En el caso de delito continuado, la pena podrá aumentarse hasta por una mitad más de la que resulte aplicable

A summary of the key disclosure studies that examining the extent of aggregate disclosure in developed countries is provided in Table 3.7.

Table 3.7: Studies on Aggregate Disclosure in Developed countries Authors Country Time

Note: This table provides a summary of the results of key aggregate disclosure studies in developed countries.

A third strand of the literature has explored the extent of aggregate disclosure (mandatory and voluntary) in corporate annual reports. Cerf (1961) was one of the first to deal empirically with company characteristics which might affect the extent of such information releases. The author reported a positive relationship in the US between firm size, number of stockholders, profitability and the level of disclosure. The study also found that New York Stock Exchange companies disclosed more than those listed on regional stock exchanges. A decade later, Singhvi and Desai (1971) followed the approach of Cerf and examined the annual reports of 155 listed and unlisted companies in the US in 1966. The authors addressed possible associations between firm characteristics and corporate disclosure and found that large and more profitable companies produced higher quality disclosure; they also noted that listed companies disclose more information than unlisted companies. A few years later Buzby (1975), again in the US, examined the annual reports of 88 companies during 1970 and 1971 and investigated the relationship between the extent of financial disclosure and firm size and listing status. The authors used a survey consisting of 39 items which was sent to 150 financial analysts. Based on a 21.3% response rate, the study found a positive relationship between firm size and the extent of disclosure, whereas listing status was not found to have any effect on.

More recently, Malone et al. (1993) focused specifically on industrial sector when they examined the relationship between firm specific factors and the extent of aggregate financial disclosure in the annual reports of 125 oil and gas companies listed in the Enterprise Standard Industrial Classification (ESIC). Based on an examination of 129 information items and a 16.6% response rate, the authors found that listing status, debt-to-total-equity ratio and the number of shareholders were statistically significant in explaining the extent of overall financial disclosure. These findings support the earlier US studies of Cerf (1961), Singhvi and Desai (1971) in some key areas; for example, most studies found listing status to be significantly associated with the extent of disclosure. In contrast, Malone

et al. (1993) found no association between firm size and disclosure extent, a result which had been reported in studies by both Cerf and Singhvi and Desai.

In Sweden, Cooke (1989c) examined the annual reports of 90 listed and unlisted companies during 1985. The author investigated the extent of disclosure and the relationship between a number of corporate characteristics and the overall extent. The author used a disclosure index with a checklist consisting of 224 items to measure disclosure level in the annual reports and found that the overall level for listed companies was higher than that for those that are unlisted. Quotation status and firm size were significant explanatory factors with regard to the extent of disclosure. Cooke (1993a) conducted a subsequent study in Japan which again examined the relationship between aggregate disclosure and firm specific factors in annual reports, this time using of 48 listed and unlisted companies for the year 1988. On the basis of a 195 item disclosure index, Cooke found that the level of mandatory disclosure was very high while the level of voluntary disclosure was low. The author also found that corporations with multiple listings disclosed more information in their Japanese annual reports than corporations listed only on the Tokyo Stock Exchange.

In Spain, Inchausti (1997) studied the association between firm specific characteristics and the level of disclosure in the annual reports of 49 companies during 1989-1991. Disclosed information was measured based on a checklist of 50 items of information. The author reported that company size, auditing and stock exchange listing appeared to have an influence on the aggregate disclosure levels, whereas a negative association between profitability and disclosure was reported.

The focus of the extant literature reviewed above was on testing and analysing the level of aggregate disclosure and the impact there on of company characteristics in developed countries over the past 50 years or so. The majority of these studies indicate a significant

association between listing status and the extent of aggregate disclosure. However, a more recent literature has investigated the same issue in developing countries and this is now reviewed.

3.5.2 Studies in Developing Countries

Table 3.8 provides a summary of the key disclosure studies that have examined aggregate disclosure in developing countries.

Table 3.8: Aggregate Disclosure Studies in Developing countries Authors Country Time

Note: This table provides a summary of the results of key aggregate disclosure studies in developing countries.

Naser and Nuseibeh (2003)³⁹ assessed the level of disclosure in the annual reports of 91 companies listed on the Saudi stock exchange during 1992-1999, focusing on differences before and after the creation of the Saudi Organization of Certified Public Accountants in 1993. They reported that the mandatory disclosure level was high at 93%, with the author concluding that Saudi companies disclosed more than the minimum information required by law. However, the study revealed that the level of voluntary disclosure was relatively low at 28%. More generally, the authors concluded that creation of the new body had had little impact on corporate reporting.

Hassan et al. (2006) examined the extent of aggregate disclosure by 77 non-financial Egyptian companies between 1995 and 2002. The study reported improvement in disclosure levels over the time period and found that the average aggregate disclosure level was 75%, with mandatory disclosure “high” at 90% and voluntary disclosure 48%. The authors also noted that big companies tended to disclose relatively large amounts of voluntary information and relatively little mandatory information.

More recent study by Omar and Simon (2011) empirically investigated the disclosure behaviour of 121 Jordanian non-financial listed companies during the year 2003 since the introduction of new regulations affecting the Jordanian Capital Market, ⁴⁰ examining the relationship between firm specific characteristics and the level of aggregate disclosure. The authors used a disclosure index that included 331 mandatory and voluntary items and found that the aggregate disclosure level had increased compared to previous studies in Jordan⁴¹ with an average of 69% (mandatory at 83% and voluntary at 34%). The study ascribed this increase to the development of a new regulatory system in Jordan. The results also

39 Similar results were reported in Saudi Arabia by Al-Razeen and Karbhari (2004b) who examined the extent of mandatory and voluntary disclosures in the annual reports of Saudi Arabian listed and non-listed companies; the authors found that companies disclosed more mandatory than voluntary items. The average level of compliance with mandatory disclosure was 88%, while the voluntary disclosure level was 32%.

40 For instance, The Temporary Securities Law No. 23, 1997.

41 Namely: Al-Issa (1988); Suwaidan (1997); and Al-Shiab (2003).

indicated that firm size, profitability, number of shareholders, listing status, industry type, audit firm size and company age were significant variables in explaining the variation in the level of aggregate disclosure among the nation’s companies.

More recently, Kribat et al. (2013) investigated disclosure practices in the annual reports of 11 Libyan banks between 2000 and 2006. They employed a mandatory and overall disclosure index method using checklist that consisted of 126 financial information items (40 mandatory items plus items included in previous studies in developing countries). The authors found that Libyan banks failed to comply fully with mandatory disclosure requirements in any of the sample years (2000-2006). However, the average of overall levels of disclosure was 54.5%. Multivariate panel regression analysis showed that profit alone was statistically significant as a determinant of disclosure levels.

The studies outlined above indicate that companies claiming compliance may not in fact be meeting all of the requirements of IAS/IFRS. In addition, the studies show mixed results with regard to the relationship between company characteristics and the level of compliance with IAS/IFRS. For example, Fekete et al. (2008) and Al Mutawaa and Hewaidy (2010) found a positive association between company size and compliance with IAS, while Tower et al. (1999) found no significant association. Having examined the literature that focuses exclusively on individual nations, the next sub-section reviews the limited number of studies that have explored aggregate disclosure from a cross-country perspective.

3.5.3 Cross-Country Studies

Street and Bryant (2000) investigated significant differences between companies with US listings or US filings, and those without such status with regard to: (i) compliance with IASC-required disclosures; and (ii) aggregate levels of disclosure. The authors examined

the annual reports of 82 companies that claimed to use IAS in 17 different countries⁴² around the world during the year 1998. The results indicated that firms listing or filing in the US had higher levels of compliance than did others. The study specifically indicated that voluntary disclosures tended to be limited unless the company had a US listing.

Archambault and Archambault (2003) examined the extent of corporate disclosure in leading industrial companies from 33 countries around the world for years 1985-1994, and 1996 - 1997. They used an unweighted disclosure index that consisted of 85 (mandatory and voluntary) items and found that the extent of overall disclosure was 75.6% and that the level is influenced by factors from a broad range of social systems: cultural, political, economic, and corporate.

Section 3.5 has summarised the key aggregate disclosure studies conducted to date.

Although smaller in number than the exclusively mandatory or voluntary analysis reviewed earlier these studies tell a similar story in terms of disclosure levels and determinants.

However, this thesis also focuses on user and preparer perceptions, and Section 3.6 now turns to studies that have addressed these.