Purpose The purpose of this paper is to identify the factors affecting firm voluntary disclosure policy adopted by a sample of 25 UAE companies listed on the Abu Dhabi Securities Exchange (ADX) for the period 2010-2014. Design/methodology/approach The author computes a weighted disclosure index (Botosan, 1997) for three-factor voluntary disclosure items and uses a multivariate regression analysis between disclosure index and a set of explanatory variables identified by previous research. The author also controls for endogeneity problem and uses panel data estimation. Findings It has been found that listing history, governmental sector, firm profitability and foreign listing positively affect the level of voluntary disclosure adopted by ADX listed companies. By contrast, the percentage of shares owned by block holders and industrial sector negatively affect the level of voluntary disclosure by ADX listed companies. Finally, the board and firm size, managers’ stock options and the leverage ratio do not have any impact on the level of voluntary disclosure adopted by ADX firms. The results remain unchanged to additional sensitivity checks. Research limitations/implications The research presents some limitations: first, the author does not take into account all voluntary disclosure items such as human resources and environmental data disclosed by ADX listed firms. Second, other voluntary disclosure determinants remain unexplored for UAE firms such as culture and tax incentives in the light of the new tax rules including corporate tax and value-added tax. Practical implications The study has many implications: first, it can help investors in their decision making and lead to fair allocation of resources. Second, it gives helpful directives to UAE accounting authorities to enhance the quality of financial reporting in the light of the New Commercial Company Law 2015 for mandatory adoption of IFRS by all listed companies. The paper also presents helpful directives for tax authorities planning for both company and value-added taxes. It also sheds light on factors driving corporate social responsibility disclosures as a crucial component of voluntary disclosure policy Originality/value The paper explores the new determinants of voluntary disclosure such as foreign listing, governmental status and block holding for an emerging relatively unexplored stock market: ADX.

Purpose The aim of this paper is to examine the impact of corporate governance mechanisms on earnings management practice for a sample of Gulf Cooperation Council (GCC) Islamic banks (IBs) using a new model of earnings management. Design/methodology/approach First, the authors estimate discretionary accruals based on loan loss provisions discretionary loan loss provision (DLLP) using the procedure derived from Jones’ (1991) original model. Second, the authors run a multivariate regression model to check the linkage between corporate governance characteristics and discretionary loan loss provision. Finally, the authors use an additional sensitivity check analysis to assess whether the results are robust to the estimation procedure and to other exogenous factors. Findings Using as sample of 26 IBs pertaining to the GCC region with a total of 223 firm-year observations and a nine-year period (2004-2012), the results are conclusive and show that first, IBs with large Shariah Board size manage less DLLP. Secondly, Accounting and Auditing Organization for Islamic Financial Institutions membership positively impacts earnings management through DLLP in IBs. Third, there is a negative relationship between boards of director’s independence the extent to which IBs manage DLLP. Fourth, the existence of block holders positively affects earnings management by IBs. Fifth, there is a negative relationship between audit committee meetings and DLLP. Finally, institutional ownership and bank size have no effect on earnings management through DLLPs. Research limitations/implications In this research, the authors do not take into account all governance factors that are supposed to impact earnings management in IBs. Future research should explore the impact of additional IBs governance structures including chief executive officer bonus, experience, gender and the extent to which IBs use real earnings management with Murabaha, Mudaraba and Musharaka transactions. Practical implications The paper is a very useful source of information that may provide relevant guidelines in helping the future development of corporate governance of IBs. In addition, the findings could prove to be useful for regulators because they are responsible for the acceptable level of corporate governance standards. Thus, they must consider strengthening governance mechanisms either through new legislation or stronger enforcement where earnings management is of such magnitude to that serious impedes information transparency and financial reporting quality of IBs. Originality/value This study associates the corporate governance characteristics with earnings management by IBs. The study contributes to the growing body of literature on earnings management and corporate governance in IBs. It should be useful to researchers, regulators, investors, analysts and creditors as well as other players in the capital markets, as it presents a new and important aspect that needs to be accounted for when assessing the quality of IBs’ accounting information in GCC countries.

Corporate social responsibility (CSR) disclosures have gained great attention in both the media and the academic community for many decades. In this paper, we shed light on three aspects of CSR disclosures, namely the determinants, measure and impact on firm value. Using a sample of 61 firms listed on the ADX for the period 2010-2014 and computing an eight-item index, our results are conclusive and show that listing history, governmental sector, board size, financial leverage and firm size have a positive impact on CSR disclosures. By contrast, firm profitability, industrial sector and ownership concentration have no impact on the extent of CSR disclosures.Finally, CSR disclosures have no impact on firm value as proxied by market-to-book ratio. Our results remain unchanged using additional robustness checks. Our study highlights the three aspects of social disclosures (i.e. determinants, measure and impact) in an emerging stock market (ADX). Our findings will help investors when assessing firm value and policy makers when issuing CSR disclosure rules.

Empirical evidence indicates that Environmental, Social, and Governance (ESG) practices are associated with firm financial performance, but little is known about stock market participants’ behaviour towards ESG practices, especially in unfavourable settings, where the level of shareholders’ protection is relatively weak. In this article, we examine whether ESG performance provides shareholders with value-relevant information to help them in their equity pricing decisions. Using a cross-country sample of non-financial firms drawn from 10 Middle East and North African (MENA) countries between the period from 2013 to 2019, we find evidence, which is based on the price specification of Ohlson (1995) valuation model, that ESG performance practices are positively priced by market participants and add incremental information content to earnings and book value of equity (BVE). However, when we split the aggregate ESG performance into its components, governance practice is found to be more value relevant than social practice, while the environmental pillar is found to be value (ir)relevant to shareholders. Results using the return valuation model complement and validate the price model specification. Our results suggest that social capital and institutional structures prevail on firm environmental impact. These results are robust to a set of additional tests. Overall, our empirical results indicate that market participants incorporate ESG performance when assessing firm value for the MENA region. Our findings could have several implications for managers, stockholders and regulatory bodies.

Purpose This paper aims to highlight the relationship between the attributes of external auditor companies and voluntary corporate social responsibility (CSR) disclosures of audited firms using a sample of Abu Dhabi Securities Exchange (ADX)-listed companies. Design/methodology/approach Based on a sample of 410 firm-year observations for the period 2010–2016, this study first computes an eight-item CSR disclosure index, then ran a multivariate regression analysis between CSR disclosure scores and external auditor attributes, along with client firm characteristics and additional control variables. Finally, this paper performs various additional robustness checks. Findings The results reveal that external auditor attributes have a significant impact on shaping the CSR disclosures of ADX-listed firms. Overall, auditor age, size, industry specialisation and portfolio diversification positively affect the level of customers’ CSR disclosures. By contrast, the magnitude of audit fees and auditor experience in the UAE has no impact on the CSR disclosures of ADX-listed firms. This study controls for client firm size, financial leverage, ownership concentration and the proportion of independent directors on companies’ board of directors. The results remain robust to additional sensitivity checks such as audit company CSR practices, extreme quartiles of CSR disclosures and the panel data estimation method. Research limitations/implications The research exhibits some limitations. First, this paper uses a simple index to measure CSR disclosures based on previous empirical studies, especially those related to emergent markets, which are not free from bias due to the lack of voluntary disclosure transparency for some companies listed on ADX. Second, although this study uses a seven-year observation period, the total number of observations remains limited due to ADX size. Third, other context-specific disclosures should be included such as cultural and governance variables (royal families ownership). Practical implications The study highlights the role of external attributes that can affect companies’ CSR disclosure policy, rather than firm-specific factors. The study also reshapes the concept of auditor quality beyond the dichotomy (“Big Four”/non-Big Four) used in the current literature. Originality/value The research adds to the current literature on CSR by revealing the impact of external auditor attributes on client firm CSR disclosure policy in an emerging market, the ADX.