The Influence of Audit Committee Characteristics on Voluntary Disclosure of Annual Financial Reports in Jordan (original) (raw)
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Audit Committee Attributes, Corporate Governance and Voluntary Disclosure: Evidence from Jordan
International Journal of Academic Research in Accounting, Finance and Management Sciences, 2020
This study examines the impact of audit committee attributes, corporate governance on voluntary disclosure of the non-financial firms listed on Amman stock exchange, the sample size consists of 72 listed firms covered the time period 2013-2016. Voluntary disclosure was measured using the relative disclosure index ratio. Multiple regression techniques were employed to test the study hypotheses, the results show that audit committee independence and audit committee meetings frequency have a significant positive impact on the level of voluntary disclosure, the results also revealed that independent board members and foreign ownership have a significant positive impact on the level of voluntary disclosure, however, family control exerts a negative significant impact on the level of voluntary disclosure. The findings of this study may have policy implications for the Jordanian corporate governance regulators as well as to regulators in the developing countries.
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Procedia - Social and Behavioral Sciences, 2014
The purpose of this study is to investigate the influence of audit committee characteristics on corporate voluntary disclosure of 146 Malaysian listed firms for the year 2009. Based on content analysis of disclosure, the empirical results of multiple regressions reveal that audit committee independence, size and multiple directorships of audit committee members are positively associated with corporate voluntary disclosure. Frequency of meetings and financial expertise of audit committee members are not significantly associated with corporate voluntary disclosure. The results offer evidence to policy makers, investors and accounting professionals on the extent to which audit committee characteristics associated with such committee effectiveness in monitoring corporate reporting processes.
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This main objective of this study is to examine the impact of a number of variables on the extent of corporate governance disclosure in a firm's annual report. The study analyzes the impact of different variables, including Size of audited company, the existence of audit committee, size of board of directors, number of non-executive members in the board of directors, separated between chairman of board of director and CEO, complexity of firm's operations, size of company, debt ratio, profitability, ownership concentration and the institutional shareholders) on this level of Disclosure of corporate governance. A disclosure index consisting of thirty-seven items of information covering corporate governance was applied to the annual reports of a sample of 64 companies listed on the Amman Stock Exchange for the year 2010. The index is divided into two types of information: compulsory and voluntary. Regression analysis is used to examine the relationship between the extent of disclosure and the explanatory variables. The results of the study revealed that the disclosure level of compulsory items was high and there was no significant variations in the disclosure level between companies. On the other hand, the results indicated that the disclosure level of voluntary items was low and there was a significant variation between companies. The results of multiple regression analysis revealed that there is a positive and significant relationship between the level of corporate governance disclosure and the existence of audit committee, and the separated between the positions of chairman of board of director and CEO. Also, the study found a negative and significant relationship between the level of corporate governance disclosure and the number of non-executive directors in the board of directors. Finally, the study recommended the conduct of future research that may cover other aspects of the topic and incorporate new variables not covered by the current study.
International Journal of Academic Research in Accounting, Finance and Management Sciences, 2018
Corporate governance has become common issues and the numbers of issues have increase gradually since the last two decades. Good corporate governance plays crucial part in developing better linkages in the organization which includes the vital role in the organization such as board members, managers, stakeholders and stockholders. Good practices of corporate governance not only can be seen in well-developed and business-oriented, but it also will promote organization events and enhance organization abilities in accessing all the sources. Besides, this practice will encourage organization in developing the values of business and systems controlled in facing any risk during the process of creating better organization. In achieving status of good status of corporate governance, a good organization should have good practices in the governance and disclosure also broad knowledge it is crucial elements for successful organization in the world. However, most of Arab Saudi listed companies have the foundation of good governance knowledge and this practice is one of the best elements for increasing and maintaining organization efficiency especially Index listed company. Nevertheless, previous studies on corporate governance always highlighted on controversial results on corporate governance impacts on the efficiency of company. However, this paper will be highlighted on factors that contribute corporate governance which include committees of board audit, the size of audit, independence, compensation and the frequency of meeting. On top of that, the result of this study will offer more suggestions for further research on the linkages between corporate governance and company also Saudi listed company disclosure in Saudi Arabia context. In aligned on the results, it will offer the implications on authority regulators, policymakers and shareholders with effective implication of best practices and information disclosure on corporate governance.
Corporate Ownership and Control, 2012
This study aims to understand the features of an effective audit committee and its role in strengthening financial reporting. A questionnaire based survey was circulated to public listed companies on the Amman Stock Exchange (Banking, insurance, and financial institutions). The study was aimed at internal audit managers and finance managers. Out of 156 questionnaires, we received 110 back which represents a 71% response rate. The study results show that the research respondents have a good level of education and experience. In addition, there is a relationship between internal controls, international standards on auditing, institute of internal audit; Jordan securities commission requirements, external audit, understanding of audit committee functions, and financial reporting. Further more, the internal control, international standard on auditing and institute of internal audit, Jordan securities commission requirements, External audit, understanding of audit committee functions can explain a significant amount of the variability in financial reporting. Finally, the research results also show that age and gender make a difference for our respondents when they evaluate financial reporting. The study like other cross sectional studies is not free of limitations. Managerial implications and new avenues of future research are supplied. Future research also can borrow the research model and apply a longitudinal study to solve the cross sectional study problems.
Impact of Audit Committee Characteristics on Voluntary Disclosures: Evidence from Pakistan
Asian Journal of Economics and Empirical Research, 2019
This paper examines the effect of characteristics of audit committee on voluntary disclosure levels. This topic has been given much importance by the researchers, because independent audit plays crucial role in protecting minority shareholder's interest. The study uses a sample of one hundred fifty companies which are listed on Pakistan Stock Exchange. Studying this sample is tremendously important because of several reasons. Regulatory bodies of Pakistan are pushing companies to implement the code of corporate governance. We have used multiple regression analysis technique to analyze the effect of characteristics of audit committee on voluntary disclosure. The scores of voluntary disclosure has been considered as dependent variable and independence of audit committee, committee member's financial expertise, committee meetings frequency and committee size were used as independent variables. A checklist of 64 discretionary items was adapted to measure the voluntary disclosure in-lined with the existing literature. We have considered firm's size, its profitability and leverage as control variables. The results suggest that size and independence of audit committee members have statistically significant effect on voluntary disclosure while, other independent variables do not have any significant effect. The existing literature reports different findings for these variables. Policy makers may further strengthen disclosure framework, which may be helpful in meeting the expectation of investors using the findings of this study.
The Impact of Audit Committee Performance and Composition on Financial Reporting Quality in Jordan
International Journal of Financial Research, 2021
The corporate governance literature indicates efforts to investigate the role of the audit committee (AC) in improving the financial reporting quality (FRQ) after the emergence of financial scandals in many countries in the world, inclusive Jordan. To date, empirical findings are inconclusive enough to address all audit committee characteristics regarding its competency and responsibilities by employing a questionnaire to collect data about this relationship. Thus, this study measures the correlation between AC (performance and composition) and FRQ of manufacturing corporations registered on the Amman Stock Exchange (ASE). To test this impact empirically, the target population was financial managers, audit committee members, and internal audit managers who are working in manufacturing corporations listed on the (ASE). According to the coefficient (β), the independent variables (Audit Committee Performance and Audit Committee Composition influence the dependent variable FRQ. This res...
Universal Journal of Accounting and Finance, 2021
The objective of the present research is to examine the relationship between corporate governance and voluntary disclosure, and to determine how certain factors enhance governance practices and consequently increase voluntary disclosure. The study considers the content analysis of 22 Saudi listed companies from 2015 to 2019. A comprehensive index is developed, with a check-list covering 30 items to extract and measure corporate governance practices and levels of voluntary disclosure. The researchers use ordinary least squares (OLS) regression to examine whether corporate governance-specific mechanisms can explain any differences in voluntary disclosure levels among the listed companies. The results indicate a statistically significant relationship between the number of non-executive directors and board size and the level of voluntary disclosure. This study concluded that non-executive directors and board size are ranked the highest in terms of their positive effects on voluntary disclosure. The relationship between the independent directors and audit committees and voluntary disclosure is insignificant. The results suggest that the high number of non-executive directors and the increase in the number of directors on the boards lead to greater voluntary disclosure of information. This study helps regulators of corporate governance and company directors understand the factors affecting voluntary disclosure. Corporate governance regulators should require an increase in the minimum number of boards and non-executive directors for listed companies in order to gain the desired levels of voluntary disclosure and transparency. Saudi listed companies are advised to willingly increase their board members to the maximum number specified by regulation. This study has some limitations as participants represented a small sample; hence, the results cannot be generalised. Furthermore, the voluntary disclosure data were collected only from annual reports; sources such as websites, public announcements and press releases, were not taken into account, but would have provided many relevant details.
Accounting thought Journal, 2015
Banks in Egypt have unique characteristics that makes its micro economic role vital in the macro economy throughout their financial performance impact on the investors’ decisions in the capital exchange market. The research investigates assesses, and discusses the appropriate disclosure attributes of banks, and disclosure attributes impact of corporate governance, audit quality, along with the voluntary disclosure attributes on the financial performance of the Islamic and non-Islamic banks in the Egyptian exchange market through an empirical research applied on banks listed in the stock exchange market. The corporate governance disclosure attributes presented by the research included Audit committee dimensions: Audit committee size, AC autonomy, AC meetings, Board size, Board independence, Managerial ownership, and other prominent variables. The audit quality disclosure attributes addressed by the research divided into two sub-categories, Auditing firms determinates and Audit process determinates. The attributes used to measure the level of voluntary disclosure includes, Internet reporting, brief history of the bank, directors skills and experiences, environment protection programs and other variables. The financial performance of banks are measured through the price earnings ratio, return on total assets, total asset growth, net profit growth and EPS ratio calculated based on the annals of the annual reports of the selected banks. The research uses the secondary data from the annual reports of the banks, and the disclosure books brought from the websites of the banks or purchased through Egypt for Information Dissemination Company. The research will cover a period starting from 2004 until 2014 (according to the availability of the data and the date of registration of the banks in the stock market) along 12 banks listed in the Egyptian stock market. The sample of the 12 banks included 3 Islamic banks and 9 non-Islamic banks. The research results supported the hypothesis of the research that the corporate governance, audit quality and voluntary disclosure have an impact on the financial performance of the Islamic and the non-Islamic banks with different level of significance. The empirical study of this research has been conducted using the SPSS package along with other statistical techniques to verify the hypotheses. The results of the research may have some important implications for enhancing the disclosure attributes of the Islamic banks and non-Islamic banks, which will lead to better financial performance for both categories of banks.
Corporate Governance Mechanisms and Voluntary Disclosure Compliance: The Case of Banks in Jordan
The current study comes to discuss the role of Central Bank in developing the corporate governance best practices in Jordanian banks. In addition, the study focuses on investigating the extent to which Jordanian banks are comply with the corporate governance code for banks in Jordan as outlined by Central Bank in 2007. Furthermore, it investigates the extent to which banks comply with the corporate governance code for banks in Jordan in transparency and disclosure. Based on the annual financial reports of 13 banks listed in Amman Stock Exchange (ASE) for 2012, the results indicated that the overall compliance with corporate governance code for banks in Jordan is 90.9%. The results show that the lower compliance is concentrated in audit committee as only 70.5% of the banks do comply with its rules as outlined in corporate governance code for banks. The expected reasons for such low compliance were discussed in the current study. The compliance rate with board of directors' rules and general corporate governance information is 90.9% and 100% respectively. After computing the voluntary disclosure index, the results show that the average disclosure score is 61.3%, which is unsatisfactory. Apart from employee information, the results show high consistency in disclosure practices among Jordanian banks. The unsatisfactory percentage of disclosure implies that there are several factors may hinder banks from disclosing some sensitive information. The findings of the study have many applications for decision makers in Jordan and other developing countries.