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The effect of legislation on corporate disclosure practices

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  • Stephen Owusu‐Ansah
  • Joanna Yeoh

Abstract

This article investigates the effect of the Financial Reporting Act of 1993 (FRA) on mandatory disclosure practices of companies listed on the New Zealand Exchange Limited. The FRA gave statutory backing to financial reporting standards in New Zealand and made non‐compliance illegal. Using both univariate and multivariate analyses, we examine the association between (a) the levels of compliance with mandatory disclosure by the companies in our sample, and (b) disclosure regulatory regimes that prevailed in New Zealand before and after the implementation of the FRA. We find that mean corporate disclosure compliance levels in the periods after the enactment of the FRA are significantly higher than those in the periods before the enactment of the legislation. After controlling for the effects of other mandatory disclosure‐related variables documented in prior studies, we also find that the improvement in corporate disclosure compliance behaviour is the result of the implementation of the FRA. Alternative specifications of the primary regression model indicate that those findings are robust.

Suggested Citation

  • Stephen Owusu‐Ansah & Joanna Yeoh, 2005. "The effect of legislation on corporate disclosure practices," Abacus, Accounting Foundation, University of Sydney, vol. 41(1), pages 92-109, February.
    • Handle: RePEc:bla:abacus:v:41:y:2005:i:1:p:92-109
    DOI: 10.1111/j.1467-6281.2005.00171.x
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    1. R. G. Walker & Janet Mack, 1998. "The Influence of Regulation on the Publication of Consolidated Statements," Abacus, Accounting Foundation, University of Sydney, vol. 34(1), pages 48-74, March.
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    Cited by:

    1. Gerry Gallery & Emerson Cooper & John Sweeting, 2008. "Corporate Disclosure Quality: Lessons from Australian Companies on the Impact of Adopting International Financial Reporting Standards," Australian Accounting Review, CPA Australia, vol. 18(3), pages 257-273, September.
    2. Riaz, Zahid & Ray, Pradeep & Ray, Sangeeta, 2022. "The impact of digitalisation on corporate governance in Australia," Journal of Business Research, Elsevier, vol. 152(C), pages 410-424.
    3. Yousef Alwardat, 2019. "Disclosure Quality and its Impact on Financial Reporting Quality, Audit Quality, and Investors’ Perceptions of the Quality of Financial Reporting: A Literature Review," Accounting and Finance Research, Sciedu Press, vol. 8(3), pages 201-201, August.
    4. Kirti Aggarwal, 2021. "Relationship between Company Characteristics and HR Disclosure Level: Evidences from Indian Public Sector Companies," Management and Labour Studies, XLRI Jamshedpur, School of Business Management & Human Resources, vol. 46(4), pages 399-421, November.
    5. Amitava Roy, 2014. "Corporate Governance and Firm Performance: An Exploratory Analysis of Indian Listed Companies," Jindal Journal of Business Research, , vol. 3(1-2), pages 93-120, June.
    6. Tunji Siyanbola, Trimisiu & Ifeanyi Ogbebor, Peter, 2019. "The Relationship Between Accounting Information Disclosures And Investment Decisions Of Listed Firms In Nigeria," International Journal of Contemporary Accounting Issues-IJCAI (formerly International Journal of Accounting & Finance IJAF), The Institute of Chartered Accountants of Nigeria (ICAN), vol. 8(1), pages 59-77, June.
    7. Anh Huu Nguyen & Hieu Thanh Nguyen & Chung Quang Tran & Lien Quynh Le, 2022. "Determinants of Time for Publication Annual Reports: Empirical Evidence from Non-Financial Listed Companies in Vietnam," IJFS, MDPI, vol. 10(2), pages 1-21, June.
    8. Faisal S. Alanezi & Mishari M. Alfraih & Saad S. Alshammari, 2016. "Operating Segments (IFRS 8)-Required Disclosure and the Specific-Characteristics of Kuwaiti Listed Companies," International Business Research, Canadian Center of Science and Education, vol. 9(1), pages 136-153, January.
    9. Amitava Roy, 2016. "Corporate Governance and Firm Performance: A Study of Indian Listed Firms," Metamorphosis: A Journal of Management Research, , vol. 15(1), pages 31-46, June.
    10. Karen Benson & Peter M Clarkson & Tom Smith & Irene Tutticci, 2015. "A review of accounting research in the Asia Pacific region," Australian Journal of Management, Australian School of Business, vol. 40(1), pages 36-88, February.
    11. Reajmin Sultana, 2021. "Family ownership, information problem and firm performance," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(6), pages 73-82, September.
    12. Heger Gabteni, 2011. "Construction d'un score de publication volontaire entendu comme une mesure de la communication financière en période pre/post IFRS," Post-Print hal-00650431, HAL.
    13. Soufiene Assidi, 2020. "The effect of voluntary disclosures and corporate governance on firm value: a study of listed firms in France," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 17(2), pages 168-179, September.
    14. Liu, Baohua & Huang, Dan & Chen, Tao & Chan, Kam C., 2023. "Mandatory R&D disclosure and analyst forecast Accuracy: Evidence from an emerging market," Journal of Contemporary Accounting and Economics, Elsevier, vol. 19(3).
    15. Weetman, Pauline, 2006. "Discovering the ‘international’ in accounting and finance," The British Accounting Review, Elsevier, vol. 38(4), pages 351-370.
    16. Riaz, Zahid & Ray, Sangeeta & Ray, Pradeep Kanta & Kumar, Vikas, 2015. "Disclosure practices of foreign and domestic firms in Australia," Journal of World Business, Elsevier, vol. 50(4), pages 781-792.
    17. Ayman Haddad & Wasim AlShattarat & Naser AbuGhazaleh & Haitham Nobanee, 2015. "The impact of ownership structure and family board domination on voluntary disclosure for Jordanian listed companies," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 5(2), pages 203-234, December.
    18. Niclas Hellman & Jordi Carenys & Soledad Moya Gutierrez, 2018. "Introducing More IFRS Principles of Disclosure – Will the Poor Disclosers Improve?," Accounting in Europe, Taylor & Francis Journals, vol. 15(2), pages 242-321, May.
    19. 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.
    20. Dr. Babagana Abba & Dr. Yusuf Yahaya & Professor Abdurahman Bala Sani & Dr. Asma’u Abubakar, 2025. "Corporate Attributes And Prudential Guideline Compliance Among Nigeria Banks’," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(1), pages 191-217, January.
    21. 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.
    22. Faisal S. Alanezi & Mishari M. Alfaraih & Eyad A. Alrashaid & Saad S. Albolushi, 2012. "Dual/joint auditors and the level of compliance with international financial reporting standards (IFRS‐required disclosure)," Journal of Economic and Administrative Sciences, Emerald Group Publishing Limited, vol. 28(2), pages 109-129, February.
    23. Mahmoud Al‐Akra & Ian Eddie & Muhammad Ali, 2010. "The association between privatisation and voluntary disclosure: Evidence from Jordan," Accounting and Business Research, Taylor & Francis Journals, vol. 40(1), pages 55-74.

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