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The relationship between corporate governance mechanisms and IFRS 7 compliance: evidence from an emerging market

The relationship between corporate governance mechanisms and IFRS 7 compliance: evidence from an... PurposeThis paper aims to investigate compliance with risk disclosure requirements under International Financial Reporting Standard (IFRS 7) by firms listed on the Ghana Stock Exchange (GSE) over a three-year period. Specifically, the paper examines the extent, quality and determinants of risk disclosure compliance with IFRS 7.Design/methodology/approachThe study uses 90 firm-year observations for the period 2011-2013 for firms listed on the GSE. Each annual report was individually examined and coded to obtain the extent and quality of corporate risk disclosure index. Descriptive analysis was performed to provide the background statistics of the variables examined. This was followed by regression analysis, which forms the main data analysis.FindingsThe results indicate that over the three years, the extent of compliance with IFRS 7 is, on average, 53 per cent, which is very low; the quality of the disclosures is, on average, 33 per cent, which is also very low. The regression results suggest that proportion of non-executive director (PNED) is significantly and positively associated with the extent of risk disclosure compliance under IFRS 7. Board size was found to be significantly and positively associated with quality of risks disclosure compliance.Originality/valueThis is the first study in Ghana that considered the impact of corporate governance factors on the extent and quality of IFRS 7 risk disclosure compliance. The findings of this study will help market regulators in Ghana in evaluating the adequacy of the risk disclosures by listed firms. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Corporate Governance Emerald Publishing

The relationship between corporate governance mechanisms and IFRS 7 compliance: evidence from an emerging market

Agyei-Mensah, Ben Kwame
Corporate Governance , Volume 17 (3): 20 – Jun 5, 2017
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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1472-0701
DOI
10.1108/CG-06-2016-0129
Publisher site
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Abstract

PurposeThis paper aims to investigate compliance with risk disclosure requirements under International Financial Reporting Standard (IFRS 7) by firms listed on the Ghana Stock Exchange (GSE) over a three-year period. Specifically, the paper examines the extent, quality and determinants of risk disclosure compliance with IFRS 7.Design/methodology/approachThe study uses 90 firm-year observations for the period 2011-2013 for firms listed on the GSE. Each annual report was individually examined and coded to obtain the extent and quality of corporate risk disclosure index. Descriptive analysis was performed to provide the background statistics of the variables examined. This was followed by regression analysis, which forms the main data analysis.FindingsThe results indicate that over the three years, the extent of compliance with IFRS 7 is, on average, 53 per cent, which is very low; the quality of the disclosures is, on average, 33 per cent, which is also very low. The regression results suggest that proportion of non-executive director (PNED) is significantly and positively associated with the extent of risk disclosure compliance under IFRS 7. Board size was found to be significantly and positively associated with quality of risks disclosure compliance.Originality/valueThis is the first study in Ghana that considered the impact of corporate governance factors on the extent and quality of IFRS 7 risk disclosure compliance. The findings of this study will help market regulators in Ghana in evaluating the adequacy of the risk disclosures by listed firms.

Journal

Corporate Governance – Emerald Publishing

Published: Jun 5, 2017

References

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  • Prospect and challenges of corporate governance in Ghana
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  • Enterprise risk management: an empirical analysis of factors associated with the extet of implementation
  • The incentives for voluntary audit committee formation
  • Corporate disclosure practices, institutional investors, and stock return volatility
  • Open versus closed conference calls: the determinants and effects of broadening access to disclosure
  • The disclosure of risk in financial statement