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

Abstract

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.

Understanding Professor Ross Watts by Applying Kuhnian Interpretation of Science Progress

“…Accounting research experienced a tradeoff between the two types (Al-Adeem [3]) creating a demand for a theoretical ground. Such a demand has been moved because to date, accounting has not developed its own theory [1][2][3]9,10,22,23,29,37,[42][43][44][45][46][47][48][49][50][51][52][53][54][55][56][57]. Virtually, a paradigm shift indicates a development in a science (Kuhn 1996).…”

Revisiting the Role of Accounting from Ancient to Contemporary Times: An Attempt to Evaluate the Role of Corporate Accounting

“…Accounting cannot be blamed for the failures of corporations as a business model where two masters whose interests are conflicting. The emergence of giant corporations whose ownerships are scattered worldwide, mainly for multinational corporations serving passive or absent so-called owners, has been an accounting challenge for over a century [6,9,17,[24][25][26]166,167].…”

“…Not until a divorce between managing and financing operations took place did the need call for abstract grounds upon which corporate accounting founds. To date, such a mission is underdeveloped [6][7][8][9][10][21][22][23][24][25][26][27][28][29][30]12,[31][32][33][34][35].…”

Exploring the Current State of Forensic Accounting in Saudi Arabia and Possible Ways of Elevating It to Assist the Government Fighting Corruption

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