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The determinants of voluntary disclosure in Saudi Arabia: an empirical study

The determinants of voluntary disclosure in Saudi Arabia: an empirical study Our study has three objectives. The first is to determine the voluntary disclosure level in Saudi Arabia. The second is to compare this level with that of some other Arab countries. The third is to identify the main drivers of voluntary disclosure in Saudi Arabia. We use a 54-item disclosure checklist and apply the regression and content analyses to examine a sample of 361 firm-year observations of firms listed on Saudi Stock Exchange during 2007­2011. We find the voluntary disclosure average is 18.38% and that the firm size, age, profitability, auditor specialisation, family ownership, and industry type positively affect voluntary disclosure. We find, however, a negative relation between firm leverage and voluntary disclosure. Our analysis also shows that board independence, Big4 and state ownership have no impact on voluntary disclosure. Our findings should be of interest to the regulating bodies, accounting standards' setters, auditors and managers. Keywords: voluntary disclosure; firm characteristics; corporate governance; Saudi Arabia. Reference to this paper should be made as follows: Habbash, M., Hussainey, K. and Awad, A.E. (2016) `The determinants of voluntary disclosure in Saudi Arabia: an empirical study', Int. J. Accounting, Auditing and Performance Evaluation, Vol. 12, No. 3, pp.213­236. Biographical notes: Murya http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Accounting, Auditing and Performance Evaluation Inderscience Publishers

The determinants of voluntary disclosure in Saudi Arabia: an empirical study

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Publisher
Inderscience Publishers
Copyright
Copyright © 2016 Inderscience Enterprises Ltd.
ISSN
1740-8008
eISSN
1740-8016
DOI
10.1504/IJAAPE.2016.077890
Publisher site
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Abstract

Our study has three objectives. The first is to determine the voluntary disclosure level in Saudi Arabia. The second is to compare this level with that of some other Arab countries. The third is to identify the main drivers of voluntary disclosure in Saudi Arabia. We use a 54-item disclosure checklist and apply the regression and content analyses to examine a sample of 361 firm-year observations of firms listed on Saudi Stock Exchange during 2007­2011. We find the voluntary disclosure average is 18.38% and that the firm size, age, profitability, auditor specialisation, family ownership, and industry type positively affect voluntary disclosure. We find, however, a negative relation between firm leverage and voluntary disclosure. Our analysis also shows that board independence, Big4 and state ownership have no impact on voluntary disclosure. Our findings should be of interest to the regulating bodies, accounting standards' setters, auditors and managers. Keywords: voluntary disclosure; firm characteristics; corporate governance; Saudi Arabia. Reference to this paper should be made as follows: Habbash, M., Hussainey, K. and Awad, A.E. (2016) `The determinants of voluntary disclosure in Saudi Arabia: an empirical study', Int. J. Accounting, Auditing and Performance Evaluation, Vol. 12, No. 3, pp.213­236. Biographical notes: Murya

Journal

International Journal of Accounting, Auditing and Performance Evaluation – Inderscience Publishers

Published: Jan 1, 2016

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