The Influence of Audit Committee Characteristics on Voluntary Disclosure of Annual Financial Reports in Jordan

Ala Hussein Albawwat

doi:10.13189/ujaf.2022.100117

Abstract

This study examines the influence of audit committee characteristics on voluntary disclosure of non-financial firms considering the context of Amman stock exchange (ASE). As a result, a total number of 140 firms were annually considered as study samples between 2015 and 2019 making up to 4 years reports. To measure the impacts of audit committee on information of voluntary disclosure, a number of hypotheses were tested from selected firms listed in Jordan. On the test for hypotheses, a descriptive analysis was carried out followed by the model of multiple regressions. The outcome from the findings in this study however indicated a positive relationship between the factors of independent audit committee, the sizes, the multiple directorships of members of audit committee and the corporate voluntary disclosure. The rate at which meetings were held by financial expertise and members of audit committee was observed to be associated significantly with the corporate voluntary disclosure. The results further revealed a strong significance difference between investors in accounting sector and policy makers and the accuracy of monitoring the process of corporate reporting. The current research however projected foresight ideas to improve corporate governance of Jordan and other developing countries with the tendency of imposing reliable regulation bodies.

Highlights

The annual process of an accurate financial statement is subjected to a certain number of accounting principles with the aim of achieving an ideal report capable to bring about good economic and financial structure to the stakeholders and this is expected to as well project better image of the firms [52]
Analysis of multiple regression was adopted and the findings indicated that, factors of indecency nature of audit committee, the size of audit committee together with multiple directorships of members of audit committee had positive influence on the frequency of disclosing corporate voluntarily, on the other hand members of financial experts and frequency of meetings held did not have any significant difference with the corporate voluntary disclosure
From the observed data values, firms were able to disclose 15 out of 21 voluntary items of strategic information on average, for non-financial information (NFI) it was 7 out of voluntary items and lastly for financial information, 9 out of voluntary items were considered within the chosen period for the research

Summary

Introduction

The annual process of an accurate financial statement is subjected to a certain number of accounting principles with the aim of achieving an ideal report capable to bring about good economic and financial structure to the stakeholders and this is expected to as well project better image of the firms [52]. The financial report on yearly basis had the ability to contain information that is crucial in improving a particular firm. The cumulative effect was further observed to eradicate unnecessary cost by the agency which can be as a result of asymmetry information in line with the stakeholders and managers. For this reason, quiet a number of researches were evaluated [2] to address how crucial the voluntary disclosure is in financial sectors around the world. The work of Albawwat et al [4] signified how

Methods

Results

Conclusion