Mardini, ownership diffusion, firm size and growth can

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Last updated: December 22, 2019

Mardini, Tahat and Power (2013)in their article titled “Determinants of segmental disclosures: evidence fromthe emerging capital market of Jordan” aimed to determine the factors thatinfluenced the segment disclosures of Jordanian companies. To examined companyattributes and their influence on segment disclosure,three disclosure indices were developed based on mandatory, voluntary and totalsegment disclosure. The results of the study indicate that firm size and an audit firm are significantly associated withmandatory segment disclosure while voluntary and total segment disclosure were found to be significantly associated withfirm size, audit firm type andprofitability. The authors conclude from the results that profitable firms usesegment disclosures as a positive signal to stakeholders about theirperformance in order to reduce information asymmetry between firms and capitalproviders. These results have implications for both international and nationalregulatory bodies in Jordan.Ibrahim (2014)in his article titled “Firm Characteristics and Voluntary Segment Disclosureamong the Largest Firms in Nigeria” attempted to explain the disclosure ofsegment information in the annual reports of Nigerian companies by reference tospecific characteristics of those companies. An extensive literature was soughtto establish whether variables such as firm age, profitability, ownershipdiffusion, firm size and growth candetermine firms’ disclosure practices.

The author established that bothindustry type and firm size are significantly associated with the extent ofsegment disclosure, whereas such an association could not be proved withlisting age, growth, profitability and ownership diffusion. In addition, theresult indicated that there is a tendency for firms to disclose more segmentinformation in the post-adoption periodof IRFS 8 on operating segments through increase reliability of the amount ofinformation in the Company’s annual report.Hawashe (2014)in his thesis titled “An Evaluation of Voluntary Disclosure in the AnnualReports of Commercial Banks: Empirical Evidence from Libya” studied to examine bank-specific attributes and their influence onsegment disclosure. This study aimed todetermine which of the factors such as firm age, firm size, profitability,liquidity, government ownership, foreign ownership and listing status were significantly related to increased segmentdisclosure. The author used the un-weighted disclosure index on a sample of 9banking companies of Libya. To measure the association between the variables,the author used multiple regression analysis.

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The findings of the study showedthat there was an improvement in the general level of voluntary disclosure.Company attributes such as bank size measured in terms of total assets andlisting status had a significant association with the disclosure level ofvoluntary information. Limitations were also revealed with regard toself-constructed disclosure index, sources of information and small samplesize.Altaf (2014)in his article on “Impact of Segment Reporting on Stock Market Performance” donean empirical study to examine the impact of segment disclosure on stock marketperformance with the use of regression analysis. It was observed in the studythat EPS and Book value of shares were statistically significant with segmentdisclosure.

In contrast, the results showed that business segment andgeographical segment have no significant impact on segment disclosure asmeasured by regression analysis.Kumar & Sridharan(2014) in their article titled “Segment Reporting: TheDisclosure Practice of Indian Listed Companies among Select Industries”conducted a study to investigate whether the extent of segment disclosure hasimproved as a result of the adoption ofAS-17. They took a sample of 125 companies from six different industries listedon two stock exchanges (i.e.

Bombay stock exchange and National Stock Exchange)for the year 2001-02 to 2011-12. They used un-weighted disclosure index tomeasure the compliance. The results of this study indicate that the level ofdisclosure of different industries has significantly increased over time.Hollie and Yu (2015)in their article on “A Perspective on Segment Reporting Choices and SegmentReconciliations” reviewed the history of segment reporting, its value relevanceand the importance of segment reporting to management. Concerning the valuerelevance of segment reconciliations, they provide evidence supportingreconciliations being more value relevant and beneficial in the future.

Obradovic and Karapavlovic (2016)in their article titled “External Segment Reporting in the Republic of Serbia”studied the currently existing regulation of segment reporting in the Republicof Serbia. Additionally, in order to determine whether the type of entityinfluences the disclosure of segment information, Chi-square tests wereconducted. The results of the study revealed that the financial institutionshave disclosed more detailed segment information in comparison with the othertype of companies. The study also suggests thatthe regulatory bodies and other relevant parties should pay more attention tosegment reporting disclosures in order to meet user needs.Souza, Neto, Benedicto and Mendonca (2016)in their article titled “Segment Reporting in Brazil: Factors Influencing theDisclosure” conducted a study on the extent and determinants of segmentreporting in Brazil. For measuring the level of disclosure, they prepared alist of 40 segment information which was elaborated based on the requirementsof CPC 22. Based on the results of the analysis they found that size,Indebtedness, corporate governance and audit firms are the most importantdeterminants of segment reporting.

Other factors tested by them, namelyprofitability, corporate governance, audit and time were found to have nosignificant effect on the extent of segment disclosure by Brazilian companies.Shetiya and Saraf(2017) in their article titled “A Study of SegmentReporting Practice in India” has discussed the need for segment reporting, itssignificance and its importance to the users of the financial statement. The study states that the reporting ofsegmental information does not only fulfillthe data requirement of stakeholders, it will also contribute to the growth ofthe company as well as the whole economy.Reviewof Literature on Segment Reporting

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