Average Disclosure Level Research Articles

A Streamline Sustainable Business Performance Reporting Model by an Integrated FinESG Approach

ESG reporting and disclosure enable financial performance by attracting revenues and optimizing managerial decisions. Within this landscape falls the present study that aimed to examine the quality of ESG reporting connected to the financial performance of listed companies. Stratified analysis revealed four groups of companies according to the average value of ROA and ROE indicators, as well as four classes according to the average ESG disclosure score. The analysis of GRI topics and materiality disclosure scores showed an average disclosure level on ESG components, located between a satisfactory and a good level of disclosure. Also, companies were found to be more inclined to disclose data on the sustainability strategy but provided poor and vague information on the business model. The results of comparative clustering analysis based on FinESG reporting and disclosure scores showed that 31.57% of companies maintained their position in the final ranking. Content analysis of sustainability reports by Leximancer, v.5.0 software highlighted that the most salient topic was “employees”, and it revealed correlations between the themes “employees” and “emissions”. The practical implications of the study were found in the promotion of an integrated reporting that best meets the needs of both stakeholders and those of environmental protection and the development of society.

Determinants of risks disclosure in non-financial companies. Evidence from Portuguese capital market

The present study aims to determine the level of disclosure about financial risks in Portuguese non-financial companies and to identify the determinants of the level of disclosure. To carry out this study, the research methodology used was the content analysis of the reports and accounts, for the period 2017, of 40 non-financial companies listed on Euronext Lisbon, using a disclosure index for financial risks, created based on the requirements contained in the International Financial Reporting Standard No. 7 - Financial Instruments: Disclosures. After the content analysis, to identify the determining factors of disclosure level, a linear regression model was built to relate certain characteristics of the companies with the disclosure level presented. It was possible to conclude that the companies under study have an average disclosure level of about 50% of the requirements contained in IFRS 7 and that the size of companies and the concentration of capital significantly and positively influence the level of disclosure about financial risks. Indebtedness was also a determinant factor, but with a negative sign, being an uncommon result in relation to most other studies.

Bank Disclosure Practices in Bangladesh: Exploring the Impact of Corporate Attributes

Disclosure is necessary so that interested parties can make wise decisions. The study aims to establish the level of disclosure and whether different corporate attributes influence it. Each sample bank's disclosure score was calculated using the unweighted disclosure index. Throughout five years, spanning 2016 to 2020, the necessary data were collected from sample banks' annual reports, and several statistical tools were employed to illustrate the study's conclusions. The study's findings report that the average level of disclosure is satisfactory. The ANOVA test was used to establish whether there was a significant difference in the disclosure levels, and the results show a substantial difference in this case. Multiple regression analysis was performed to investigate the effect of various corporate attributes on disclosure levels. The study's consequences showed that although these variables had significant values higher than 0.05, ROE, EPS, CAR, and log number of employees had no significant influence on disclosure levels. However, at the 0.05 significance level, log total assets demonstrate 0.055 significant levels, indicating that LTA considerably influences disclosure levels.

Analisis Tingkat Pengungkapan Laporan Keuangan Pemerintah Daerah di Sumatera

The purpose of this study was to determine the level of financial reporting disclosure of provincial/district/city governments in Sumatra in 2020. The study population was 164 local government financial reports. The sampling technique used is a saturated sampling technique, namely a sampling technique that uses all members of the population as a sample. The data used is secondary data in the form of data and information on financial statements of provincial/district and city governments in Sumatra. This study uses 7 disclosure indicators, with a total of 302 mandatory disclosures. The results show that the level of disclosure in the financial statements of provincial/district and city governments in Sumatra is still low. The average level of disclosure is 54.47%. In future research, it is expected to conduct interviews and observations to identify the factors that cause high and low disclosures in local government financial statements.

Takaful Reporting on IFSB Requirements in Malaysia: Users and Preparers Perspective

Bank Negara Malaysia (2014) mentioned the importance of having meaningful disclosure to protect participants. However, it did not provide details of the elements of meaningful disclosure. There is no specific guidelines or standards of what should be reported and how detailed the items should be reported. Takaful operators have more knowledge in the operational aspect of takaful, compared to the participants. Authorities try to harmonise all the possible variations and gaps between takaful operators (preparers) and participants (users) for the benefit of the industry. Any gap between what is expected to be reported (desirable) and what is actually reported needs to be analysed in order to provide more information relevant to the users and to standardise the disclosure level. By adopting Sulaiman’s (2005) framework, the study determines what users and preparers perceive as meaningful disclosure on the Islamic Financial Services Board (IFSB) standards. The first two objectives of the study are to determine the disclosure perspectives of the two parties while the third objective is to examine if gaps exist between the two stakeholders. Questionnaire was distributed to takaful agents to examine their perception while content analysis was employed to evaluate the actual level of disclosure in takaful operators' websites. The gap analysis was conducted between the desired and actual level of disclosure and found significant differences among all the gaps. Additionally, the average level of disclosure is 44%. It is hoped that the findings will assist authorities in formulating guideline in takaful industry in Malaysia.

Disclosure Level Analysis of Environmental Indicators of ESG Reports of Listed Developers

近年來永續成為全球議題，企業陸續出版ESG（environment, social and governance）或永續報告書，展現永續績效與作為。然而文獻指出，永續報告書的揭露有待加強。本研究分析建設公司ESG報告書環境指標，檢視國內十家上市建設公司的2020永續報告書的揭露，與國外五家優秀建設公司的比較。研究結果顯示，於32個指標中，十家公司平均揭露9個、揭露率29%，揭露程度17%，約為國外五家公司揭露的一半；揭露邊界多在公司辦公室，較少工地資訊，而國外公司於公司及工地資訊都揭露。揭露率不高的原因有：政府以前未強制規定、揭露未有標準，及公司考量費用。ESG報告編製人員需詳讀GRI準則，了解環境指標要求的資料，定期蒐集與分析，以提高環境指標之揭露率。Sustainability has become a global issue in recent years. More companies publish ESG (environment, social and governance) or sustainability reports to show their sustainable performances and actions. However, literature points out that the disclosure of the report needs improvement. This research analyzed the environmental disclosures of sustainability reports of ten domestic listed developers. The results were compared with the disclosures of excellent sustainability reports of five foreign developers. The research results showed that, among the 32 indicators, the ten companies disclosed nine indicators or 29% on average, and the average disclosure level was 17%. These numbers are about half of the disclosures of the foreign companies. The boundary of disclosure was more limited to the company's office buildings and the information of construction jobsites was less addressed. But the information of both office buildings and jobsites was disclosed by the foreign companies. The reasons for low disclosures can be non-mandatory publication of ESG reports, no standards for disclosures, and the company cost of ESG report preparation. The people who prepare ESG reports need to read the GRI requirements, know the required data, regularly collect and analyze them to raise the disclosure rates of environmental indicators.

Empirically Investigating the Disclosure of Nonfinancial Information: A Content Study on Corporations Listed in the Saudi Capital Market

This study empirically assesses the disclosure of nonfinancial information in corporate reporting. In examining the contents of annual and board reports for 50 listed corporations, a coding sheet was developed by combining the two coding sheets of Boshnak and the European Directive 2014/95/EU. All corporations in three sectors—energy, utilities, and materials, which collectively represents 85.51% of the Saudi market capitalization—encompass the sample. Results reveal that employees, community, and products and services information have a moderate disclosure level. In contrast, environmental, customers, and fighting corruption have a low level. The findings also show that nonfinancial disclosure of the selected sectors on average range between 28.85% for the corporations in the material sector to 39.22% for the corporations in utilities sector. The corporations in the energy sector scored, on average, 37.65%. The mean for the entire sample of the ratios of disclosed nonfinancial items is 30.35%. However, the average disclosure level is without substantial improvement since 2012 and 2013, as previously reported The Capital Market Authority (CMA) is recommended to mandate nonfinancial information disclosure. It is a step toward realization aspects of Saudi Vision 2030 concerning with, for instance, protecting environment and other related matters.

Risk Disclosure Patterns among Jordanian Companies: An Exploratory Study during Covid-19 Pandemic

This current exploratory study comes at a critical time to determine the risk disclosure pattern of Jordanian companies during Covid-19 pandemic in response to the request of JSC for Jordanian listed companies to prepare and send disclosure reports include the effect of Covid-19 pandemic on their activities in terms of material events, operational activities and the decisions of board of directors during the period of disclosure suspension extending from March 18, 2020 to May 5, 2020. Based on all the non-financial companies that listed in the first market, the results of the study indicated that the entire study sample (100%) did send the disclosure reports to JSC. In terms of the quality of disclosed risks, extraction process resulted in finding 20 risk items distributed over 5 categories. The results show that the average disclosure level is 65.6%, with the operational category ranked first and followed by investor relation category, financial category, strategic category and finally the market category. Results show that those sectors that were suspended completely during Covid-19 pandemic provided risk disclosures in all categories and vice versa. In addition to the several implications, the study offers many avenues for future study based on the risk disclosure model of the current study.

Value relevance do nível de evidenciação do ativo intangível nas companhias de capital aberto brasileiras

Este trabalho teve como objetivo verificar a influência do nível de evidenciação do ativo intangível (NEAI) na value relevance de companhias de capital aberto brasileiras. A amostra de pesquisa é composta por 75 companhias de capital aberto com intangível superior a zero que compõem a carteira de maio a agosto de 2017 do ÍBRx100 na B3. Para mensurar o nível de evidenciação do ativo intangível foi elaborada uma métrica a partir da NBC TG 04 R4 (2017), composta por 14 itens, enquanto a relação entre o NEAI e a value relevance foi feita mediante regressão múltipla. A coleta de dados ocorreu por meio das notas explicativas integrantes das DFP anuais consolidadas de 2016. Os resultados apontaram um nível de evidenciação médio de 62,93%, sendo discrepante a diferença entre o maior e o menor (91,09%). Em relação à influência do NEAI na value relevance resultou significativa estatisticamente, com um poder explicativo de 38,09%.

Impact of corporate sustainability reporting on firm performance: an empirical examination in Asia

PurposeThe purpose of this paper is to analyse the impact of corporate sustainability reporting on firm performance in four Asian countries – Japan, South Korea, Indonesia and India – and to find out whether there is any significant difference between developed and developing countries of Asia with respect to the impact of such reporting on firm performance.Design/methodology/approachThe study is based on 36 listed nonfinancial companies from Japan, 28 from India, 26 from South Korea and 21 from Indonesia respectively, from 2009 to 2014. Content analysis (binary −0 and 1) is used to calculate the disclosure score of sustainability performance, based on Global Reporting Initiative (GRI) format. The outcome of the content analysis is further used to examine the impact of corporate sustainability reporting on firm performance employing a logistic regression model.FindingsThe study finds that the average level of disclosure is more in the case of Japanese companies (90 per cent), followed by India (88 per cent) and South Korea (85 per cent). On the other hand, the average level of disclosure is only 72 per cent for Indonesian firms. Regression results depict a significant positive association between sustainability reporting and firm’s performance. The study further finds that the relative impact of sustainability reporting on firm performance is more in developed countries than in developing countries of Asia.Originality/valueThis is the first comprehensive study in Asian context to examine the impact of the level of corporate sustainability disclosure on the firm performance by using the logistic regression model. The outcome of this study would not only help the corporate managers but also the policymakers to make a valuable decision, which will eventually contribute to the objectives of sustainable development.

Explicating the Corporate Governance Mechanisms of Shari’ah Compliant Companies

The paper attempts to assess and examine the disclosure of the mechanisms of the corporate governance (CG), namely, board matters, nomination matters, audit matters, remuneration matters, communication matters, and risk management matters, of Shari’ah Compliant Companies (ShCCs) for a six-year period from 2008 until 2013. By using the weighted disclosure analyses approach, CG index was developed. The study examines the annual reports of a sample of 1,122 ShCCs which was selected based on the top 500 firms (by market capitalisation) for 2008 until 2013. In this study, SPSS was applied to assess the CG disclosure. Based on the descriptive analysis, the result indicates a remuneration matters (mean: 0.55) score higher than the other mechanisms; this was followed by audit matters (mean: 0.49). The study also found that, the average disclosure level of ShCCs was relatively low. Hence, the result has important implications for the enhancement of the CG disclosure of ShCC for a wider acceptance and reputation enhancement.

IMPLEMENTATION OF ISLAMIC SOCIAL REPORTING IN ISLAMIC BANKS MALAYSIA

The objectives of this study are (1) to measure the extent to which the Islamic Social Reporting (ISR) is practiced by Islamic banks in Malaysia and (2) to examine the ISR aspect which is most widely disclosed in annual reports. This study used ten Islamic banks in Malaysia as the research sample. The data used were secondary data in the form of information about social activities reported in 2015, 2016, and 2017. The analytical method used was content analysis technique and scoring to assess social activities disclosed in annual reports of the research object. The results showed that the average level of disclosure of the ISR of Malaysian Islamic banks was 32.81%, while the theme that had the highest level of disclosure was society with 10.77%.

Disclosure-based price discrimination by information exchange platforms

Consumers often face a trade off when considering whether to share more information with firms – for example, by letting an app access their list of contacts, location or browsing history. More precise information can help the sellers to make more targeted offers, and can yield multiple relevant offers and lower prices. However, information disclosure can entail costs via identity theft, fraud, extortion, etc. In this paper, we explore this trade-off in a model in which a monopoly platform can gather personal customer information, and offer it to other sellers. The consumers differ relatively to their aversion to information disclosure, and the platform can offer them menus with different disclosure levels. In equilibrium, options featuring greater disclosure levels command a premium, and information about the consumers choosing them is sold to the sellers at a lower price. If we compare scenarios with alternative menus, a greater number of options corresponds to a greater average disclosure level and a greater surplus. If the potential surplus from the induced exchanges is relatively large, equilibrium with a binary menu features levels of the platform’s profit and the surplus close to those achieved with a continuum of offers.

Analisis Tingkat Pengungkapan Akun Persediaan dalam Laporan Keuangan Pemerintah Daerah di Jawa

According to regulation Act No. 15/2004, adequate disclosure is one of the main criteria for the auditors in giving opinion for local government financial statements (LGFS). All accounts composing LGFS must be disclosed adequately. One of the most important accounts is inventory account in the balance sheet. This research aims to analyze whether the level of disclosure of inventory account is in accordance with the requirements of Government Accounting Standards Number 5 (GAS No. 5) on Inventory . This research uses descriptive qualitative approach. Documentation technique was utilized to collect 113 local government financial statements of regencies/cities in Java for fiscal year 2014. To analyze the data, this study employs percentage descriptive techniques. It was found that disclosure level of inventories account on local government financial statements in Java was still low and not in accordance with GAS No 5. Furthermore, there was no difference in the level of inventory disclosure among LGFS with unqualified opinion, qualified opinion, and disclaimer opinion. The average disclosure level of inventories for LGFS in Java amounted to 40,35%, with the highest disclosure level was 80,00% belonged to only two LGFS.

Corporate Sustainability Performance and Financial Performance: Empirical Evidence from Japan and India

Purpose The purpose of this article is to explore the disclosure of corporate sustainability (CS) practices and to examine the association between sustainability performance and financial performance in Asian context considering firms from India and Japan. Design/methodology/approach The present study is based on secondary data collected from annual reports and CS reports of 28 and 35 listed non-financial firms from India and Japan from 2009 to 2014. Content analysis (binary coding system) is employed to calculate the sustainability disclosure score based on Global Reporting Initiatives (GRI) framework. Market-to-book ratio is used to measure the financial performance. These scores are further used to examine the impact of CS performance on financial performance employing both the panel data model and logit regression model. Findings The study finds that the average level of disclosure is more in case of Japanese firm as compared to Indian firms. Using both the regression model, the study finds the influence of CS performance on financial performance is positive and significant for both the nations. However, the influence of CS performance is more in case of Japan than that of India. Moreover, the study also reveals that environmental factor is more dominating in influencing the financial performance in Japan. Whereas, in India, it is the social factor that dominates the financial performance. Originality/value It is the first comprehensive study in Asia analyzing the CS practices using both the panel data regression model and logit regression model.

Does a Principle Based Accounting Standard Improve the Disclosure Level? Evidence from the Adoption of IAS 19R

This research investigates whether a principle based accounting standard improves the disclosure level, and uses the latest pension accounting standard- IAS 19R as the subject. More specifically, this essay examines whether IAS 19R affects the average disclosure level of the actuarial assumptions (DAS). 200 companies are chosen from four European countries (i.e. Germany, Sweden, France, and Italy) as the sample, and the data is hand-collected by reviewing the annual reports of each firm when the firm first adopted the IAS 19R and one year before. The results indicate that the IAS19R significantly improves the average DAS, whilst also reducing the comparability of the disclosed pension information. Moreover, companies with more foreign ownership have a higher DAS after adopting the IAS 19R. This study advances the studies of principle based accounting standards. It provides current and comprehensive empirical research of the IAS 19R, with an in-depth examination of textual, quantitative and sensitive disclosure to get a clearer understanding of the DAS under IAS 19R. This essay may also contribute to a better understanding of the IAS 19R and provide useful feedback to the IASB concerning the implications of the IAS 19R.

Value Relevance vis-à-vis Disclosure on Business Combinations and Goodwill Recognized by Publicly Traded Brazilian Companies

Abstract The objective of this study is to examine the value relevance of the level of disclosure on business combinations and goodwill recognized by publicly traded Brazilian companies. The research sample is composed of publicly traded Brazilian companies that carried out any type of business combination, as the acquiring entity, between 2010 and 2013, yielding a total sample of 202 observations. To measure the disclosure level of each, a metric was created based on CPC-15 R1 (2011) to examine certain disclosure items in order to render a greater level of detail. Data collection was carried out using the footnotes to the annual consolidated standardized financial statements (DFPs) available from the São Paulo Stock Exchange (BM&FBOVESPA) website. The results revealed that disclosure levels for business combinations are positively and significantly associated with the stock price of the companies analyzed. As to the recognition of goodwill during business combinations, despite the fact that it represents a significant share of the value of the transactions, no statistical significance explaining stock price behavior was found. It also bears mentioning that the average level of disclosure identified in the explanatory notes in the sample was very low, indicating that companies need to improve when it comes to transparency of information.

Corporate sustainability reporting practices in India: myth or reality?

PurposeThe purpose of this paper is to look into the sustainability practices of Indian firms in terms of the quality of disclosure, the impact of corporate sustainability performance (CSP) on firm performance and the appropriateness of the sustainability reporting guidelines followed by the firms.Design/methodology/approachThe present study is based on secondary data collected from annual reports and corporate sustainability reports of 28 listed Indian non-financial firms from 2008-2009 to 2013-2014. Content analysis is used to calculate the score in terms of level (binary coding system) and quality of disclosure (four-point scale). These scores are further used to examine the impact of CSP on firm performance by using an appropriate regression model.FindingsThe study finds that the average level of disclosure is 88 per cent, whereas the quality of disclosure is nearly 80 per cent. The influence of CSP (in terms of level and quality disclosure) on firm performance is positive and significant. Moreover, the study also reveals that the Global Reporting Initiatives framework is not sufficient enough to publish the sustainability report of any business concern. The outcomes of the study, thus, indicate that sustainability practices of Indian firms are not myth but approaching toward reality.Originality/valueIt is the first comprehensive study in India to analyze the corporate sustainability reporting practices encompassing different dimensions of sustainability.

Assessment of corporate governance disclosure in the GCC countries using the UNCTAD ISAR benchmark

This paper aims to present and analyze corporate governance disclosure (CGD) practices among listed non-financial companies in the Gulf Cooperation Council (GCC) countries’ stock exchanges. GCC include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (UAE). The study utilizes the benchmark developed by the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) of the United Nations Conference on Trade and Development (UNCTAD). This benchmark comprises 52 disclosure items that are divided into five broad categories: (a) financial transparency and information disclosure; (b) ownership structure and exercise of control rights; (c) board and management structure and process; (d) corporate responsibility and compliance; and (e) auditing. This benchmark is based on the UNCTAD publication Guidance on Good Practices in Corporate Governance Disclosure. Results indicate a low level of CGD since corporate governance is still considered novel in the GCC countries. The average disclosure level was 26% while the maximum was 65%. The category with the highest disclosure level was the ‘Financial transparency and information disclosure’ which is the case with other emerging markets. Providing an assessment of CGD using ISAR benchmark provides a tool for its future re-assessment in the GCC countries. Results show how important it is to enhance the awareness of CGD in the GCC countries stressing its importance on the micro and macro levels. Results also provide regulators and policymakers with recommendations on enhancing CGD in the GCC counties. The evaluation of CGD in the GCC countries can also help various stakeholders in their investment decision making.

2013 review of the implementation status of corporate governance disclosures: Case of Egypt

This report is a case study of corporate governance disclosure in Egypt. The study employs the benchmark of good practices in corporate governance disclosure developed by the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR). This benchmark consists of fifty two disclosure items covering five subject areas and is based on a sample of the top 29 listed companies in Egypt. This study is complimentary to an earlier study conducted in 2007: 2007 Review of the implementation status of corporate governance disclosures: case study Egypt. This report compares the results of the current study to the 2007 study. This study finds the average disclosure level is less than half of the items in the ISAR benchmark. While nine items in the ISAR benchmark were disclosed by more than two-thirds of the companies in the study, forty items were disclosed by less than half. The absolute number of disclosure items found for each company ranged from 5 to 43, indicating a high level of variability between ‘best practice’ companies and companies with minimal disclosure practices. The study concludes that while the sample has relatively high rates of disclosure for few items, and the average disclosures in 2010 almost doubled the 2005 average disclosures in Egypt for several categories, they are still low levels compared to the average emerging markets levels. Policy options discussed include penalizing companies for undisclosed items, and providing education and training for executives and directors to enhance the awareness of the rapidly evolving regulatory environment, as well as the underlying importance of corporate governance disclosure