Abstract
This study examines the determinants of corporate disclosure level of listed companies in Nigeria. Specifically, the study investigates the relationship between two structure characteristics and corporate disclosure in Nigerian listed firms. The data used in the study were obtained from the annual reports of 60 companies listed on the Nigerian Stock Exchange from the various sectors of the Nigerian economy. The study covers the post International Financial Reporting Standards (IFRSs) adoption period of three years (2012 â 2014). The structure characteristics (independent variables) are firm size and leverage. Corporate disclosure (dependent variable) was disaggregated into mandatory, voluntary and total disclosure. The data were analysed using both descriptive statistics and the Ordinary Least Squares (OLS) regression. Findings from the descriptive statistics reveal that contrary to prior findings, there is a steady improvement in mandatory disclosure by Nigerian companies since the countryâs adoption of IFRSs. However, voluntary disclosure still remains relatively low.Our empirical results show a significant positive association between firm size and mandatory disclosure. The results also reveal a significant negative relationship between leverage and mandatory disclosure. Both leverage and firm size showed a significant positive relationship with voluntary disclosure. The combined effect of leverage and firm size show a significant positive relationship with total disclosure. Based on these findings, we recommend that the Financial Reporting Council of Nigeria and other regulatory agencies should intensify efforts towards enforcement of companiesâ compliance with the requirements of IFRSs and other relevant statutory provisions.
Highlights
Global corporate accounting scandals like Waste Management in 1998, Enron in 2001, WorldCom in 2002, Tyco in 2002, HealthSouth in 2003, Freddie Mac in 2003, American Insurance in 2005, Lenman Brothers in 2008, Saytam in 2009, Banco Espirito Santo (BES) in 2014, Toshiba in 2015 and Turing Pharmaceutical in 2015, have raised serious concerns about corporate reporting globally
Oversight Board (PCAOB); improvements in accounting and auditing standards; prescription of serious sanctions for violation of regulatory requirements; and the international cooperation among professional accounting bodies, corporate managers have continued to devise newer means of subverting the systems. These scandals as well as the continuous breaches by chief executive officers (CEOs) and chief financial officers (CFOs) have led to the increasing demand for more transparent disclosure by companies across the globe with a view to sufficiently make the operations of public companies more visible to the multiplicity of users of corporate reports
The use Ordinary Least Squares (OLS) is a simple way to examine the sensitivity of the results to alternative specifications [10] and allows for greater flexibility in modelling differences in sample specific behaviour [22]
Summary
Global corporate accounting scandals like Waste Management in 1998, Enron in 2001, WorldCom in 2002, Tyco in 2002, HealthSouth in 2003, Freddie Mac in 2003, American Insurance in 2005, Lenman Brothers in 2008, Saytam in 2009, Banco Espirito Santo (BES) in 2014, Toshiba in 2015 and Turing Pharmaceutical in 2015, have raised serious concerns about corporate reporting globally. Oversight Board (PCAOB); improvements in accounting and auditing standards; prescription of serious sanctions for violation of regulatory requirements; and the international cooperation among professional accounting bodies, corporate managers have continued to devise newer means of subverting the systems. These scandals as well as the continuous breaches by CEOs and CFOs have led to the increasing demand for more transparent disclosure by companies across the globe with a view to sufficiently make the operations of public companies more visible to the multiplicity of users of corporate reports. This continuous demand for credible corporate reports by stakeholders is occasioned by the primacy of corporate report as a principal tool for the communication of information to external users, assessment of economic performance and condition of an enterprise in order to monitor management’s actions and enhance the quality of decision making [30]
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