for Takaful Operators (Bank Negara Malaysia, 2015) as the reference to develop the measurement of Shariah compliance disclosure in the Shariah Committee Report. These guidelines issued by BNM are still effective during the period of study, i.e. the year 2016.

Practical implications

The findings contribute towards the relevance for BNM as the regulator to enhance the current disclosure requirement in the Shariah Committee Report as stated in the SGF especially in Islamic windows and takaful operators. The main argument of this paper is that the more information being disclosed in the Shariah Committee Report will lead to better Shariah assurances. The issuance of Shariah Governance Policy Document in 2019 is expected to enhance the credibility, accountability and transparency of the Shariah Committee members concerning their oversight responsibility towards Shariah matters in IFIs’ business operations.

Originality/value

After five years since the issuance of the SGF in 2010, further study on the extent of mandatory and voluntary Shariah compliance disclosure is important to highlight the accountability and transparency on the implementation of the Shariah governance across various types of IFIs in Malaysia.

Details

Journal of Islamic Accounting and Business Research, vol. 15 no. 3
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 14 November 2023

Masah Alomari and Ibrahim Aladi

Financial inclusion is considered one of the strategic tools for sustainable development and one of the types of corporate social responsibility disclosures. This study aims to…

Abstract

Purpose

Financial inclusion is considered one of the strategic tools for sustainable development and one of the types of corporate social responsibility disclosures. This study aims to focus on the association between the disclosure of financial inclusion activities and Syrian banking companies’ performance.

Design/methodology/approach

Different regression models were suggested to examine the hypotheses leading to a better understanding of the relationship between financial inclusion and Syrian banking performance for the period 2005 to 2020 using the STATA 17.

Findings

The results showed a positive association between financial inclusion disclosure and Syrian bank performance, with low participation in financial inclusion activities (8%).

Research limitations/implications

The study recommends that the Central Bank of Syria work on developing an index of financial inclusion for the Syrian environment, with the issuance of legislation and laws that obligate all listed banks to disclose their financial inclusion activities as a part of their social responsibility.

Originality/value

This study incorporates the relationship between the disclosure of financial inclusion activities and the performance of Syrian banking companies, which has been neglected by most studies on financial inclusion. Therefore, this study sheds light on this positive relationship, which could have important repercussions in reviving the deteriorating Syrian economy following the crisis it went through, which, in turn, led to Syria’s high inflation affecting the poor and vulnerable disproportionately.

Details

Journal of Financial Economic Policy, vol. 16 no. 1
Type: Research Article
ISSN: 1757-6385

Keywords

Open Access
Article
Publication date: 18 December 2023

Franz Eduard Toerien and Elda du Toit

The purpose of this study is to evaluate whether the amendments to International Accounting Standard (IAS) 39 and the introduction of International Financial Reporting Standards…

Abstract

Purpose

The purpose of this study is to evaluate whether the amendments to International Accounting Standard (IAS) 39 and the introduction of International Financial Reporting Standards (IFRS) 9 enhanced the readability, and thus the quality and usefulness of risk disclosure information.

Design/methodology/approach

Readability analyses are performed on companies listed on the Johannesburg Stock Exchange (JSE) from 2005 to 2021. The sample period includes the period when companies disclosed information according to IAS 39 (2005–2017) and IFRS 9 (2018–2021).

Findings

The results of the analyses show risk disclosures for JSE-listed companies to be complex and difficult to understand. Furthermore, risk disclosures have become longer and less readable with the introduction of amendments to IAS 39 and the introduction of IFRS 9.

Research limitations/implications

This study uses readability measures as a proxy for the complexity and usefulness of risk disclosures. The amount of utility a user of financial statements derives could be dependent on other factors such as the quality of disclosure, individual user background and perceptions.

Practical implications

The results have valuable implications for the various stakeholders that make use of the information contained in financial statements. Stakeholders such as regulators and standard setters should carefully assess how accounting standards change to ensure that one of the key objectives of the IASB, namely, to provide information that is relevant, reliable and understandable, is met.

Originality/value

The results of this study contribute to the discourse on the usefulness of companies’ risk disclosures. Though, to the best of the authors’ knowledge, this is the first study to compare the readability of risk disclosures from an emerging market perspective, the results can be applied to other countries using IFRS to assess the readability of risk disclosures.

Details

Accounting Research Journal, vol. 37 no. 1
Type: Research Article
ISSN: 1030-9616

Keywords

Article
Publication date: 26 March 2024

Santi Gopal Maji and Prachi Lohia

This study aims to investigate the influence of disclosing environmental, social and governance (ESG) factors on financial performance, taking into account the moderating effect…

Abstract

Purpose

This study aims to investigate the influence of disclosing environmental, social and governance (ESG) factors on financial performance, taking into account the moderating effect of the COVID-19 pandemic.

Design/methodology/approach

A sample of the top 100 non-financial firms listed on the Bombay Stock Exchange, for the years 2019–2022, has been considered. Suitable panel regression models have been used to assess the impact of non-financial disclosure on accounting and market measures of firm performance. In addition, a panel data moderating effect model is used to assess the moderating impact.

Findings

The outcomes of the study partially favour the value-creation role of ESG disclosure. Specifically, the disclosure of already established ESG metrics, particularly social and governance aspects, positively impacts the market performance while environmental transparency negatively impacts the accounting performance. Of the three ESG components, only extended governance disclosure adds to market value. Results of the moderation effect reveal a significant impact of the pandemic on the ESG disclosure–financial performance relation. However, a more pronounced effect before the pandemic is observed. The results are robust to endogeneity.

Originality/value

This study sheds light on the financial consequences of ESG disclosure within the context of an emerging nation. This is done by using a novel holistic ESG reporting framework to obtain more accurate results. Furthermore, the study distinguishes itself by examining the long-term moderating influence of the unexpected COVID-19 crisis on the ESG disclosure–financial performance relation.

Details

Journal of Indian Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1755-4195

Keywords

Article
Publication date: 6 February 2024

Md Rezaul Karim, Mohammed Moin Uddin Reza and Samia Afrin Shetu

This study aims to explore COVID-19-related accounting disclosures using sociological disclosure analysis (SDA) within the context of the developing economy of Bangladesh.

Abstract

Purpose

This study aims to explore COVID-19-related accounting disclosures using sociological disclosure analysis (SDA) within the context of the developing economy of Bangladesh.

Design/methodology/approach

COVID-19-related accounting disclosures from listed banks’ annual reports have been examined using three levels of SDA: textual, contextual and sociological interpretations. Data were gathered from the banks’ 2019 and 2020 annual reports. The study uses the legitimacy theory as its theoretical framework.

Findings

The research reveals a substantial shift in corporate disclosures due to COVID-19, marked by a significant increase from 2019 to 2020. Despite regulatory and professional directives for COVID-19-specific disclosures, notable non-compliance is evident in subsequent events, going concern, fair value, financial instruments and more. Instead of assessing the implications of COVID-19 and making disclosures, companies used positive, vague and subjective wording to legitimize non-disclosure.

Practical implications

The study’s insights can inform regulators and policymakers in crafting effective guidelines for future crisis-related reporting like COVID-19. The research adds to the literature by methodologically using SDA to explore pandemic-specific disclosures, uncovering the interplay between disclosures, legitimacy and stakeholder engagement.

Originality/value

This study represents a pioneering effort in investigating COVID-19-specific disclosures. Moreover, it uses the SDA methodology along with the legitimacy theory to analyze accounting disclosures associated with COVID-19.

Details

Accounting Research Journal, vol. 37 no. 1
Type: Research Article
ISSN: 1030-9616

Keywords

Article
Publication date: 15 December 2023

Adam Arian and John Stephen Sands

This study aims to evaluate the adequacy of climate risk disclosure by providing empirical evidence on whether corporate disclosure meets rising stakeholders’ demand for risk…

Abstract

Purpose

This study aims to evaluate the adequacy of climate risk disclosure by providing empirical evidence on whether corporate disclosure meets rising stakeholders’ demand for risk disclosure concerning climate change.

Design/methodology/approach

Drawing on a triangulated approach for collecting data from multiple sources in a longitudinal study, we perform a panel regression analysis on a sample of multinational firms between 2007 and 2021. Inspired by the Global Reporting Initiative (GRI) principles, our innovative and inclusive model of measuring firm-level climate risks underscores the urgent need to redefine materiality from a broader value creation (rather than only financial) perspective, including the impact on sustainable development.

Findings

The findings of this study provide evidence of limited corporate climate risk disclosure, indicating that organisations have yet to accept the reality of climate-related risks. An additional finding supports the existence of a nexus between higher corporate environmental disclosure and higher corporate resilience to material financial and environmental risks, rather than pervasive sustainability risk disclosure.

Practical implications

We argue that a mechanical process for climate-related risk disclosure can limit related disclosure variability, risk reporting priority selection, thereby broadening the short-term perspective on financial materiality assessment for disclosure.

Social implications

This study extends recent literature on the adequacy of corporate risk disclosure, highlighting the importance of disclosing material sustainability risks from the perspectives of different stakeholder groups for long-term success. Corporate management should place climate-related risks at the centre of their disclosure strategies. We argue that reducing the systematic underestimation of climate-related risks and variations in their disclosure practices may require regulations that enhance corporate perceptions and responses to these risks.

Originality/value

This study emphasises the importance of reconceptualising materiality from a multidimensional value creation standpoint, encapsulating financial and sustainable development considerations. This novel model of assessing firm-level climate risk, based on the GRI principles, underscores the necessity of developing a more comprehensive approach to evaluating materiality.

Details

Sustainability Accounting, Management and Policy Journal, vol. 15 no. 2
Type: Research Article
ISSN: 2040-8021

Keywords

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