Corporate reporting and disclosures in the emerging capital market of Kuwait: the perceptions of users and preparers

Abstract

The objective of this paper is to investigate the perceptions of users and preparers regarding financial disclosure practices in annual reports of Kuwaiti listed firms. To measure participants' views, a questionnaire survey was distributed in Kuwait between October and December 2012, to preparers (financial managers) and users (financial analysts) within Kuwaiti listed companies. The study compares between the perceptions of financial managers and financial analysts regarding to disclosing information in corporate annual reports as well as the main obstacles facing the disclosure process and what the problems restricting the use of companies' annual reports. The study also seeks to investigate whether there is a perceived need for improving the usefulness of Kuwaiti companies' annual reports for decision-making. The results, based on 137 responses, indicate that accounting practices in Kuwaiti firms are firmly rooted in a decisionusefulness tradition with management and the board of directors viewed as the key audience for reporting information. Indeed, the annual reports of Kuwaiti listed companies are perceived as the most important sources of information. On the whole both users and preparers shared similar concerns regarding the volume of information contained within annual reports, however, their views differed in terms of identifying potential solutions. The results of the study are likely to have implications for decision makers, the academic community and accounting standard setters.

Investors’ perception on the usefulness of management report disclosures

“…By contrast, other scholars (Vergoossen, 1993) revealed that the MR is a moderately important source of information for investors. In the emerging markets, several studies revealed that the MR has a moderate or slight level of usefulness for decision-making (Alzarouni et al, 2011;Biswas and Bala, 2016;Dawd et al, 2018;Mirshekary and Saudagaran, 2005;Stainbank and Peebles, 2006) while MEDAR 27,6 Alattar and Al-Khater (2008) reported that the MR is a relevant source of information for investment decisions in Qatar.…”

Audit Evidence and Financial Statement Quality in Government Owned Companies in Rivers State, Nigeria

“…Prior literature indicated a strong support that individuals place more weight on evidence from a more reliable source when presented with conflicting evidence [31]. In auditing contexts, when presented with conflicting evidence, auditors are expected to place greater weight on audit evidence from a more reliable source.…”

The Management Report Usefulness in Lending Decision: Investigating Egyptian Credit Managers Perceptions

“…Unlike, MR corporate disclosure usefulness has a well-established literature in both western and LDCs. Usefulness of the annual report represent a mainstream in these studies (Allini et al, 2018;Biswas & Bala, 2016;Dawd et al, 2018;Lee & Tweedie, 1975), while some studies concentrated on the usefulness of specific items within the annual report (Biswas & Bala, 2016;Cohen et al, 2010;Dawd et al, 2018;Graham et al, 2002;Hassan & Power, 2009;Johansen & Plenborg, 2013;Khaled & Khaled, 2010;Orens & Lybaert, 2007;Stainbank & Peebles, 2006). As annual reporting disclosure is out of the scope of this research, what is important how they mentioned MR in their studies.…”

“…Stainbank and Peebles (2006), assures that users value information relating to forward-looking. While, Dawd et al (2018) reported the importance of liquidity, KPIs. Moreover, Alattar and Al-Khater (2007) concluded that MR represent a useful source of information for investors in Qatar.…”

“…On the contrary, Biswas and Bala (2016) confirmed Johansen and Plenborg (2013) results on the slight importance of corporate governance and CSR disclosures. Moreover, some studies argued that MR had a slight or moderate usefulness for investors (Biswas & Bala, 2016;Dawd et al, 2018).…”