Financial Instruments Disclosure Practices: Evidence from Malaysian Listed Firms

Adznan, Syaima'; Nelson, Sherliza Puat

doi:10.17576/ajag-2015-6-04

Cited by 5 publications

(12 citation statements)

References 22 publications

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“…Following prior research (Elzahar and Hussainey, 2012;Adznan and Nelson, 2014;Hassanein and Hussainey, 2015;Nelson, 2016), we exclude financial firms from the sample because they are subject to capital requirement regulations, which are thought to influence disclosure practices. Moreover, banks and insurance firms are subject to different disclosure regulations, and the nature of their transactions and asset portfolios differs substantially from those of non-financial firms.…”

Section: Methodsmentioning

confidence: 99%

The impact of boardroom internationalisation on online disclosures of S&P 500

Shehadeh

Aly

Yousef

2021

JFRA

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Purpose The purpose of this study is to analyse the level of online disclosure of firms in the USA and to evaluate the impact of diversity in terms of director nationality (boardroom internationalisation) on online disclosure. Design/methodology/approach The authors apply, for the first time, a new modified scoring system to measure online disclosure levels by securing more detailed information on each of the items in the voluntary disclosure index. Regarding the percentage of foreign board members, unlike in previous research, the authors calculate two additional proxies to more accurately specify the level of international diversity on the board: the Blau Index and the Shannon Index. Moreover, the authors use a cross-sectional model for the sampled non-financial S&P500 firms using both ordinary least squares (OLS) and heteroskedasticity-corrected estimates to analyse the impact of boardroom internationalisation on the level of online disclosure. Findings The findings reveal that the average online disclosure level for the sample in question is 64% for the 0–1 index and 57% for the 0–4 index. In addition, the results of the regression analysis confirm the study’s proposed hypothesis, which is that the presence of international board members correlates with an improvement in the level of online disclosure. This can be attributed to the fact that foreign directors bring unique skills and knowledge from their home countries and thus, increase board discussion, creativity and innovation, which has a positive impact on the level of online disclosure. Research limitations/implications Financial firms are subject to capital requirement regulations; consequently, disclosure practices can be influenced. Therefore, these firms were excluded from the sample of the study. Originality/value This research contributes to the body of literature on nationality diversity of firm boards and corporate online disclosure in several respects. Firstly, the study adds an international dimension to the existing literature. Secondly, this study provides new evidence that foreign diversity on the board can improve firm value, insofar as the corresponding enhancement of online disclosure leading to positive capital market implications. Thirdly, the authors use, for the first time, a new scoring system approach to measure the level of online disclosure. Finally, it contributes to the corporate governance literature by basing its analysis on a multi-theoretical approach.

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Section: Methodsmentioning

confidence: 99%

The impact of boardroom internationalisation on online disclosures of S&P 500

Shehadeh

Aly

Yousef

2021

JFRA

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“…The disclosed items were coded as "1" and if not "0". If an item did not apply to the company, it was marked as "not applicable" (Cooke, 1992;Adznan and Nelson, 2014).…”

Section: Materials and Methodologymentioning

confidence: 99%

“…Transparent financial statements are those that "disclose the events, transactions, judgments, and estimates underlying the statements, and their implications" (Pownall and Schipper, 1999). This detailed information is critical to ensuring that financial statements are prepared to reflect the true financial position of companies and help their users make more informed decisions (Adznan and Nelson, 2015;Leote et al, 2020).…”

Section: Literature Reviewmentioning

confidence: 99%

“…The scope of disclosed information on credit and business risk increased, while the scope of information on market, operational and strategic risk decreased in the analyzed period. Adznan and Nelson (2014) conducted an analysis of the financial statements of 319 Malaysian IFRS-adopting companies, based on which they concluded that the audited companies mostly comply with disclosure obligations regarding financial instruments in accordance with IFRS guidelines. The information that was most rarely disclosed concerned the application of hedge accounting.…”

Section: Literature Reviewmentioning

confidence: 99%

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Disclosure Practices of Information in the Field of Financial Instruments: Evidence from Polish Companies Listed in the Warsaw Stock Exchange

Judkowiak¹

2021

ERSJ

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Purpose: The aim of the work is to investigate the practices of disclosing information about financial instruments in the financial statements due to the fulfillment of disclosure obligations and voluntary presentation of information under the accounting policy of financial instruments of companies listed in the Warsaw Stock Exchange. Design/Methodology/Approach: The research aimed at achieving the assumed goal was conducted based on annual, separate financial statements of listed companies for 2016 and 2017. The selection of entities for the audit covered 66 companies and was deliberate selection. In the study, the content of financial statements was analyzed. Findings: The analysis shows that the requirements for disclosing information about financial instruments in accordance with the accounting principles are very liberal. The scope of disclosures about financial instruments among Polish companies is varied and their transparency is low. Overall results show that companies are complying with their accounting policy disclosures, although there are a few requirements that companies ignore. The main problem with information transparency about financial instruments is that companies comply with their disclosure obligations by copying the guidelines and not by presenting important principles to the usefulness of the information. Practical Implications: The information obtained will constitute the basis for multifaceted research on accounting for financial instruments, especially in the field of identifying mandatory and voluntary disclosures of information about the accounting policy of financial instruments, as well as comparing and assessing the application of specific accounting principles of financial instruments from individual periods of application of the guidelines. Originality/Value: The study joins the current literature dealing with disclosure practices about financial instruments that are still missing. The study enriches the existing knowledge in the field of financial instruments and IFRS by identifying attributes that increase the level of information related to financial instruments provided by non-financial enterprises.

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“…Furthermore, references of some recent studies have also been considered to identify other empirical studies. This search has yielded a total of 71 studies of which (a) five have been excluded as they relate to non-index-based measure of VD (Bradbury, Mak, & Tan, 2006; Byard, Li, & Weintrop, 2006; Carcello & Neal, 2003; Vafeas, 2000); (bi) two are dropped for considering mandatory disclosure only (Adznan & Nelson, 2014; Chen & Jaggi, 2000), leaving 64 studies over the period 1998–2018 (given in Table 2). Although some studies have considered specific information such as intellectual capital information (Cerbioni & Parbonetti, 2007); corporate social information (Barako & Brown, 2008; Frias-Aceituno, Rodriguez-Ariza, & Garcia-Sanchez, 2013; Said, HjZainuddin, & Haron, 2009); forward looking information (O’Sullivan, Percy, & Stewart, 2008; Uyar & Kilic, 2012); environmental and sustainability information (Michelon & Parbonetti, 2012; Rupley, Brown, & Marshall, 2012); voluntary risk information (Elshandidy et al, 2013; Said Mokhtar & Mellett, 2013); human resource information (Kaur, Raman, & Singhania, 2016); and environmental, social, and governance (ESG) information (Cucari et al, 2018), this article considers all of them under the broad category of “VD” as the conceptual definition of VD does not change with the type of information disclosed.…”

Section: Literature Search Methodsmentioning

confidence: 99%

Corporate Governance and Voluntary Disclosure: A Synthesis of Empirical Studies

Saha

Kabra

2020

Business Perspectives and Research

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Voluntary disclosure (VD) is considered potentially important for efficient functioning of the capital market as it communicates firms’ performance and governance to shareholders and potential investors, which boost their confidence. This article attempts to provide a brief conceptual framework of VD and corporate governance (CG), and also reviews the empirical literature dealing with relationship between them. To this end, the article uses systematic electronic literature search method, which takes into account 65 empirical studies published over the period 1998–2018. An investigation of empirical findings points to some factors that may have contributed toward the apparent inconsistent findings observed to date. In particular, the article focuses on two intervening factors for variation of results—such as CG system and measurement of explanatory variables. The findings suggest that studies mostly from Anglo-Saxon system (ASS) show complementary relationship between different attributes of CG with VD, whereas in case of communitarian system, studies mostly depict an insignificant impact of CG attributes on VD except for few studies showing their positive/negative impact on VD. However, in case of emerging market system (EMS), some studies show substitutive relationship between board independence (BI) and VD while other CG attributes such as board size (BS), (GD), and audit committee independence (ACI) in most of the studies complement VD supporting the resource-based perspective. Furthermore, the association of ownership structure (OS) and role duality (RD) with VD is mixed. Another factor, which is considered to be added to variation of results, is measurement of explanatory variables whereby albeit studies employed same concepts, operational definition of variables intervenes into the relationship between CG and VD. The findings of this article provide some deeper insights about the complementary and substitutive relationships between CG and VD by integrating diverse empirical findings under different research contexts. Future research can extend to analyze some other institutional factors like investors’ protection rights and legal enforcement, which might also have played some role in influencing the relationship between CG and VD. Furthermore, it is also evident from the review that BS and BI are the most commonly studied CG attributes in relation to VD, whereas attributes like GD and ACI, despite their theoretical relevance and practical importance are least studied in relation to VD, thus signaling the need to focus on these attributes in future studies.

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Financial Instruments Disclosure Practices: Evidence from Malaysian Listed Firms

Cited by 5 publications

References 22 publications

The impact of boardroom internationalisation on online disclosures of S&P 500

The impact of boardroom internationalisation on online disclosures of S&P 500

Disclosure Practices of Information in the Field of Financial Instruments: Evidence from Polish Companies Listed in the Warsaw Stock Exchange

Corporate Governance and Voluntary Disclosure: A Synthesis of Empirical Studies

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