IDEAS home Printed from https://ideas.repec.org/a/hur/ijaraf/v5y2015i2p66-85.html
   My bibliography  Save this article

The Impact of Shariah Approved Companies on the Relationship between Corporate Governance Structure and Voluntary Disclosure of Interim Financial Reporting in Jordan

Author

Listed:
  • Ala’ Hussein Albawwat
  • Mohamad Yazis Ali Basah

Abstract

This study examines the impact of shariah approved companies on the relationship between corporate governance structure and voluntary disclosure of half-yearly reports in Jordan, focusing on variables that affect voluntary disclosure of the ASE Jordanian listed companies. The dynamic panel system GMM estimation was employed on the data from 72 selected ASE listed companies for the period of 2009-2013, and the results show that a substantial level of voluntary disclosure is demonstrated in high level corporate governance awareness and implementation in Jordan. Specifically, the factors of board compensation, number of shareholders, government ownership and Shariah approved company significantly impact voluntary disclosure. In addition, this study shown that the effect imparted by the presence of audit committee, board size, and block-holder ownership on the level of voluntary disclosure appear to be greater among the Shariah approved companies. Aside from that, voluntary disclosure in the half-yearly reports has potential impact on market capitalization. The findings may provide some implications for research regarding the voluntary disclosure and Shariah approved companies of financial reporting in Jordan.

Suggested Citation

  • Ala’ Hussein Albawwat & Mohamad Yazis Ali Basah, 2015. "The Impact of Shariah Approved Companies on the Relationship between Corporate Governance Structure and Voluntary Disclosure of Interim Financial Reporting in Jordan," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 5(2), pages 66-85, April.
    • Handle: RePEc:hur:ijaraf:v:5:y:2015:i:2:p:66-85
    as

    Download full text from publisher

    File URL: http://hrmars.com/hrmars_papers/Article_08_The_Impact_of_Shariah_Approved_Companies_on_the_Relationship.pdf
    Download Restriction: no
    File URL: http://hrmars.com/hrmars_papers/Article_08_The_Impact_of_Shariah_Approved_Companies_on_the_Relationship.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jodie Nelson & Gerry Gallery & Majella Percy, 2010. "Role of corporate governance in mitigating the selective disclosure of executive stock option information," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 50(3), pages 685-717, September.
    2. Anil K. Makhija & James M. Patton, 2004. "The Impact of Firm Ownership Structure on Voluntary Disclosure: Empirical Evidence from Czech Annual Reports," The Journal of Business, University of Chicago Press, vol. 77(3), pages 457-492, July.
    3. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    4. Eng, L. L. & Mak, Y. T., 2003. "Corporate governance and voluntary disclosure," Journal of Accounting and Public Policy, Elsevier, vol. 22(4), pages 325-345.
    5. Musa Mangena & Venancio Tauringana, 2007. "Corporate Compliance with Non-Mandatory Statements of Best Practice: The Case of the ASB Statement on Interim Reports," European Accounting Review, Taylor & Francis Journals, vol. 16(2), pages 399-427.
    6. Musa Mangena & Richard Pike, 2005. "The effect of audit committee shareholding, financial expertise and size on interim financial disclosures," Accounting and Business Research, Taylor & Francis Journals, vol. 35(4), pages 327-349.
    7. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    8. Bushman, Robert & Chen, Qi & Engel, Ellen & Smith, Abbie, 2004. "Financial accounting information, organizational complexity and corporate governance systems," Journal of Accounting and Economics, Elsevier, vol. 37(2), pages 167-201, June.
    9. Al-Akra, Mahmoud & Jahangir Ali, Muhammad & Marashdeh, Omar, 2009. "Development of accounting regulation in Jordan," The International Journal of Accounting, Elsevier, vol. 44(2), pages 163-186, June.
    10. Yermack, David, 1996. "Higher market valuation of companies with a small board of directors," Journal of Financial Economics, Elsevier, vol. 40(2), pages 185-211, February.
    11. Lopes, Patricia Teixeira & Rodrigues, Lucia Lima, 2007. "Accounting for financial instruments: An analysis of the determinants of disclosure in the Portuguese stock exchange," The International Journal of Accounting, Elsevier, vol. 42(1), pages 25-56.
    12. Archambault, Jeffrey J. & Archambault, Marie E., 2003. "A multinational test of determinants of corporate disclosure," The International Journal of Accounting, Elsevier, vol. 38(2), pages 173-194.
    13. Denis Cormier & Marie-Josée Ledoux & Michel Magnan, 2012. "The moderating effect of voluntary disclosure on the relation between earnings quality and information asymmetry: some Canadian evidence," International Journal of Accounting, Auditing and Performance Evaluation, Inderscience Enterprises Ltd, vol. 8(2), pages 157-183.
    14. Fawzi Al Sawalqa, 2013. "Transparency of Annual Corporate Reports’ Contents in Jordan: Is it questionable?," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 3(1), pages 409-417, January.
    15. Jiang, Haiyan & Habib, Ahsan & Hu, Baiding, 2011. "Ownership concentration, voluntary disclosures and information asymmetry in New Zealand," The British Accounting Review, Elsevier, vol. 43(1), pages 39-53.
    16. Collins G. Ntim & Kwaku K. Opong & Jo Danbolt & Dennis A. Thomas, 2012. "Voluntary corporate governance disclosures by post‐Apartheid South African corporations," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 13(2), pages 122-144, September.
    17. Bassam Maali & Peter Casson & Christopher Napier, 2006. "Social reporting by islamic banks," Abacus, Accounting Foundation, University of Sydney, vol. 42(2), pages 266-289, June.
    18. Owusu-Ansah, Stephen, 1998. "The impact of corporate attribites on the extent of mandatory disclosure and reporting by listed companies in Zimbabwe," The International Journal of Accounting, Elsevier, vol. 33(5), pages 605-631.
    19. M. Akhtaruddin & Hasnah Haron, 2010. "Board ownership, audit committees’ effectiveness, and corporate voluntary disclosures," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 18(3), pages 245-259, September.
    20. Begoña Giner Inchausti, 1997. "The influence of company characteristics and accounting regulation on information disclosed by Spanish firms," European Accounting Review, Taylor & Francis Journals, vol. 6(1), pages 45-68, May.
    21. Jasim Al-Ajmi, 2009. "Investors' use of corporate reports in Bahrain," Managerial Auditing Journal, Emerald Group Publishing, vol. 24(3), pages 266-289, March.
    22. Indrarini Laksmana, 2008. "Corporate Board Governance and Voluntary Disclosure of Executive Compensation Practices," Contemporary Accounting Research, John Wiley & Sons, vol. 25(4), pages 1147-1182, December.
    23. Gao, Lei & Kling, Gerhard, 2012. "The impact of corporate governance and external audit on compliance to mandatory disclosure requirements in China," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 21(1), pages 17-31.
    24. R.M. Haniffa & T. E. Cooke, 2002. "Culture, Corporate Governance and Disclosure in Malaysian Corporations," Abacus, Accounting Foundation, University of Sydney, vol. 38(3), pages 317-349, October.
    25. Xiao, Jason Zezhong & Yang, He & Chow, Chee W., 2004. "The determinants and characteristics of voluntary Internet-based disclosures by listed Chinese companies," Journal of Accounting and Public Policy, Elsevier, vol. 23(3), pages 191-225.
    26. John, Kose & Senbet, Lemma W., 1998. "Corporate governance and board effectiveness1," Journal of Banking & Finance, Elsevier, vol. 22(4), pages 371-403, May.
    27. Imen Khanchel, 2007. "Corporate governance: measurement and determinant analysis," Managerial Auditing Journal, Emerald Group Publishing, vol. 22(8), pages 740-760, September.
    28. M. Akhtaruddin & Hasnah Haron, 2010. "Board ownership, audit committees' effectiveness and corporate voluntary disclosures," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 18(1), pages 68-82, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Federica Balluchi & Katia Furlotti & Michele Mazzieri & Riccardo Torelli, 2019. "Corporate Social Responsibility Disclosure in Italy: An Analysis of the Last Years," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 9(1), pages 54-64, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hichem Khlif & Kamran Ahmed & Mohsen Souissi, 2017. "Ownership structure and voluntary disclosure: A synthesis of empirical studies," Australian Journal of Management, Australian School of Business, vol. 42(3), pages 376-403, August.
    2. Samaha, Khaled & Khlif, Hichem & Hussainey, Khaled, 2015. "The impact of board and audit committee characteristics on voluntary disclosure: A meta-analysis," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 24(C), pages 13-28.
    3. Abdullah, Azrul Bin & Ismail, Ku Nor Izah Ku, 2018. "Hedging Activities Information and Risk Management Committee Effectiveness: Malaysian evidence," SocArXiv kxfqe, Center for Open Science.
    4. Liu, Sun, 2015. "Corporate governance and forward-looking disclosure: Evidence from China," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 25(C), pages 16-30.
    5. Abdullah, Azrul & Ku Ismail, Ku Nor Izah, 2015. "Hedging Activities Information and Risk Management Committee Effectiveness: Malaysian evidence," MPRA Paper 85026, University Library of Munich, Germany.
    6. Khaleed Omair Alotaibi & Khaled Hussainey, 2016. "Determinants of CSR disclosure quantity and quality: Evidence from non-financial listed firms in Saudi Arabia," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 13(4), pages 364-393, November.
    7. Melis, Andrea & Gaia, Silvia & Carta, Silvia, 2015. "Directors' remuneration: A comparison of Italian and UK non-financial listed firms' disclosure," The British Accounting Review, Elsevier, vol. 47(1), pages 66-84.
    8. Rupjyoti Saha & K. C. Kabra, 2020. "Corporate Governance and Voluntary Disclosure: A Synthesis of Empirical Studies," Business Perspectives and Research, , vol. 8(2), pages 117-138, July.
    9. repec:mth:ijafr8:v:8:y:2018:i:3:p:1-28 is not listed on IDEAS
    10. Tahseen Mohsan Khan & Safia Nosheen & Naveed ul Haq, 2020. "Corporate governance mechanism and comparative analysis of one-tier and two-tier board structures: evidence from ASEAN countries," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 17(2), pages 61-72, September.
    11. Laura Bini & Francesco Giunta & Rebecca Miccini & Lorenzo Simoni, 2023. "Corporate governance quality and non-financial KPI disclosure comparability: UK evidence," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 27(1), pages 43-74, March.
    12. Cristina Alexandrina Stefanescu, 2013. "How Do Ownership Features Affect Corporate Governance Disclosure ? - The Case of Banking System," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 9(2), pages 37-51, April.
    13. Ray Donnelly & Mark Mulcahy, 2008. "Board Structure, Ownership, and Voluntary Disclosure in Ireland," Corporate Governance: An International Review, Wiley Blackwell, vol. 16(5), pages 416-429, September.
    14. Al-Akra, Mahmoud & Eddie, Ian A. & Ali, Muhammad Jahangir, 2010. "The influence of the introduction of accounting disclosure regulation on mandatory disclosure compliance: Evidence from Jordan," The British Accounting Review, Elsevier, vol. 42(3), pages 170-186.
    15. Aminah Nalikka, 2009. "Impact of Gender Diversity on Voluntary Disclosure in Annual Reports," Accounting & Taxation, The Institute for Business and Finance Research, vol. 1(1), pages 101-113.
    16. Lopes, Patricia Teixeira & Rodrigues, Lucia Lima, 2007. "Accounting for financial instruments: An analysis of the determinants of disclosure in the Portuguese stock exchange," The International Journal of Accounting, Elsevier, vol. 42(1), pages 25-56.
    17. Hoechle, Daniel & Schmid, Markus & Walter, Ingo & Yermack, David, 2012. "How much of the diversification discount can be explained by poor corporate governance?," Journal of Financial Economics, Elsevier, vol. 103(1), pages 41-60.
    18. Araniyar C. Isukul & John J. Chizea, 2017. "Corporate Governance Disclosure in Developing Countries: A Comparative Analysis in Nigerian and South African Banks," SAGE Open, , vol. 7(3), pages 21582440177, July.
    19. Marie Chavent & Yuan Ding & Linghui Fu & Herve Stolowy & Huiwen Wang, 2006. "Disclosure and determinants studies: An extension using the Divisive Clustering Method (DIV)," European Accounting Review, Taylor & Francis Journals, vol. 15(2), pages 181-218.
    20. Nooraisah Katmon & Omar Al Farooque, 2017. "Exploring the Impact of Internal Corporate Governance on the Relation Between Disclosure Quality and Earnings Management in the UK Listed Companies," Journal of Business Ethics, Springer, vol. 142(2), pages 345-367, May.
    21. Kirti Aggarwal, 2023. "Corporate governance and HR disclosure practices: evidence from India," SN Business & Economics, Springer, vol. 3(2), pages 1-18, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hur:ijaraf:v:5:y:2015:i:2:p:66-85. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hassan Danial Aslam (email available below). General contact details of provider: http://hrmars.com/index.php/pages/detail/Accounting-Finance-Journal .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.