Firm characteristics and forward-looking disclosure: the moderating role of gender diversity

Abstract

PurposeThe purpose of this study is to examine the impact of firm financial and operational characteristics on the level of forward-looking information disclosure (FLID) by Egyptian-listed non-financial companies. The present research also aims to investigate the moderating role of gender diversity on the board of directors.Design/methodology/approachThe sample incorporates the non-financial companies included in the EGX 100 of the Egyptian Stock Exchange (ESE), whose reports were available during the study period from 2013 to 2018. The final sample comprises 49 companies with 294 observations. Statistical analysis is performed using multiple regression analysis.FindingsThis study found a significant positive impact of return on assets, leverage, company size and age on the level FLID, while external audit firm type and industry were found to impact the level of FLID negatively. Further, the board gender diversity (BGD) is found to have a moderating impact as it strengthens the effect of financial and operational characteristics on the level of FLID.Practical implicationsThe present study has some implications for Egyptian companies, investors in the Egyptian market and regulators in emerging economies, which include paying more attention to BGD when selecting the board members by companies as well as following up the female representation in all the listed companies by regulators.Originality/valueTo the best of the authors’ knowledge, this is the first study to investigate the moderating role of BGD and its impact on the level of FLID in emerging markets. This extends the disclosure literature as the present study brings new evidence from an emerging market regarding BGD moderating role as early research concentrated on the direct impact of BGD on the level of FLID.

Technical Reserves Audit Challenges and Opportunities with the Emergence of ERP: Investigating Egyptian Auditors Perceptions

“…The fields of finance and accounting research encompass both neoclassical and agency perspectives, which generally assume that management behavior is primarily rational (Abdelazim et al, 2022;Diab et al, 2023;Diab and Mohamed Metwally, 2019;Mohamed Metwally, 2017). These viewpoints give minimal opportunity for judgement, peculiarities, or illogical behavior and its influence on the results of decisions.…”

“…Regarding the auditors' perceptions, numerous studies in accounting literature have focused on examining the disparities between males and females in various aspects such as decision making, personality traits, risk tolerance, aversion, communication styles, and transparency (Abdelazim et al, 2022). The findings of many studies suggest that female members offer an alternative perspective that deserves significant attention.…”

“…However, these variations in outcomes were noted. The majority of studies have found that Big 4 firms produce higher-quality audits for a variety of reasons, including: they have adequate resources compared to smaller audit firms (DeAngelo, 1981); better control systems (Al-Ajmi, 2009); greater independence than smaller firms because their reputation would be at risk (DeAngelo, 1981); and they charge higher audit fees, allowing them to devote more time and effort to each client (Abdelazim et al, 2022). According to some studies, the Big 4 audit firms implement varying degrees of strictness depending on the country they are located in and how much the country protects its investors, in contrast to the main strand, which claimed that Big 4 companies always enforce and implement strict controls to yield higher quality audits (Beisland et al, 2018;Metwally, 2022).…”

Management earnings forecast and technical innovation: the mediating effects of cost of debt

“…The key motivation for disclosing firms' information is to reduce asymmetric information (Gong, Xia, Xia, & Wang, 2023;Rakow, 2010) and provide transparency in the innovative process (Brown & Martinsson, 2019;Zhong, 2018). Hence, a firm's higher commitment toward frequent forward-looking earnings forecasts reflects the managers' aptitude to close the information gap between managers and outsiders (Abdelazim, Metwally, & Aly, 2023).…”

Exploring Forward-Looking Information Disclosure Practices: Insights from the Malaysian Landscape in the IFRS Era

“…Since investors and other outsiders place a higher value on a company's forward-looking projections than on its historical performance, thus it makes sense that they would find forward-looking disclosure more useful. As a result of its importance, researchers in recent years have been motivated to focus their studies on FLID (e.g., Buertey and Pae, 2020;Dey et al, 2020;Firmansyah and Irwanto, 2020;Rifai and Siregar, 2021;Abdelazim et al, 2022;Effah et al, 2022;Al Lawati and Hussainey, 2022;Al Lawati et al, 2023a;Al Lawati et al 2023b). Malaysian regulatory authorities have been striving to improve disclosure practices as indicated by the corporate disclosure framework established under the Bursa Malaysia Listing Requirement ( 2004), which contained the Best Practices in Corporate Disclosure initiative.…”