Welcome to Open Science
Contact Us
Home Books Journals Submission Open Science Join Us News
Voluntary Disclosure and Its Effect on the Quality of Accounting Information According to Users' Perspective in Jordan
Current Issue
Volume 4, 2016
Issue 6 (December)
Pages: 134-146   |   Vol. 4, No. 6, December 2016   |   Follow on         
Paper in PDF Downloads: 150   Since Oct. 28, 2016 Views: 2274   Since Oct. 28, 2016
Authors
[1]
Raed Kanakriyah, Accounting Department, Faculty of Business, Al-Balq'a Applied University, Al-Salt, Jordan.
Abstract
The purpose of this paper is to examine the impact of voluntary disclosure on the quality of accounting information according to users' perspective in Jordan. The paper finds out that all accounting information users agree about the important role of voluntary disclosure and how help them in making economic decision, also one of the vital result indicate a strong effect of voluntary disclosure on the quality of accounting information which in turn affect on users' decisions, such as investors. The findings of the study have important implications regarding the users of financial statements. In particular, the study shows that the importance of voluntary disclosure and the major role of voluntary disclosure in decision making process and detect the natural relation between voluntary disclosure and economic decisions process plus the how voluntary disclosure enhance the users awareness. It is believed that there is no Jordanian study to date examining the relationship of the voluntary disclosure and the quality of accounting information according to users’ perspective. Also this considers the first study that used the qualitative method for data collection semi-structure interview. Therefore, this study significantly contributes to the limited literature on the perceived the effect of voluntary disclosure and quality accounting information according to users' attitude. Design/methodology/approach is based on the qualitative method semi-structure interview to extract the users perception about how voluntary disclosure effect on the quality of accounting information. The researcher identified several criteria to understand the concept of "voluntary disclosure'' independent variables, and used the qualitative characteristics to measure and understands the quality of accounting information the dependent variable.
Keywords
Voluntary Disclosure; Quality of Accounting Information, Qualitative Characteristics, Decision Making Process, Accounting Information Users, Jordan
Reference
[1]
Abadi. A. and Janani, M. (2013) ''The role of disclosure quality in financial reporting'' Journal of Natural and Social Sciences 2013; 2, (3) 439-443.
[2]
Abd-Elsalam, O. H. and Weetman, P. (2003), "Introducing international accounting standards to an emerging capital market: relative familiarity and language effect in Egypt." Journal of International Accounting, Auditing and Taxation 12 (1): 63-84.
[3]
Al-Mulhem, A. (1997). "An empirical investigation of the level of financial disclosure by Saudi Arabian corporation, unpublished PhD thesis, University of Hull".
[4]
Al-Rai, Z. K., & Dahmash, N. (1998). ''The Effects of Applying the International Accounting and Auditing Standards to the Accounting Profession in Jordan''. Advances in international Accounting, 11, 179-194.
[5]
Al-Rashed, W. (1999). "The importance of accounting information and its adequacy in serving investment decisions in securities: An analytical study for securities market in Kuwait." Dirasat: Administrative Sciences26 (1): 27-64.
[6]
Alsaeed, K. (2006) The association between firm-specific characteristics and disclosure: The case of Saudi Arabia. Managerial Auditing Journal 21 (5), 476-496.
[7]
Arab, M. Y., & Mohammad, A. R. (2007). Correlation between features of financial structure and performance of firms and level of data disclosure in financial statements. Accounting Science, 22, 14-15.
[8]
Barth, M. E., W. R. Landsman, and M. Lang. (2008). International Accounting Standards and AccountingQuality. Journal of Accounting Research 46: 467-498.
[9]
Clements, C. E. and C. J. Wolfe (2000). "Reporting Financial Results with the Video Medium: An Experimental Analysis." Journal of Information Systems 14(2): 79-94.
[10]
Beck,T. & Levine, R. (2005). Legal institutions and financial development. In Handbook of New Institutional Economic, Berlin.
[11]
BelgacemInès and OmriAbdelwahed (2014). The Value Relevance of Voluntary Disclosure: Evidence from Tunisia Stock Market International. Journal of Management, Accounting and Economics Vol. 1, No. 5.
[12]
Binh, T.Q. (2012) Voluntary Disclosure Information in the Annual Reports of Non -Financial Listed Companies: The Case of Vietnam, Journal of Applied Economics and Business Research, 2(2) 69-90.
[13]
Botosan, C. and Plumlee, M. (2002). 'A re-examination of disclosure level and the expected cost of equity capital'. Journal of Accounting Research, 40:21—40.
[14]
Brown, S., & Hillegeist, S. A. (2007). How disclosure quality affects the level of information asymmetry. Review of Accounting Studies, 12(2-3), 443-477.
[15]
Buzby. S. L. (1974). ''Selected items of information and their disclosure in annual reports" The Accounting Review. 423-435.
[16]
Chang, L. S., K. S. Most, and C. W. Brain (1983). The utility of annual reports: an international study, Journal of International Business Studies, Vol. 14, No. 1, pp. 63-84.
[17]
Ceft, A. R. (1961). Corporate Reporting and Investment Decisions, The University of California Press.
[18]
Chen, K., Chen, Z., and Wei, K., (2009). Legal protection of investors, corporate governance, and the cost of equity capital. Journal of Corporate Finance, 15: 273–289.
[19]
Diamond, D. W., & Verrecchia, R. E. (1991). Disclosure, liquidity, and the cost of capital. Journal of Finance, 46, 1325–1360.
[20]
D’Souza J., K. Ramesh, and M. Shen, (2010). Disclosure of GAAP Line Items in Earnings Announcements. Review of Accounting Studies 15: 179-219.
[21]
Dye, R., (2001). An Evaluation of "Essays on Disclosure" and the Disclosure Literature in Accounting, Journal of Accounting and Economics 32, 181-235.
[22]
Easterby-Smith, M., R. Thorpe and A. Lowe (1991). "Management research: An introduction".
[23]
Erlynda Y. Kasim. (2015). Effect Of Implementation of Good Corporate Governance And Internal Audit of The Quality of Financial Reporting And Implications of Return of Shares, International Journal of Scientific & Technology Research., 4, Issue 09, 2277-8616.
[24]
Espinosa, M., &Trombetta, M. (2007). Disclosure interactions and the cost of equity capital: Evidence from the Spanish Continuous Market. Journal of Business Finance and Accounting, 34 (9&10), 1371-1392.
[25]
Fairfield, P., R. Sweeney, and T. Yohn., (1996). Accounting Classification and the Predicative Content of Earnings. The Accounting Review 71 (3): 337-355.
[26]
Fakhari, H., Hedayat, T. S. (2011). Study of the relationship between disclosure quality and earnings management of listed companies in Tehran stock exchange (Unpunished master’s thesis) Zahedan, Sistan and Baluchestan University, Iran.
[27]
Floyd. William (2016). Financial Reporting Quality and Voluntary Disclosure: Evidence from Internal Control Weaknesses. Stanford Graduate School of Business, available at: stanford.box.com/floyd-jmp.
[28]
Haddad, N. M., Crutsinger, G. M., Gross, K., Haarstad, J., Knops, J. M. H. &Tilman, D. (2009). Plant species loss decreases arthropod diversity and shifts tropic structure. Ecol. Lett., 12, 1029–1039.
[29]
Haniffa, R. M., & Cooke, T. E. (2002). Culture, corporate governance and disclosure in Malaysian corporations, Abacus, 38(3), 317–349.
[30]
Hassan, O. A. G., Romilly, P., Giorgioni, G. & Power, D. (2009) The value relevance of disclosure: Evidence from the emerging capital market of Egypt. The International Journal of Accounting 44 (1), 79-102.
[31]
Hassan, MK (2008). ‘The development of accounting regulations in Egypt: Legitimating the International Accounting Standards’, Managerial Auditing Journal, vol. 23, no. 5, pp. 467–484.
[32]
Healy, P., Hutton, A., &Palepu, K. (1999). Stock performance and intermediation changes surrounding sustained increases in disclosures. Contemporary Accounting Research, 16, 485–520.
[33]
Healy, P., Palepu, K., (2001). Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical literature, Journal of Accounting & Economics 31, 405-441.
[34]
Heflin, F., Shaw, K. W., & Wild, J. J. (2005). Disclosure policy and market liquidity: Impact of depth quotes and order sizes. Contemporary Accounting Research, 22, 829–866.
[35]
Hossain, M. & Hammami, L. (2009). Voluntary disclosure in the annual reports of an emerging country: The case of Qatar. Advances in Accounting, incorporating Advances in International Accounting 25, 255-265.
[36]
Hossain, M. & Reaz, M. (2007). Determinants and characteristics of voluntary disclosure by Indian banking companies. Corporate Social Responsibility and Environmental Management Corp. Soc. Responsibility. Environment Management 14 (5), 274-288.
[37]
Hove, M. R. (1989). The Inappropriate Uses of International Accounting Standards in Less Developed Countries: The Case of International Accounting Standards Number 24 Disclosures Concerning Transfer Prices‟, International Journal of Accounting, Vol. 24, 1989, pp. 165-179.
[38]
Hussainey, K., & Walker, M. (2009).The effects of voluntary disclosure and dividend propensity on prices leading earnings. Accounting and Business Research, 39(1), 37-55.
[39]
Gibbins, M., Richardson, A., & Waterhouse, J. (1990). The Management of Corporate Financial Disclosure: Opportunism, Ritualism, Policies, and Processes. Journal of Accounting Research, 28(1), 121-143.
[40]
Guay, W., Samuels, D., and Taylor, D. (2015). Guiding Through the Fog: Financial Statement Complexity and Voluntary Disclosure. Working Paper - University of Pennsylvania.
[41]
Iatridis, G. (2008): Accounting disclosure and firms' financial attributes: Evidence from the UK stock market. International Review of Financial Analysis No. 17, pp. 219–241.
[42]
Jegadeesh, N., J. Livnat. (2006). Revenue Surprises and Stock Returns. Journal of Accounting & Economics 41: 147-171.
[43]
Johnson, P., &Duberley, J. (2000). Understanding management research: an introduction to epistemology. London, SAGE Publications.
[44]
Lang, M., Lundholm, R., (1993). Cross-sectional determinants of analyst ratings of corporate disclosures. Journal of Accounting Research 31, 246–271.
[45]
Larson, R. K. (1993), “International accounting standards and economic growth: an empirical investigation of their relationship in Africa”, Research in Third World Accounting, Vol.2, pp. 27-43.
[46]
Larson, R. K. & Kenny, S. Y. (1995) „An Empirical Analysis of International Accounting Standards, Equity Markets and Economic Growth in Developing Countries‟, Journal of International Financial Management and Accounting, Vol. 6, No. 2,pp. 130-157.
[47]
Leuz, C., &Verrecchia, R. (2000). The economic consequences of icreased disclosure. Journal of Accounting Research, 38(Supplement), 91-124.
[48]
LotfiAmmen,(2007). Accounting theory , measurement and financial report , second edition, Al Dar Al Jmeea , Alexandria
[49]
Kanakriyah R,.(2013). The effect of Asset Impairment (IAS 36) in Improving the Quality of Accounting Information According to Users’ Perspective: Evidence from Jordan. Doctoral Thesis, Durham University, UK
[50]
KarbasiYazdi, H. (2007). Accounting theory. Tehan: Imam Khomeini Relief Foundation.
[51]
Katmon N, Farooque O. (2012). Disclosure Quality, Corporate Governance and Earnings Management.
[52]
Malekian, E., Adili, M., Emrahimian, S. J., &AmirpourMola, R. (2011). The relationship between disclosure quality and cost of capital of listed companies in Tehran stock exchange (Unpunished master’s thesis). Zahedan, Sistan and Baluchestan University, Iran.
[53]
Mouselli, S., Jaafar, A., and Goddard, J. (2010). "Is Accruals Quality Priced in the UK "Working Paper.
[54]
Norman, K. D. and S. L. Yvonna (2005). The Sage handbook of qualitative research, Sage Publications, Inc.
[55]
Oppenheim, A. N. (2000). Questionnaire design, interviewing and attitude measurement, Pinter Pub Ltd.
[56]
Pankaj, M. (2007). Role of voluntary disclosure and transparency in financial reporting.
[57]
Peasnell, K. V. (1982) ‘Some formal connections between economic values and yields and accounting numbers’, Journal of Business Finance & Accounting, 9(3): 361-381.
[58]
Perera, M. H. B. (1989). "Accounting in developing countries: a case for localized uniformity". The British Accounting Review 21(2): 141-157.
[59]
Petrova Elena (2012). "Relationship between Cost of Equity Capital And Voluntary Corporate Disclosures"International Journal of Economics and Finance Vol. 4, No. 3.
[60]
Pamela Kent. P and Stewart. J (2008). Corporate Governance and Disclosures on the Transition to International Financial Reporting Standards. Accounting & Finance, 48, (4), 649-671.
[61]
Robert W. Ingram, Thomas L. Albright, John W. Hill., (2002) Managerial accounting: information for decisions
[62]
Rose, J. M. (2001). "The Effects of Multimedia-Induced Affective States on Recall and Decision-Making by Individual Investors." InternationalJournal of Accounting Information Systems 2: 22-40.
[63]
Rose, J. M., F. D. Roberts and A. M. Rose (2004). "Affective Responses to Financial Data and Multimedia: The Effects of Information Load and Cognitive Load." International Journal of Accounting Information Systems 5: 5-24.
[64]
Ryan, J. B. (1990). New Zealand Company Financial Reporting, University of Auckland.
[65]
Samuels, J. M. and Oliga, J. C. (1982). “Accounting standards in developing countries”, International Journal of Accounting Education and Research, pp. 66-88.
[66]
Sepasi, S., Kazempour, M., Mansourlakoraj, R., (2016). Ownership Structure and Disclosure Quality: Case of Iran, Procedia Economics and Finance, 1st International Conference on Applied Economics and Business, 36(1): 108-112.
[67]
Setayesh, M. H., & Kazemnezhad, M., (2010). Disclosure in accounting. Accountant Quarterly, 8, 227, 66-99.
[68]
Shiri, M. MSalehi. M, and Radbon. A (2016). A Study of Impact of Ownership Structure and Disclosure Quality on Information Asymmetry in Iran, the journal for decision making.
[69]
Singhvi, S. S., and Desai, H. B. (1971). An Empirical Analysis of Quality of Corporate Financial Disclosure. The Accounting Review, January, 129-138.
[70]
Shuping Chen, (2016). A New Measure of Disclosure Quality, Working paper Harvard law school forum of corporate governance and financial regulation.
[71]
Street, D. and Gray, S. (2001). Observance of International Accounting Standards: Factors ExplainingNon-Compliance (London: Association of Chartered Certified Accountants, ACCA Research Report (74)).
[72]
Susela, S. D. (1999), “Interests and accounting standard setting in Malaysia”, Accounting Auditing & Accountability Journal, Vol.12 No.3, pp.358-387.
[73]
Sweiti M. Ibrahim & Dr. Attayah F. Osama (2013). Critical Factors Influencing Voluntary Disclosure: The Palestine Exchange “PEX” Double Blind Peer Reviewed International Research Journal 13(6).
[74]
Taylor and Renner (2003). "Analyzing Qualitative Data Analysis".
[75]
Wallace, R. S. O. (1993). Development of Accounting Standards for Developing and Newly Industrialized Countries, Research in Third World Accounting, Vol. 2, 1993, pp. 121-165.
[76]
Wang Hwei Cheng, Hsain-Jane Chang,(2008).''The association between accounting information disclosure and stock price ''.Global journal of business research. 2,(2) 1–10.
[77]
Wang, K, Sewon, O & Claiborne, C (2008). ‘Determinants and consequences of voluntary disclosure in an emerging market: Evidence from China’, Journal of International Accounting, Auditing and Taxation, vol. 17, no. 1, pp. 14-30.
[78]
Welker, M. (1995). Disclosure policy, information asymmetry and liquidity in equity markets. Contemporary Accounting Research 11: 801-828.
[79]
Yuen, C.Y., Liu, M., Zhang, X., Lu, C. (2009). A case study of voluntary disclosure by Chinese enterprises. Asian Journal of Finance and Accounting 1:2, 118-145.
[80]
Yusoff, N. H., Hanefaf, M. M. (1995). Malaysian institutional investors’ annual reports information needs. Malaysian Management Journal 1:2, 41-49.
Open Science Scholarly Journals
Open Science is a peer-reviewed platform, the journals of which cover a wide range of academic disciplines and serve the world's research and scholarly communities. Upon acceptance, Open Science Journals will be immediately and permanently free for everyone to read and download.
CONTACT US
Office Address:
228 Park Ave., S#45956, New York, NY 10003
Phone: +(001)(347)535 0661
E-mail:
LET'S GET IN TOUCH
Name
E-mail
Subject
Message
SEND MASSAGE
Copyright © 2013-, Open Science Publishers - All Rights Reserved