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Article
Publication date: 1 January 2005

Saeed Askary and Beverley Jackling

This paper investigates the financial disclosure practices of corporate annual reports published in Asian countries including Bangladesh, Indonesian, Malaysia and the Middle East…

Abstract

This paper investigates the financial disclosure practices of corporate annual reports published in Asian countries including Bangladesh, Indonesian, Malaysia and the Middle East countries including Bahrain, Iran, Jordan, Kuwait, Oman, Pakistan, Qatar, Saudi Arabia and Turkey. The purpose of the study is to measure the financial disclosure diversity in these countries, with a view to developing a classification of their similarities and differences in respect to their compliance with International Accounting Standards (IAS). Annual reports of 126 public companies liisted on the countries' stock exchanges are the central data source, supplemented with other relevant information about financial disclosure practices in each country. A disclosure checklist adopted from all IASs and summarised in 306 individual items of financial disclosures is used as a means of extending an understanding of financial reporting in these countries. Results show the relative degree of conformity with IASs for each of the countries included in this study.

Details

Asian Review of Accounting, vol. 13 no. 1
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 28 January 2022

Talie Kassamany, Etienne Harb, Wael Louhichi and Mayssam Nasr

This paper aims to investigate the impact of risk disclosure practices (voluntary, mandatory and risk disclosure index) on stock return volatility, market liquidity and financial

Abstract

Purpose

This paper aims to investigate the impact of risk disclosure practices (voluntary, mandatory and risk disclosure index) on stock return volatility, market liquidity and financial performance for insurance companies in the UK and Canada, before and after the International Financial Reporting Standards (IFRS) adoption.

Design/methodology/approach

The panel data analysis covers 14 insurance companies in the UK and 12 in Canada over a six-year period, three years before and three years after the implementation of IFRS. The authors collected risk disclosure data manually from the annual reports and analyzed it through QSR NVivo software for each country. The other variables are secondary data collected from Thomson Reuters Eikon and Datastream.

Findings

The results reveal that mandatory risk disclosure practices positively influence stock return volatility for UK insurers but not Canadian ones. Moreover, both mandatory and voluntary risk disclosures increase market liquidity for UK insurers. The outcomes also show a negative influence of risk disclosure practices on financial performance for both the UK and Canadian insurers. The adoption of IFRS enhances the impact of risk disclosure practices in both countries on market liquidity and financial performance.

Research limitations/implications

The findings rationalize the impact of risk disclosure practices on volatility, liquidity and financial performance of UK and Canada insurers, and the effect of IFRS in triggering those results.

Practical implications

The findings highlight the diverse effects of voluntary and mandatory risk disclosure practices in enhancing market discipline and mitigating information asymmetry problems to investors. Regulators and policymakers could rely on the findings to amend and develop disclosure standards more frequently to assure their effectiveness. The authors also offer insights to managers to determine the levels of mandatory and voluntary disclosure practices and disclosure strategies to gain their stakeholders’ confidence.

Originality/value

This study contributes to the literature of risk disclosure in the insurance industry for both the UK and Canada where scarce studies are conducted. It also offers interesting implementations to investors, managers and policymakers.

Details

Competitiveness Review: An International Business Journal , vol. 33 no. 1
Type: Research Article
ISSN: 1059-5422

Keywords

Article
Publication date: 19 March 2018

Annachiara Longoni and Raffaella Cagliano

Little empirical work has been done on the effects of inclusive environmental disclosure and green supply chain management (GSCM) on firm outcomes. The literature on environmental…

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Abstract

Purpose

Little empirical work has been done on the effects of inclusive environmental disclosure and green supply chain management (GSCM) on firm outcomes. The literature on environmental disclosure suggests that it is a useful practice to improve a firm’s reputation and its financial performance and also to establish a dialogue with stakeholders improving environmental performance. Recent conceptual contributions in the supply chain management literature state that stakeholder expectations and informational needs increasingly concern firm supply chains. Thus, the authors propose that positive effects of inclusive environmental disclosure practices are enhanced in presence of GSCM practices. The paper aims to discuss these issues.

Design/methodology/approach

To test these relationships a combination of primary data on environmental disclosure practices, GSCM practices and environmental performance, and secondary data on financial performance was used. A series of hierarchical regression models were performed to test the disclosure-outcome relationships and the moderation of GSCM practices.

Findings

Results provide empirical support for the impact of inclusive environmental disclosure practices on financial performance but no support for the impact on environmental performance. Specifically, the more inclusive the environmental disclosure practices the greater and positive is the impact on financial performance in presence of GSCM practices.

Originality/value

This study provides empirical evidence of the joint effects of inclusive environmental disclosure and GSCM practices on environmental and financial performance. Doing so, it reinforces the recent conceptual foundation that firms should align and leverage on supply chain management for disclosure practice effectiveness.

Details

International Journal of Operations & Production Management, vol. 38 no. 9
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 19 December 2023

Zahra Borghei, Martina Linnenluecke and Binh Bui

This paper aims to explore current trends in how companies disclose climate-related risks and opportunities in their financial statements. As part of the authors’ analysis, they…

Abstract

Purpose

This paper aims to explore current trends in how companies disclose climate-related risks and opportunities in their financial statements. As part of the authors’ analysis, they examine: whether forward-looking assumptions and judgements are typically considered in reporting climate-related risks/opportunities; whether there are differences in the reporting practices of firms in carbon-intensive industries versus non-carbon-intensive industries; and whether negative media reports have an influence on the levels of disclosure a firm makes.

Design/methodology/approach

The authors chose content analysis as their methodology and examined the financial statements published by firms listed on the UK’s FTSE 100 between 2016 and 2020. This analysis is framed by Suchman’s three dimensions of legitimacy, being pragmatic, cognitive and moral.

Findings

Climate-related disclosures in the notes and financial accounts of these firms did increase over the period. Yet, overall, the level the disclosures was inadequate and the quality was inconsistent. From this, the authors conclude that pragmatic legitimacy is not a particularly strong driving factor in compelling organisations to disclose climate-related information. The firms in carbon-intensive industries do provide greater levels of disclosure, including both qualitative and quantitative (monetary) content, which is consistent with cognitive legitimacy. However, from a moral legitimacy perspective, this study finds that firms did not adapt responsively to negative media coverage as a way of reflecting their accountability to broader public norms and values. Overall, this analysis suggests that regulatory enforcement and a systematic reporting framework with adequate guidance is going to be critical to developing transparent climate-related reporting in future.

Originality/value

This paper contributes to existing studies on climate-related disclosures, which have mainly examined the ‘front-half’ of annual reports. Conversely, this study aims to shed light on these practices in the “back-half” of these reports, exploring the underlying reasons for reporting climate-related risks and opportunities in financial accounts. The authors’ insights into the current disclosure practices make a theoretical contribution to the literature. Practitioners can also draw on these insights to improve how they report on climate-related risks and opportunities in their financial statements.

Details

Meditari Accountancy Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 8 May 2017

Arunima Haldar and Mehul Raithatha

This paper aims to examine the impact of corporate governance practices on the level of financial disclosures made by the Indian firms. This assumes importance in the context of…

Abstract

Purpose

This paper aims to examine the impact of corporate governance practices on the level of financial disclosures made by the Indian firms. This assumes importance in the context of the role of financial disclosures in addressing the agency problem.

Design/methodology/approach

Financial disclosure score is computed by considering disclosures provided by the generally accepted accounting principles and is the dependent variable. The independent variable – corporate governance score – is an index comprising internal governance mechanisms. The authors empirically examine the impact of corporate governance practices on financial disclosure using multiple regression model for 200 large listed Indian firms.

Findings

The study suggests that quality of governance practices significantly improves financial disclosure practices of the firm. Particularly, the composition of the audit committee is effective in improving disclosures.

Practical implications

The finding has implications for policy makers and practitioners. It will help investors, lenders, and other stakeholders to assess firms’ financial disclosure quality. In addition, the findings, suggest the influence of governance practices on disclosure, might help in the formulation of appropriate policies about board structure and audit function. It is also a call to investors to emphasize on governance quality of the investing firms.

Originality/value

The study builds a case for an urgent intervention for improving the existing governance standards to advance the quality of financial disclosure in an emerging market context.

Details

International Journal of Organizational Analysis, vol. 25 no. 2
Type: Research Article
ISSN: 1934-8835

Keywords

Article
Publication date: 30 September 2014

Geert Braam and Lex Borghans

The purpose of this study is to explore whether interlock ties between the board of directors and the external auditors facilitate the cross-firm diffusion of voluntary disclosures

1267

Abstract

Purpose

The purpose of this study is to explore whether interlock ties between the board of directors and the external auditors facilitate the cross-firm diffusion of voluntary disclosures in annual reports.

Design/methodology/approach

Using a sample of 149 non-financial companies publicly listed on the New York Stock Exchange (NYSE) Euronext Amsterdam, we use ordinary least squares (OLS) regression analysis to examine the relationships between the incidence of financial and non-financial voluntary disclosures in the focal firms’ annual reports and the annual reports of other companies to which the firms are related via the interlock ties of its board members and external auditor.

Findings

The results show significant associations between financial and non-financial voluntary disclosures in the focal and related firms’ annual reports when there were board interlocks. Differences in the diffusion of specific types of disclosures are found depending on the type of interlocking director. The results also show that interlock ties of the external auditors positively influence the associations with voluntary financial disclosures in the annual reports.

Practical implications

We find clear indications that board and auditor interlocks form important sources of inter-organisational information exchange that can drive changes in voluntary disclosure practices in annual reports. The networks of social relationships between firms may play a significant incremental role in the cross-firm diffusion of corporate voluntary disclosure practices, particularly in complex and ambiguous situations.

Originality/value

This paper is the first empirical study to investigate how board and external auditor interlock ties are related to the levels of financial and non-financial voluntary disclosures in the focal and related firms’ annual reports.

Open Access
Article
Publication date: 14 December 2020

Syed Abdulla Al Mamun and Alima Aktar

The purpose of this study is to investigate the intellectual capital disclosure (ICD) practices of financial institutions in an emerging economy of Bangladesh.

2166

Abstract

Purpose

The purpose of this study is to investigate the intellectual capital disclosure (ICD) practices of financial institutions in an emerging economy of Bangladesh.

Design/methodology/approach

Based on 93 items of intellectual capital categorized into internal capital, external capital and human capital, ICD index is developed for 53 financial institutions listed in Dhaka Stock Exchange. This study uses descriptive statistics to analyze ICD practices, and parametric and non-parametric tests to analyze the variation of ICD practices in terms of different categories as well as in terms of different sectors.

Findings

Results indicate that more than 70% of ICD items are generally not disclosed by financial institutions in Bangladesh. The highest of 36% of external capital disclosure items are disclosed, whereas the lowest of 18% of human resource capital elements are disclosed. Furthermore, results find the significant variability of ICD practices in terms of different intellectual capital categories and in between banking companies and non-banking financial institutions.

Practical implications

Findings have critical implications for managers, policymakers and regulators for setting appropriate strategies and regulations for improving the level of ICD, which, in turn, may reduce the information asymmetry problems of financial institutions as well.

Originality/value

In-depth analysis about variability of ICD practices creates value in the ICD literature by highlighting strategic priority of financial institutions to disclose information about the strategic resources in unique emerging economic settings such as Bangladesh.

Article
Publication date: 8 November 2022

J.-L.W. Mitchell Van der Zahn

To investigate, compare and document the magnitude and extent of intellectual capital disclosure to sustainability disclosure during a transition from a voluntary to mandated…

Abstract

Purpose

To investigate, compare and document the magnitude and extent of intellectual capital disclosure to sustainability disclosure during a transition from a voluntary to mandated “comply or explain” sustainability reporting regime. And to empirically test if, during the regime transition period, changes in the magnitude (extent) of sustainability disclosure is a significant determinant of changes in the magnitude (extent) of intellectual capital disclosure.

Design/methodology/approach

Content analysis of 1,744 annual reports drawn from 436 Singapore listed firms spanning a four-year observation window (i.e. April 1, 2014 to March 31, 2018). The magnitude (number of sentences) and extent (number of items) of (1) intellectual capital disclosure measured using a 38-item index; (2) sustainability disclosure of a 105-item index; and (3) 15-item index to measure the magnitude and extent of joint sustainability/intellectual capital disclosure.

Findings

The average magnitude and extent of sustainability and the joint sustainability/intellectual capital disclosure increased whilst the average magnitude and extent of intellectual capital disclosure increased when regulatory discussion of a change to mandated sustainability reporting emerged. However, in the annual period the mandated sustainability reporting became effective while the average magnitude and extent of intellectual capital disclosure declined. Regression tests indicate a significant (insignificant) association between the change in the magnitude (extent) of sustainability disclosure and intellectual capital disclosure.

Research limitations/implications

From a research perspective, the analysis implies researchers investigating the consequences of mandated sustainability disclosure should consider impact on alternative non-financial disclosure themes and develop theoretical frameworks to derive why and how management may shift non-financial reporting strategies and practices.

Practical implications

For regulators, findings suggest there may be a need to weigh spillover costs of reductions in transparency related to intellectual capital. For investors, declines in the magnitude and extent of intellectual capital disclosure following a transition to mandated sustainability reporting may limit future firm valuation particularly of heavy intangible asset-oriented firms.

Originality/value

Initial study empirically investigating the impact of the transition from a voluntary to mandated sustainability reporting regime on the magnitude and extent of intellectual capital disclosure.

Details

Journal of Applied Accounting Research, vol. 24 no. 3
Type: Research Article
ISSN: 0967-5426

Keywords

Book part
Publication date: 11 November 2014

Helen Kang and Sidney J. Gray

Our aim is to investigate the quality of segment disclosures by companies in Brazil, Russia, India and China (known as the BRIC economies) that are expanding their operations…

Abstract

Purpose

Our aim is to investigate the quality of segment disclosures by companies in Brazil, Russia, India and China (known as the BRIC economies) that are expanding their operations internationally, and in so doing to assess the extent of convergence with globally recognized standards, that is, International Financial Reporting Standards (IFRS).

Methodology

We examine the financial statements and narrative information provided by the largest BRIC companies. We carry out a content analysis and also apply multivariate regression techniques to evaluate if key firm-specific factors are associated with the number of operating and geographic segments disclosed.

Findings

Our results show that the extent of disclosure by the majority of BRIC companies is of a high standard taking into account both quantitative and narrative data. The disclosure of operating segments is commonly based on business lines though most companies also report additional geographic information. As expected, operating segment disclosures are positively associated with the extent of internationalization (percentage of foreign sales) and majority state ownership.

Limitations

We have examined only the largest companies in each BRIC country and so there are limitations regarding the generalizability of our results. Future research could usefully examine the practices of a wider range of companies within each of the BRIC countries. This could also be extended to a study of disclosure behaviour in other emerging economies.

Originality/value

Our study provides new evidence concerning the quality of corporate financial reporting in the BRIC economies with special reference to a comparative international analysis of the segment disclosure practices of major BRIC companies expanding internationally.

Details

Emerging Market Firms in the Global Economy
Type: Book
ISBN: 978-1-78441-066-7

Keywords

Article
Publication date: 5 October 2015

Abdifatah Ahmed Haji

This study aims to examine the role of audit committee attributes in non-financial information releases, with a focus on intellectual capital (IC) disclosures, following…

2940

Abstract

Purpose

This study aims to examine the role of audit committee attributes in non-financial information releases, with a focus on intellectual capital (IC) disclosures, following significant policy changes, mandating the audit committee function in Malaysia. The study argues that, given the changing informational needs of stakeholders and the ongoing discussion on integrated reporting, the role of the audit committee should extend to ensuring the overall quality of corporate reporting.

Design/methodology/approach

The study draws evidence from a sample of leading Malaysian companies based on their market capitalisation over a three-year period (2008-2010), a period subsequent to the recent policy changes. The extent and quality of IC information, as a surrogate of non-financial information, was measured and regressed against several audit committee attributes, such as audit committee size, independence, financial expertise and meetings, controlling the overall governance and firm-specific variables.

Findings

The findings show a strong positive role of the audit committee function in the overall amount of IC information as well as all three subcomponents of IC information (internal, external and human capital). The results are robust to controls for the overall governance and firm-specific attributes as well as different measures of IC information.

Practical implications

The results suggest that the role of the audit committee function extends to non-financial information communication such as IC. Policymakers in Malaysia should, therefore, build on the recent regulatory changes and encourage audit committees to ensure that the overall quality of corporate reporting processes include social, environmental, intellectual as well as financial capital of a firm.

Originality/value

This study considers the role of the audit committee in the wider corporate reporting process – drawing attention to its potential role in the espoused integrated business reporting. It also challenges the taken-for-granted assumption that restricts the role of the audit committee function to the traditional financial reporting process.

Details

Managerial Auditing Journal, vol. 30 no. 8/9
Type: Research Article
ISSN: 0268-6902

Keywords

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