Abstract
This study examines the impact of corporate governance structures on the levels of compliance with mandatory IFRSs disclosure requirements by companies listed on the Amman Stock Exchange (ASE) as a leading Arab stock exchange. Using a disclosure index derived from mandatory IFRSs disclosure requirements for the fiscal year 2007, this study measures the levels of compliance by a sample of 75 non-financial companies listed on the ASE. This study extends the financial reporting literature and the emerging markets disclosure literature by being one of the first to investigate the influence of corporate governance requirements for best practices on the levels of compliance with mandatory IFRSs disclosure requirements by companies listed on the ASE. Results provide evidence of the lack of influence of corporate governance best practices on the levels of compliance with mandatory IFRSs disclosure requirements as it is not yet part of the cultural values within the Jordanian context. These findings are consistent with the notions of the theoretical foundation employed in this study.
Highlights
The development of corporate governance is a global phenomenon, influenced by legal, cultural, ownership, and other structural differences (Mallin, 2009), but as yet there is no widely accepted paradigm or theoretical foundation in its respect (Tricker, 2009)
Based on the review of the patterns of ownership structure in the scrutinised companies and the availability of ownership structure related data for these companies, this study examines the influence of ownership structure on the levels of compliance with the IFRSs in the Jordanian context using four distinct measures; government ownership, management ownership, private ownership and public ownership
Comparing the findings of this study with those of the most recent study investigating compliance with IFRSs disclosure requirements within the Jordanian context (Al-Akra et al, 2010a), reveals a relative similarity in the minimum (58% compared to 56% in this study), maximum (90% compared to 88% in this study) and the average levels of compliance with IFRSs disclosure requirements (79% compared to 76% in this study)
Summary
The development of corporate governance is a global phenomenon, influenced by legal, cultural, ownership, and other structural differences (Mallin, 2009), but as yet there is no widely accepted paradigm or theoretical foundation in its respect (Tricker, 2009). Its contribution towards enhancing capital market performance in such countries is subject to the extent to which the conditions for robust governance practice are consistent with the existing values, past experiences and the needs of all parties involved in the financial reporting process. It is expected, to be some time before the impact of applying corporate governance can be measured in developing contexts as this needs to develop, and favourable attitudes and belief must be formed as well as efforts being made to develop the human resource capabilities to apply corporate governance requirements for best practice. Concerning the adoption of IFRSs in Jordan, this was stimulated by the open trade agreements with foreign partners in a Corresponding author
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