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An investigation of voluntary disclosure by Kuwaiti Shariahcompliant companies

An investigation of voluntary disclosure by Kuwaiti Shariahcompliant companies Purpose The purpose of this study is to measure the extent of voluntary disclosure in the 2009 annual reports of 108 Shariahcompliant companies listed on the Kuwait Stock Exchange. The study aims to investigate three categories of voluntary disclosure overall, conventional and Islamic disclosure.Designmethodologyapproach Voluntary disclosure was measured using a selfconstructed index consisting of 132 items overall, 86 for conventional and 46 for Islamic information items. Annual reports were analyzed using descriptive statistics and ttests.Findings Results suggest that the mean overall voluntary disclosure by Shariahcompliant companies is 15 percent, but 17 percent and 13 percent for the conventional and Islamic items, respectively. Voluntary disclosure of conventional items is comparable to extant studies, and higher than Islamic items.Research limitationimplications The study uses annual reports from 2009 because they were the most recent data available on the listed companies at the beginning of the study. Since this study was undertaken before the Shariah Advisory Council of the Capital Market Authority was established on January 1, 2012, this imposes a limitation. Future study should replicate this study to assess differences with the existence of the Council.Practical implications The findings provide evidence that Shariahcomplaint companies lack voluntary disclosure, especially Islamic disclosure information. As a result, the findings should be useful to lawmakers in Kuwait for improving overall disclosure practices by Shariahcompliant companies. Preparers may use the findings to match the amount of information in their annual reports with other companies to ensure capital sourcing. Investors may use the findings for understanding disclosure behavior of Shariahcompliant companies in Kuwait. Such findings may assist them to diversify investment portfolios.Originalityvalue This study contributes to extending the Kuwaiti literature on disclosure, and fills a gap in empirical studies on Shariahcompliant disclosure practices. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Economic and Administrative Sciences Emerald Publishing

An investigation of voluntary disclosure by Kuwaiti Shariahcompliant companies

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1026-4116
DOI
10.1108/10264111311319213
Publisher site
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Abstract

Purpose The purpose of this study is to measure the extent of voluntary disclosure in the 2009 annual reports of 108 Shariahcompliant companies listed on the Kuwait Stock Exchange. The study aims to investigate three categories of voluntary disclosure overall, conventional and Islamic disclosure.Designmethodologyapproach Voluntary disclosure was measured using a selfconstructed index consisting of 132 items overall, 86 for conventional and 46 for Islamic information items. Annual reports were analyzed using descriptive statistics and ttests.Findings Results suggest that the mean overall voluntary disclosure by Shariahcompliant companies is 15 percent, but 17 percent and 13 percent for the conventional and Islamic items, respectively. Voluntary disclosure of conventional items is comparable to extant studies, and higher than Islamic items.Research limitationimplications The study uses annual reports from 2009 because they were the most recent data available on the listed companies at the beginning of the study. Since this study was undertaken before the Shariah Advisory Council of the Capital Market Authority was established on January 1, 2012, this imposes a limitation. Future study should replicate this study to assess differences with the existence of the Council.Practical implications The findings provide evidence that Shariahcomplaint companies lack voluntary disclosure, especially Islamic disclosure information. As a result, the findings should be useful to lawmakers in Kuwait for improving overall disclosure practices by Shariahcompliant companies. Preparers may use the findings to match the amount of information in their annual reports with other companies to ensure capital sourcing. Investors may use the findings for understanding disclosure behavior of Shariahcompliant companies in Kuwait. Such findings may assist them to diversify investment portfolios.Originalityvalue This study contributes to extending the Kuwaiti literature on disclosure, and fills a gap in empirical studies on Shariahcompliant disclosure practices.

Journal

Journal of Economic and Administrative Sciences – Emerald Publishing

Published: May 10, 2013

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