Journal•ISSN: 1741-3591
International Journal of Disclosure and Governance
Springer Science+Business Media
About: International Journal of Disclosure and Governance is an academic journal published by Springer Science+Business Media. The journal publishes majorly in the area(s): Corporate governance & Corporate finance. It has an ISSN identifier of 1741-3591. Over the lifetime, 449 publications have been published receiving 5273 citations.
Papers published on a yearly basis
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TL;DR: In this paper, the authors investigated the relationship between corporate governance characteristics and voluntary disclosure in the annual reports of 170 Kuwaiti companies listed on the Kuwait Stock Exchange in 2007 and found that only the existence of a voluntary audit committee is significantly and positively related to the extent of voluntary disclosure.
Abstract: This study investigates the relationship between corporate governance characteristics and voluntary disclosure in the annual reports of 170 Kuwaiti companies listed on the Kuwait Stock Exchange in 2007. We first identified four major corporate governance characteristics: proportion of non-executive directors to total number of directors on the board; proportion of family members to total number of directors on the board; role duality; and a voluntary audit committee. We then used univariate and multivariate regression analyses to examine the relationship between these characteristics and voluntary disclosure in annual reports. Using a self-disclosure index to measure voluntary disclosure, the average level of voluntary disclosure by sample companies is 19 per cent, indicating some improvement over the sample companies in an earlier study by Al-Shammari (2008), who found 15 per cent voluntary disclosure. This result suggests a trend toward more transparency by Kuwaiti companies. The results indicate that only the existence of a voluntary audit committee is significantly and positively related to the extent of voluntary disclosure. The result is robust with respect to controls for company size, leverage, auditor type and industry memberships. These results indicate the need to improve Kuwaiti market transparency through additional constraints on corporate governance characteristics. It is believed that this result will prove useful to regulators, preparers of financial statements and investors. Specifically, users of accounting information like investors may consult the findings to understand Kuwaiti companies better when diversifying their investment portfolios.
147 citations
TL;DR: In this article, the authors investigated whether culture in general and religion in particular mitigate earnings management using a cross-country data set, and empirical tests based on rank regressions indicate that earnings management is unrelated to both religious affiliation and the degree of religiosity.
Abstract: This study investigates whether culture in general and religion in particular mitigate earnings management. Using a cross-country data set, empirical tests based on rank regressions indicate that earnings management is unrelated to both religious affiliation and the degree of religiosity. In contrast, earnings management is found to be negatively related to the updated Hofstede cultural variable of individualism and positively related to uncertainty avoidance. The results also indicate that the positive impact of the legal environment in mitigating earnings management, documented by Leuz, can no longer be demonstrated after controlling for culture.
119 citations
TL;DR: In this paper, the authors examine specific characteristics of an audit committee that could be associated with the likelihood of earlier voluntary ethics disclosure and find that firms that made earlier voluntary disclosure were likely to have a larger and more independent audit committee and were less likely to engage in fraudulent financial reporting.
Abstract: This paper empirically examines specific characteristics of an audit committee that could be associated with the likelihood of earlier voluntary ethics disclosure. The sample includes firms that were investigated by the Securities Exchange Commission for fraudulent financial reporting before the Sarbanes–Oxley Act's ethics rule became effective, and their matched no-fraud firms. This study finds that the level of voluntary ethics disclosure was very low compared to the current mandatory disclosure. Results based on a logit regression analysis suggest that firms which made earlier voluntary ethics disclosure were likely to have a larger and more independent audit committee that met more often, and were less likely to engage in fraudulent financial reporting. These results should help policy-makers, investors and boards of directors focus on these audit committee characteristics, which could be crucial not only to ethics disclosure, but also to the ethical conduct of a firm. In particular, results regarding size and meeting frequency highlight how to further improve the effectiveness of an audit committee and the quality of an ethics code not only in the United States, but also in other countries. These characteristics may also indicate a firm's propensity to make any voluntary disclosures, and may help to explain the differential quality of current mandatory ethics codes in the United States. Additionally, these results should be useful to global investors who desire to use corporate governance criteria for screening stock investments in countries where there are no ethics-code requirements.
113 citations
TL;DR: In this article, the authors examined the practice of Corporate Social Responsibility (CSR) disclosure in a Saudi Arabian context and developed a set of indices to measure the level of quantity and quality of CSR disclosure.
Abstract: The purpose of this study is to examine the practice of Corporate Social Responsibility (CSR) Disclosure in a Saudi Arabian context. This study has two particular objectives. First, it aims to measure the level of CSR disclosure quantity and quality. Second, it aims to investigate the determinants of CSR disclosure quantity and quality in a Saudi Arabian context. The study examined a sample from Saudi non-financial listed firms covering the period of 2013–2014. In addition, it develops CSR disclosure indices to measure the level of quantity and quality of CSR disclosure. The study found that Saudi Arabian firms provided higher levels of CSR disclosure quantity; however, the quality of the disclosure was relatively low. In addition, the study found that CSR disclosure quantity was positively associated with board size and the size of audit committee. However, it is negatively associated with percentage of governmental ownership and size of remuneration committee. In contrast, the quality of CSR disclosure was positively associated with the board size and the percentage of managerial ownership. However, the study found a negative association with the percentage of independent directors. The results suggest that Saudi Arabia provides higher levels of disclosure with a lower quality. In addition, the levels of CSR disclosure quantity and quality have different drivers.
110 citations
TL;DR: In this article, the authors examine whether firm credit ratings are associated with the quality of internal control over financial reporting and find that firms with low internal control quality are more likely to have lower credit ratings, speculative-grade rating, smaller size, lower profitability, lower cash flows from operating activities, net losses in the current and prior fiscal year, higher income variability and higher leverage than firms compared to firms with high-quality controls.
Abstract: Credit rating is a primary determinant of firm cost of debt capital, capital structure, and hence the range of acceptable investment opportunities. Scant research has been conducted thus far on the relation between internal controls and cost of capital, particularly after the 2002 Sarbanes–Oxley Act. However, academic researchers argue that credit ratings may be affected by internal governance mechanisms instituted by firms and that the quality of internal controls is a potential driver of cost of equity capital. This paper examines whether firm credit ratings is associated with the quality of internal control over financial reporting. Using a sample of firms disclosing internal control weaknesses during November 2003–July 2005, I find that firms with low internal control quality are more likely to have lower credit ratings, speculative-grade rating, smaller size, lower profitability, lower cash flows from operating activities, net losses in the current and prior fiscal year, higher income variability and higher leverage than firms compared to firms with high-quality controls. Further, lower quality controls decrease the likelihood of a firm receiving an investment-grade debt rating; hence, resulting in higher cost of debt financing, lower income and lower overall attractiveness in capital markets for these firms. Finally, results also suggest that corporate governance strength is positively related to internal control quality. Study results should be useful to a wide range of academic and business readers, because it suggests the increasing importance of firm internal controls in financing decisions and cost of capital determination, of investment in proper internal controls and of exploring the various possibilities from instituting high-quality internal controls. Additionally, regulators are advised to take into consideration the potential effect of legislation on firm credit ratings and internal control quality.
78 citations