Mandatory Disclosure Compliance Research Articles

Moderating Role of Corruption Control on Firm Level Determinants of Corporate Sustainability Disclosure Compliance in Nigeria

This paper explores the moderating effect of corruption control in strengthening the influence of firm attributes on corporate sustainability disclosure compliance in Nigeria. The study focuses on the existing discussion on mandatory disclosure compliance with a corporate governance code. The extent of disclosure compliance is measured using a total unweighted disclosure index, developed from a panel data set of 118 companies listed on the Nigerian capital market. The companies were selected using a proportionate stratified sampling technique. The dataset for the period of 2011 to 2017 were first analyzed by static panel regression analysis. The regression models were subjected to further robustness checks under dynamic GMM panel regression analysis, to test for possible endogeneity. The findings revealed the significant moderating effect of corruption control, evidenced from the interaction of corruption control with selected firm attributes, namely; industry type, leverage and taxation. The research contributes to the existing literature, as it establishes the importance of control of corruption as an additional factor of corporate sustainability disclosure compliance within the context of Nigeria.

Moderating Role of Corruption Control on firm level determinants of Corporate Sustainability Disclosure Compliance in Nigeria

This paper explores the moderating effect of corruption control in strengthening the influence of firm attributes on corporate sustainability disclosure compliance in Nigeria. The study focuses on the existing discussion on mandatory disclosure compliance with corporate governance code. The extent of disclosure compliance is measured using a total unweighted disclosure index, developed from a panel dataset of 118 companies listed in the Nigerian capital market. The companies were selected using a proportionate stratified sampling technique. The dataset for the period of 2011 to 2017 were first analyzed by static panel regression analysis using pooled Ordinary Least Square (OLS), Fixed Effect (FE), and Random Effect (RE) models. The regression models were subjected to further robustness checks under dynamic GMM panel regression analysis, to test for possible endogeneity. The findings revealed significant moderating effect of corruption control, evidenced from the interaction of corruption control with selected firm attributes, namely; industry type, leverage and taxation. The research contributes to the existing literature, as it establishes the importance of control of corruption as an additional factor of corporate sustainability disclosure compliance within the context of Nigeria.

Determinants of mandatory disclosure compliance in Swedish municipalities

PurposeThe purpose of this article is to examine whether, and if so, to what extent, noncoercive isomorphism determines mandatory disclosure compliance at a later stage of an accounting reform.Design/methodology/approachThe analysis of compliance is based on data from 289 Swedish municipalities for 2016, which is nearly two decades after the initial legal reform in which mandatory requirements were imposed by the Swedish government in an effort to harmonize financial reporting practice. Following the standard approach in the literature, an unweighted compliance index was used as dependent variable. Proxies for municipal accounting networks and involvement in professional government accounting associations were used to explain individual municipalities' levels of compliance.FindingsDifferences in individual municipalities' levels of compliance were strongly related to the financial reporting practice of other municipalities in their accounting network. These results suggest that normative and mimetic isomorphic pressure stemming from these local networks, where accounting departments continually meet and share experiences, is a very potent force. In contrast, isomorphic pressure stemming from involvement in activities offered by professional government accounting associations is generally not a potent force at this stage.Practical implicationsIn settings where municipal accounting networks exist, it may be effective to stimulate de facto harmonization by directing information, education and other efforts toward the professional environment in which these networks operate.Originality/valueUnlike prior literature, the data in this study are from a later stage of a public sector accounting reform.

The effect of corruption and culture on mandatory disclosure compliance levels: Goodwill reporting in Europe

While responding to calls for research and regulatory concerns regarding the influence of country level characteristics on the completeness and quality of financial statements, we examine the simultaneous influences of corruption and culture on levels of compliance with mandatory disclosure requirements. We use a panel dataset of European companies, for 2008–2011, and measure compliance with IFRS goodwill disclosure requirements utilising a disclosure index. Corruption is measured using the Corruption Perception Index (CPI) and Schwartz (2008) bipolar cultural dimensions are used as measures of culture. We find that compliance levels vary significantly across sample firms, countries and over time. The level of corruption and two of the three cultural dimensions (Hierarchy and Mastery) are significantly related to these levels of compliance. These findings also hold for the changes in compliance levels over time. On that basis, the paper makes original contributions to our understanding of determinants of compliance levels with IFRS mandatory disclosure requirements.

CEO Characteristics and Timeliness of Financial Reporting of Vietnamese Listed Companies

CEO Characteristics and Timeliness of Financial Reporting of Vietnamese Listed Companies

Goodwill and Mandatory Disclosure Compliance: A Critical Review of the Literature

The aim of this paper is to critically analyse the literature published from 2002 to mid‐2015 on disclosures of goodwill and their respective impairment tests; identify the main contributions of the literature, as well as its limitations; and suggest new approaches for future research. We also present a summary of the main determinants of disclosures on goodwill in the literature as well as the still scarce studies’ conclusions of those disclosures in the market. After a review of the literature, we discuss the need to reinforce enforcement mechanisms, so as to improve the level of compliance of disclosures on goodwill and their impairment tests. The majority of the analysed literature reveals that the information disclosed about goodwill is incomplete and largely heterogeneous, indicating a reduced level of compliance with the disclosures required by accounting standards. The paper may support the development of future empirical studies about goodwill's disclosures, which will bridge the identified gaps in the literature.

The effectiveness of board of directors’ characteristics in mandatory disclosure compliance

PurposeThe purpose of this paper is to investigate the relationship between the characteristics of the board of directors and mandatory disclosure compliance (measured by International Financial Reporting Standards requirements) in firms listed on the Kuwait Stock Exchange (KSE) in 2010.Design/methodology/approachSeveral characteristics are used to assess the effectiveness of the board of directors: number of members, gender diversity, CEO duality, multiple directorships, the proportion of family members on the board and the presence of a member of the ruling family of Kuwait. Mandatory disclosure compliance is measured using a self-constructed, item-based index. A regression model tested the paper’s hypotheses.FindingsAfter controlling for firm-specific characteristics, it was found that board size, gender diversity and multiple directorships were positively correlated with compliance, while CEO duality and the proportion of family members on the board were negatively correlated with compliance.Research limitations/implicationsPotential limitations stem from both the nature of the sample and the dataset. The small sample reflects the size of the KSE and the limited timeframe (a one-year period). Nevertheless, this paper provides some interesting insights. A longitudinal study would provide more comprehensive insights into the relationship between the characteristics of the board of directors and mandatory disclosure compliance over time.Practical implicationsThe findings highlight the effectiveness of board of directors’ characteristics in promoting mandatory accounting compliance. As disclosure is fundamental for the effective functioning of capital markets and sound investments, a direct implication is that the quality of financial reporting can be improved by taking these characteristics into account.Originality/valueThe paper contributes to the literature on the determinants of mandatory accounting compliance. The findings highlight the importance of the board of directors’ role in enhancing transparency and ensuring the quality of financial reporting. The findings will be particularly valuable to those involved in the appointment of directors, who should be aware of the influence of the configuration and characteristics of the board on compliance.

PENGARUH MEKANISME CORPORATE GOVERNANCE TERHADAP TINGKAT KEPATUHAN MANDATORY DISCLOSURE PASCA KONVERGENSI IFRS

The proportion of independent commissioners and the number of audit committee meeting. Data analysis method used is descriptive analysis method and hypothesis testing. The result in this study showed the average level of mandatory disclosure compliance after convergence of IFRS in statement comprehensive income is 59.73%. The result showed that corporate governance mechanism simultaneously affect the level of compliance with mandatory disclosure after convergence of IFRS. Meanwhile corporate governance mechanism variables that affect compliance are the managerial ownership, institutional ownership and the proportion of independent commissioners. Other variable that no affect is the numbers of audit committee meeting. DOI: 10.15408/ess.v5i2.2349

The effect of firm and country characteristics on mandatory disclosure compliance

Our study investigates the role of firm and country characteristics in determining the level of compliance with mandatory disclosure requirements. We also examine whether the role of firm characteristics hold across different environments. Our empirical study relies on European Union listed firms and their level of compliance with IFRS 3 disclosure requirements. Our results demonstrate that both firm and country characteristics develop a significant task in explaining the level of compliance. They confirm that firms located in a common-law country have the strongest, and firms located in a French-civillaw country the weakest, level of compliance with IFRS 3 disclosure requirements, with firms located in a Scandinavian- and German-civil-law country placed in the middle. Our findings also suggest that return on assets is the main determinant of the level of compliance in the common-law plus Scandinavian- and German-civil-law countries, while leverage is the main determinant in the French-civil-law countries.

Family firm disclosure and accounting regulation reform in the Middle East: The case of Jordan

We examine the quality of accounting disclosures by family firms using mandatory and voluntary disclosures as proxies for the quality of disclosure. We find that family firms comply more fully with mandatory disclosure requirements than do non-family firms but they disclose significantly less voluntary information. We also document that the enhanced accounting regulation improves the strength of the association between family ownership and mandatory disclosure compliance. Another important finding is the greater disclosure, both mandatory and voluntary, for firms with high family ownership compared to firms with low family ownership.

The influence of the introduction of accounting disclosure regulation on mandatory disclosure compliance: Evidence from Jordan

This paper examines the influence of accounting disclosure regulation, governance reforms and ownership changes, resulting from privatisation, on mandatory disclosure compliance of a sample of 80 non-financial, listed Jordanian companies for the years 1996 and 2004. Employing two checklists based on the International Financial Reporting Standards (IFRS) extant in the years 1996 and 2004, we find that disclosure compliance with the IFRS is significantly higher in 2004 than that in 1996. Our multiple regression results indicate that disclosure regulation reforms produced the most significant influence on mandatory disclosure compliance. Further, governance reforms through the mandate of audit committees emerged as a significant determinant of compliance with mandatory disclosure requirements.

The Effect of Bad News on SAB 74 Disclosure Compliance

SEC Staff Accounting Bulletin No. 74 (SAB 74, U.S. SEC 1987) requires registrants to provide information about the predicted financial statement effect of an enacted but not yet adopted accounting standard. The objectives of SAB 74 disclosures are to inform users the registrant will be required to adopt a new standard, and to assist users in assessing the impact of adoption on the registrant’s financial statements upon adoption. Regulators and investors find SAB 74 disclosures useful for their decision-making (Davis-Friday et al. 1999, 2004; SEC 2005). However, little evidence exists concerning whether companies meet their SAB 74 disclosure responsibilities, and how useful SAB 74 disclosures are for predicting the financial statement impact of adopting new accounting standards. Our results indicate substantial variation in how companies complied with SAB 74 when adopting one recent accounting standard (FIN 48 in 2007), and raise questions about the quality of SAB 74 disclosures. For example, we find that less than 20% of companies provide dollar estimates of the standard’s adoption effect. Although a majority of companies disclose an immaterial adoption effect under SAB 74, many of these same companies disclose material effects upon adoption less than 60 days later. Controlling for other factors, firms with “bad news” arising from adoption of the new standard are less likely to provide SAB 74 estimates. We find that when provided, SAB 74 estimates are incrementally useful in predicting the financial statement effect of FIN 48 adoption. We develop a SAB 74 disclosure model that might be useful to regulators concerned with mandatory disclosure compliance (or lack thereof) and to investors relying upon SAB74 estimates.