Mandatory Disclosures in GCC Listed Firms

I-Introduction

Companies need their investors to trust their reporting’s to remain part of the global market. For attracting more investors, and for gaining their trust, companies disclose information a mandatory basis (Schuster & O’Connell, 2006). The IASB issues International Accounting standards to increase the comparability of the companies around the world (Choi & Meek, 2002). The European Commission has required all the listed companies to organize their consolidated financial reports by the IASs/IFRSs from January 1^st of 2005 (Euopean Commission, 2018). However, many companies claiming to adopt the regulations have been found as being non-compliant with the IASs/IFRSs (Street & Gray, 2001; Glaum & Street, 2003). Auditors are even found to state that financial statements conform with the regulations even when the notes and accounting policies of the firms indicate otherwise (Cairns, 1997). It raises questions on the effectiveness of the enforcement bodies (Glaum & Street, 2003).

There are several studies (Ettredge et al, 2002) (Ettredge, Richardson, & Scholz, 2002), (Brennan & Hourigan, 2000), (Haniffa & Cooke, 2002) which have focused on investigating the association between the level of corporate characteristics, reporting disclosures, corporate governance, ownership structure factor and cultural aspects. Even with all the research on the company’s financial reporting, there is limited data on the firm’s information disclosure in the member country firms of GCC. It calls for the evaluation of the level of mandatory disclosure of the GCC nation companies and the driver of these disclosures.

GCC or Gulf Cooperation Council was established in 1981 which aimed at enhancing the economic collaboration and development in their region (Al-Shammari, 2006). The states which are a member of this council include UAE, Saudi Arabia, Kuwait, Qatar, Oman, and Bahrain. All member states have adopted the IAS to comply with local and foreign investor needs (Al-Shammari, Brown, & Tarca, 2008).

Firms need to attract investors from the international markets to raise more investments. For this purpose, the firm chooses to add more information on its reports to better educate its investors for decision making (Meek, Roberts, & Gray, 1995). The increasing trend of financial disclosure has caused concerns over the value and number of the disclosed information (Schuster & O’Connell, 2006). Firms believe that compliance with mandatory disclosure requirements can be beneficial for it in the long run. There are several benefits of complying with international regulations. Advantages like reduced reporting costs, increased consistency across firms, increased comparability among foreign companies, aid in cross-border acquisitions and joint ventures, and increased transparency and objectivity makes companies adopt this practice.

This study is aimed at investigating the extent of mandatory disclosure in GCC Countries with IFRSs from 2010 to 2013. It is focused on identifying the determinants of the GCC listed firm’s annual report’s mandatory disclosures. It investigates empirically the relationship between the firm-specific properties and the extent of mandatory reporting of disclosures in the GCC member state firms.

a-Research Question & Method

The research questions which are going to be addressed through this study are.

1. To what degree do GCC member countries firms report disclosures that are mandatory?
2. To find the determinants of these mandatory disclosures in GCC member states listed firms?
3. Why and how do these determinants of mandatory disclosures vary across the listed firms of the GCC countries?

These research questions are vital to be answered to understand whether mandatory disclosures have improved and also to identify the determinants which aid in explaining the differences in the extent of mandatory disclosures in the firms of the listed members of GCC. The findings of these questions will be of interest to the GCCAAO in the organization’s dedicated efforts to harmonize the regulations in the GCC region. The results of the study would help find the level of compliance of GCC member firms with IASs/IFRSs and the factors that lead to higher level of disclosures.

Mandatory disclosure refers to the disclosure of an item which must be reported in the financial reports of the company as complying with the financial reporting requirements. The level of both categories of disclosures in the GCC member state firms is examined in this research. In the past, several studies on the mandatory disclosure on the developed countries have been conducted (Street, Gray, & Bryant, 1999; Street & Bryant, 2000; Street & Gray, 2001; Glaum & Street, 2003). This study will extend the text to add developing states and GCC states in it as well.

The research would use a sample of top 20 nonfinancial listed firms which were selected as based on their market weight index for all of the GCC stock index market from the years 2010 to 2013. The annual financial reports of these 20 GCC member state firms act as the primary sources of data for this research. The level of disclosure is examined by comparing it with the 24 IASs/IFRSs mandatory disclosure reporting standards, and 325 mandatory disclosure constituents as based on the relevancy and applicability to the business situation over this period in the GCC member states.

The dependent variables that are computed for this research is the mandatory disclosure index that is utilized for the investigation of the association between the level of mandatory disclosure reporting and the characteristics which clarify the differences in disclosure. The independent variables for the study include the corporate characteristic factors, ownership structure factors, corporate governance factors, and cultural factors (manager’s personal characteristics). This study is going to compute the disclosure index for capturing the whole array of the corporate disclosures in the financial reports of the company (Barako, 2007). As consistent with the research on mandatory disclosures (Cooke T. E., 1989; Cooke, 1991; Cooke T. E., 1992; Tower, Hancock, & Taplin, 1999; Street & Gray, 2001; Street, Gray, & Bryant, 1999) (Glaum & Street, 2003; Al-Shammari, Brown, & Tarca, 2008) the indices would help in the measurement of the degree of the mandatory disclosure of the company listed in GCC countries via their annual reports. The rank of 1 is given to an item if it is disclosed in the annual report and 0 if it is not disclosed. Simple multivariate OLS (Ordinary Least Squares) analysis is utilized to measure the degree of the mandatory disclosures in the GCC listed companies against the independent variables.

II-Theoretical Framework and Hypothesis Development

a-The financial reporting Environment and Compliance in GCC Countries with IFRSs/IASs

The analysis of the legal frameworks of the corporate reporting in the GCC companies is important for this study. This is important as this plays important part in the identification of the financial reporting regime, the enforcement of the accounting standards, establishment of the process for monitoring of the standards of accounting and its effect on the level of conformity with these standards. The GCC Countries have a great deal in common; however, in terms of the implementation of the IFRSs/IASs, several differences are evident as well. For the countries of Kuwait, Bahrain and Oman, IAS was adopted as the mandatory accounting standards in 1991, 1996 (A Al-Hussaini, 2008) and 1986 (Shuaib, 1998) respectively. However, since 2005 (IFRS, 2016), 2001 (IFRS, 2016) and 1986 respectively for Kuwait, Bahrain and Oman, IFRS has been adopted by all listed firms for their mandatory accounting standards. For these three countries (Kuwait, Bahrain and Oman), the Departments of Surveillance of the Commerce Ministries are responsible for the monitoring of the compliance of the listed firms. The compliance monitoring in these countries is much relying on the report of the external auditors. The stock markets are a part of monitoring in Oman and Kuwait but not in Saudi Arabia. The Central Banks of these three countries supervise the banks, investment and financial firms and is dependent on the External auditor reports on compliance of the firms for the monitoring of compliance with IFRSs/IASs and all other regulations. All this is also same for the countries of Qatar, Saudi Arabia and UAE other than the fact that different Surveillance Departments are responsible for the examination and supervising of the reporting of activities of the firms; Ministry of Commerce & Economy is responsible for monitoring in Qatar (Qatar Central Bank, 2017), Saudi Organization for Certified Public Accountants under Commence Ministry in Saudi Arabia (Saudi Organization for Certified Public Accountants, 2018), Central Bank, Ministry of Commerce and Securities and Commodities Authority together in UAE). For Saudi Arabia, SOCPA standards were adopted in 1991 and are still required to be complied with for all listed and unlisted firms except for the Banks and investment and finance firms which are required to comply by IFRS since the year 2008. In terms of Qatar and UAE (A Al-Hussaini, 2008) the IAS was adopted in 1995 and 1999 respectively for mandatory accounting standards for banks, investment firms and finance firms. All listed firms are required to comply by IFRS in these two countries since 2002 and 2003 respectively (Al-Shammari B. A., 2006).

The depth of the audit function is not similar in all the countries of GCC. Several factors like the existence of influencing monitoring body or the registration requirements for the auditors has effect on the capability of the external auditors to identify the non-compliance instances in companies. The willingness of the enforcement organization to investigate any legislation and impose penalty on the external auditor for not reporting the non-compliance instance shows its effectiveness. This explains that differences in the extent of compliance with IFRS or vice versa is expected in the different member states.

The provision for the monitoring of compliance with IFRSs in the firms of all states differs as well. Other than Oman and Kuwait, all member states rely on the external auditor report. These two countries have their own monitoring bodies. Furthermore, proactive monitoring is also only evident in these two countries only. Reactive monitoring is evident if enough shareholders complain. The appointment of another external auditor is the action taken as reactive monitoring which is evident in all countries except in Oman state. The provisions for the conformity check is less rigorous in Qatar, UAE, Bahrain, and in Saudi Arabia because of the lack of funding of their Surveillance Departments, lack of training by professionals & lack of funds for attracting qualified staff.

The disparity in the range of compliance with the IFRSs in GCC countries can be blamed on the fact that the regulations are not enforced uniformly among the GCC states. The state of Qatar does not have any effective body for enforcement while the Saudi and UAE states monitor against some regulations. This shows that UAE and Saudi might have better compliance level as compared to Qatar. Similarly, the compliance level of Kuwait and Oman states with IFRSs is expected to be better than Bahrain. Hence, Oman and Kuwait is expected to show higher level of compliance with IFRSs as compared to other member states.

The range of the compliance in the GCC member countries is expected to increase over time only if the enforcement is increased as well. In recent years, Qatar and Saudi Arabia has made it mandatory for companies to require two external auditors to audit the accounts. UAE has not yet enforced any such requirements, but it is a common practice in this state as well. The enforcement bodies have been much active in Oman and Kuwait recently in monitoring the compliance of firms with IFRSs while the shareholders in Bahrain have begun raising questions on possible violations of the regulations. All this suggests that states have been becoming more aware of their statuary rights in recent times.

GCC states are oil dependent states which are extremely vulnerable to the change in oil prices. It is evident that the GCC countries have shown high level of inflation (mean inflation rate for GCC states in 9.10%) with increment in their growth rate of GDP (mean GDP growth rate for GCC states is 0.13%) and in their GDP during 2010 to 2012. In 2013, the fall in oil prices may have started a new recession period. The foreign direct investment in the GCC Countries increased during this period due to the fixed exchange rate. Saudi Arabia was the state with 21.14 million of highest population and $50 billion value of traded shares and Bahrain as the state with lowest value of traded shares ($1.10 billion) and 131 million populations. The oil revenue was found to be increasing sharply in GCC countries in the last two decades as it is one of the major exports for them. During the period of 2010-2013, the total exports of the services and goods by GCC countries had been $431 Billion. UAE with $92.80 billion had the highest mean export of goods followed by Bahrain with $74.10 billion, Kuwait with $71.40, Qatar with $70.60 billion, and Oman with $69.40 billion and Saudi Arabia with $53.10 of total exports.

The difference in the macroeconomic indicators can be one reason of the difference in the financial disclosures of the GCC member states listed firms.

b-The Extent of Mandatory Disclosure

The theoretical support for corporate mandatory disclosure

Regulatory and Free Market Theories

Scholars have argued that there is no general agreement on the range of the mandatory disclosures that would be optimal for the firms to provide. The debate on whether any regulation is needed or not is quite evident in the literature. There are two conflicting schools of thought on the matter. The one side states that regulation is needed while the other school of thought argues that it is not needed. The regulatory theorists argue that the regulations are the response that is supplied to the demand of the public in order to balance the inequitable practices of the market (Deegan & Unerman, 2011). This school of thought is criticized on the fact that these regulations can be controlled by specific interest groups. The other school of thought considers that disclosure range can be balanced only be the market forces of demand and supply like that for other markets (Posner, 1974). The Free-market theorists believe that the market will lead everyone to optimal level (Scott, 2003).

Costs-based theories

Cost theories build on the assumption that management considers the tradeoff between the indirect and direct costs and its yielding benefits when making decisions on complying with mandatory disclosures. These theories include the information costs theory and the political costs theory (Benston, 1985). All direct costs related to disclosure regulation increase with its introduction. These costs can become influencing in the decision making of the management for compliance with disclosure regulations. Similarly, the indirect costs arising from the disclosures can provide more incentive to non-compliance (Leventis & Weetman, 2004). Even though there is expectation of a strong association between information expenditure and disclosures the literature on the subject does not allow predicting such association (Dye, 1986; Verrecchia, 1983).

The political cost theory defines the costs with government confiscating the wealth from the companies and to distribute it to other segments of the society (Foster, 1986; Watts & Zimmerman, Positive accounting theory, 1986; Watts & Zimmerman, 1978; Watts & Zimmerman, 1990). This provides another underpinning for the level of the mandatory disclosures. These costs may force a company to disclose less information (Wallace R. S., 1987; Wallace, Naser, & Mora, 1994; Naser & Wallace, 1995); however, the level of association among these variables (political costs and mandatory disclosure of a company) is difficult to be predicted.

Agency theories

This is one other theory which is widely used in the literature (Cooke T. E., 1989; Firth, 1980; Chow & Wong-Boren, 1987; Hossain, Tan, & Adams, 1994; Marston & Polei, 2004; Akhtaruddin, 2005; Bhuiyan, Ullah, Biswas, & Chowdury, 2007; Aljifri, 2008; Nurunnabi & Hossain, 2012) for disclosures reporting. This is related to the association between the principals and agents. The agency theory builds on the platform that problems arise due to the separation of management and ownership in the firm. It argues that this separation creates conflicts among the agents and principals. It is based on the presumption that the agents are relatively free in making decisions and this agency framework offers several risks. The agency costs of the equity can decline the value of the firm when the principals have the belief that the agents are not pursuing optimal decisions in the interest of the principals. It has been stated that one possible method of dropping the agency costs is to disclose more information on the economic reality of the firm. The arguments against the agency theory show that improved disclosures decline the agency costs which arise from the asymmetry of information and builds the strong standing of the management (Morris, 1987). This shows that management can feel motivation for providing higher disclosures.

Market based theories

Market based theories include the capital need theory, the signaling theory, as well as the efficient market theory. The signaling theory builds on the extension of the agency theory (Meckling & Jensen, 1976). It shows that the information asymmetries in the market can be reduced by signaling information to the market. This implies that companies with higher values would raise their disclosures with the purpose of increasing the share prices. On the contrary, the companies with lower firm value would remain silent (Akerlof, 1970). This will be perceived as bad information and would devalue the shares of the firm and put pressure on it to disclose information. The increase in disclosures and transition to IFRS needs the companies with good firm value in the GCC member states to differentiate themselves from others by signaling the information.

The capital need theory hypothesizes that the main driver of the firms to have more disclosures is its requirement to raise more capital (Abd-elsalam, 2008). The literature (Welker, 1995; Botosan, Summary Disclosure Level and the Cost of Equity Capital, 1997; Francis, Khurana, & Pereira, 2003; Sengupta, 1998; Rashid, 2000; Botosan & Plumlee, 2002; Hail, 2002; Kothari & Short, 2003; Gietzmann & Ireland, 2005) shows that there is a negative association among the disclosures and cost of capital. However, there are studies that show none or positive relationship as well. The higher disclosure leads to reduced costs of capital, enhanced stock liquidity and reduced estimation risks (Horngren, 1957, Choi F. D., 1973; Galai & Copeland, 1983; Barry & Brown, 1985; Diamond & Verrecchia, 1991; Lang & Lundholm, 1993). Compliance with IAS disclosures has effect on the cost of capital. This provides the incentive to managers to have better mandatory disclosures for attracting more investors.

Market efficient theory is the most popular among these which is concerned on the way market processes and absorbs information (Fama, 1970). There are three types of market efficiency. The weak state depicts the price of the share with reflection on a point in time which is same as the historical price progression. The strong state is the one in which the share price is reflective of all public information on a firm. The semi-strong state shows the reflection of the publicly available information on a firm in its share price while the strong state shows all the available information reflected in its share price (Keane, 1993). As per Keane (1993), the market needs a fairly strongly regulated accounting and auditing profession, clear information needs of the participants of the market and quick distribution of the information in market. The GCC country’s accounting and auditing profession is strong relatively and is playing an important role in the practices in region. The stock market is developing and is now open to foreign investment. This implies that the share price reflects currently available information in the market.

Mandatory disclosure indices in developed & developing states

It is important to analyze the literature on empirical exiting studies which measured the range of mandatory disclosure indices in the developed states of world. The study of theories used in the development of these indices is also important to be analyzed. The summary of all studies analyzed for this research shows that of the total 17 studies, seven analyzed the extent of mandatory disclosures during and before the 1990s while 10 remaining research were identified as during and after 2000. These mostly cover the developed capital markets. Fourteen out of the seventeen studies analyzed shows similar index method which is the un-weighted disclosure index (Cooke T. E., 1992; Street & Gray, 2001; Glaum & Street, 2003; Patton & Zelenka, 1997; Owusu-Ansah & Yeoh, 2005).

This technique is utilized to compare the checklist for the disclosure items with the annual reports inside material. The difference among the indices of mandatory disclosure among the developed market is very evident. This is mainly because of the lack of attribution to a theory for basing the type or number of the items including in mandatory disclosure index. The amount of the items for the mandatory disclosure on the indices vary from 16 key items to 66 mandatory disclosure items and to even 495 items as well. The majority of the indices used un-weighted disclosure indices. Older studies used un-weighted disclosure indices showing the views on the financial analysts, investors, and other stakeholder’s information items. One study by Patton and Zelenka (1997) tested 50 stocks in the Prague Stock Exchange and used the dichotomous approach. They included the items which were applied on most companies (narrow index). They also introduced other indices which also included the items that were subject to Not Applicable item and is considered as (broad index). The Cooke method of disclosure indices used the un-weighted method which calculated the proportion of the sum of items disclosed with the most items that can be possibly disclosed for a firm. Then there is the Partial Compliance method which calculates the degree of conformity is calculated by addition of the degree of conformity for each of the regulations and dividing it with the total applicable regulations for the company. The Cooke method has yielded higher score of disclosure (83%) then the PC method.

There are also group of studies which used both un-weighted and weighted approaches (Hodgdon, Tondkar, Adhikari, & Harles, 2009). The weighted technique as the addition of the weighted disclosures given divided by the addition of the weighted disclosures needed to be provided. The weighted disclosure studies indicated variety in the degree of the disclosures in the companies complying with IFRS while the mean disclosure levels for weighted method have been 50% in 2000 and 45% in 1999. Then there are other studies also applying both methods which show no significant variation between each.

The reliance on the studies on the disclosure theories is important in analyzing the reason of understanding the determinants of the organization decisions for disclosures. The studies have used agency theory, regulatory and free market, and information and political costs theories, capital need, signaling and efficient market theory for their calculations. Even though all the studies used different samples for varying periods while the majority applied the un-weighted disclosure indices, it may incline the subjectivity level of the results. However, all studies had similar broad conclusions. All companies do not fulfill fully with the disclosure requirements of IAS in the developed states of world. In fact, mandatory disclosures are not much close to 90% with majority repotting an average of the disclosure level at 70% to 80%.

In terms of the mandatory disclosures studies on developing countries, 26 studies  (Nicholls & Ahmed, 1995; Wallace, Naser, & Mora, 1994; Al-Mulhem, 1997; Craig & Diga, 1998; Owusu-Ansah, 1998; Tower, Hancock, & Taplin, 1999; Naser, Al-Khatib, & Karbhari, 2002; Abd-Elsalam & Weetman, 2003) (Al-Shiab, 2003; Naser & Nuseibeh, 2003; Ali, Ahmed, & Henry, 2004; Akhtaruddin, 2005; Hassan, Giorgioni, & Romily, 2006; Abdelsalam & Weetman, 2007; Convor & Dahawy, 2007; Aljifri, 2008) (Al-Shammari, Brown, & Tarca, 2008; Harless, Smith, Tondkar, & Peng, 2008; Dahawy K. , 2009; Al-Akra, Eddie, & Ali, 2010; Dahawy, Shehata, & Ismail, 2010; Alanezi & Albuloushi, 2011; Hassan M. , 2013; Agyei-Mensah, 2013; Alfraih, 2016) are identified out of which 20 studies bases its sample during and after 2000, 6 studies belonged to year 1990s. The 25 studies of these 26 studies have used un-weighted disclosure index method. The literature review shows varying differences in the disclosure indices in the developing countries studies because of the absence of the theory providing base to the information incorporated in the disclosure index. The range of disclosure items on the index ranged from a minimum of 20 items to 530 in one study as maximum. Only one study has applied the weighted and un-weighted disclosure index with 56 items of disclosure. Most of the studies used self-build indices which is applicable to the surroundings of the firm while the others used existing ones. Generally, the level of disclosure in the developing states is much worse as compared to the developed states. The norm is more of using a small sample size as well except for some studies. Hence, the majority of the studies had the same conclusion. It is regular for the companies in developing states to not comply with IAS requirements of disclosure. The average disclosure levels are near 60% to 70% for the developing countries.

In terms of GCC countries fulfillment with IFRS/IAS there is only 1 study which shows the compliance of the firms as mandated by IAS. The disclosure level shows level at 68% in 1996 and 82% in the year 2002. UAE has the highest level of disclosure level at 80% which is followed by Saudi Arabia at 78%, Kuwait at 75%, and Oman at 74%, and Bahrain at 73% and lastly is Qatar with 70% degree of disclosure conformity with IAS. The findings of the conformity with mandatory disclosures show that companies are needed to observe the requirements of the disclosure, but they hardly ever do so. These results of the study show that the improvement of the quality of the financial reporting is questionable in the GCC countries after their implementation of IFRS.

The determinants of mandatory disclosure in developed and developing countries

Analysis of empirical studies is also needed to know the determinants of mandatory disclosure. The existing findings on the determinants that have been utilized for the measurement of the mandatory disclosure in both developed and developing countries are going to be discussed here.

The following determinants are found to be significantly positively related with the level of mandatory disclosure across the developed country firms; Firm size (Cooke T. E., 1992; Wallace, Naser, & Mora, 1994; Patton & Zelenka, 1997; Owusu-Ansah & Yeoh, 2005; Hodgdon, Tondkar, Adhikari, & Harles, 2009); industry type (Cooke T. E., 1992; Street & Gray, 2002); profitability (Patton & Zelenka, 1997; Owusu-Ansah & Yeoh, 2005; Hodgdon, Tondkar, Adhikari, & Harles, 2009); leverage (Cooke T. E., 1992; Hodgdon, Tondkar, Adhikari, & Harles, 2009); multiple listing status (Cooke T. E., 1992; Wallace, Naser, & Mora, 1994; Patton & Zelenka, 1997; Street & Gray, 2002; Glaum & Street, 2003; Hodgdon, Tondkar, Adhikari, & Harles, 2009); Audit Firm Size (Patton & Zelenka, 1997; Street & Gray, 2002; Glaum & Street, 2003; Hodgdon, Tondkar, Adhikari, & Harles, 2009; Owusu-Ansah & Yeoh, 2005) ; firm age and number of shareholders. Liquidity is found to be negatively associated with mandatory disclosure level among the firms in developed countries. Other than this, corporate characteristics including international activities (Hodgdon, Tondkar, Adhikari, & Harles, 2009) and governance factors like proportion of the outside directors are found to be not related with extent of the mandatory disclosures.

In terms of developing countries, the studies have shown that the corporate characteristic variables which can be positively related with the extent of mandatory disclosure level are; firm size (Wallace, Naser, & Mora, 1994; Al-Mulhem, 1997; Craig & Diga, 1998; Owusu-Ansah, 1998; Naser, Al-Khatib, & Karbhari, 2002; Al-Shiab, 2003; Ali, Ahmed, & Henry, 2004; Akhtaruddin, 2005) (Hassan, Giorgioni, & Romily, 2006; Al-Shammari, Brown, & Tarca, 2008; Dahawy, Shehata, & Ismail, 2010; Agyei-Mensah, 2013; Aljifri, Alzarouni, Ng, & Tahir, 2014) ; industry type (Wallace, Naser, & Mora, 1994; Craig & Diga, 1998; Al-Shiab, 2003; Akhtaruddin, 2005; Hassan, Giorgioni, & Romily, 2006; Aljifri, 2008; Al-Shammari, Brown, & Tarca, 2008; Alanezi & Albuloushi, 2011; Aljifri, Alzarouni, Ng, & Tahir, 2014) ; profitability (Al-Mulhem, 1997; Owusu-Ansah, 1998; Naser, Al-Khatib, & Karbhari, 2002; Ali, Ahmed, & Henry, 2004; Akhtaruddin, 2005; Hassan, Giorgioni, & Romily, 2006; Al-Shammari, Brown, & Tarca, 2008) ; leverage (Alanezi & Albuloushi, 2011) ; multiple listing firms (Nicholls & Ahmed, 1995; Al-Mulhem, 1997; Owusu-Ansah, 1998; Ali, Ahmed, & Henry, 2004; Aljifri, Alzarouni, Ng, & Tahir, 2014) ; Audit firm size (Nicholls & Ahmed, 1995; Naser, Al-Khatib, & Karbhari, 2002; Abd-Elsalam & Weetman, 2003; Al-Shiab, 2003; Abdelsalam & Weetman, 2007; Dahawy K. , 2009; Dahawy, Shehata, & Ismail, 2010; Agyei-Mensah, 2013) ; firm age (Owusu-Ansah, 1998; Al-Shammari, Brown, & Tarca, 2008). Other than this, liquidity was found to be negatively influenced with the extent of the mandatory disclosure in developed countries studies (Dahawy, Shehata, & Ismail, 2010; Naser, Al-Khatib, & Karbhari, 2002). Furthermore, the number of ownership structure variables that were positively influenced by the corporate disclosure level includes the government ownership (Abdelsalam & Weetman, 2007) and portion of shares held by the insiders (Owusu-Ansah, 1998). Public ownership (Hassan M. , 2013) was found to be negatively influenced by the extent of the mandatory disclosures in developed countries studies.

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