COMPREHENSIVENESS OF DISCLOSURE OF NON‐FINANCIAL COMPANIES: LISTED ON THE AMMAN FINANCIAL MARKET

Abstract

After the ratification of the peace treaty and the establishment of diplomatic relations with Israel, Jordan was expected to play a major role in the Middle East financial market. As a result of the peace treaty Jordan may attract overseas investors to invest in the Amman Financial Market (AFM). Consequently, the level of information disclosed by companies listed on the AFM will become an important issue for prospective investors. This study empirically examined the effect of specific financial characteristics on the comprehensiveness of disclosure in the annual reports of a sample of 54 companies listed on the AFM. The variables tested in this study were market related: industry, audit firm size and market capitalisation; performance related: profit margin, return on equity and liquidity, and structure related: assets, sales, leverage and ownership. The empirical evidence revealed that company size (measured by assets and market capitalisation), leverage and return on equity were statistically related to the comprehensiveness of disclosure of the sample companies listed on the AFM. Reporting improved after international standards were adopted. Large companies were more involved in long term borrowing which requires detailed reporting. Size was the main predictor in comprehensive reporting.

Citation

Naser, K. (1998), "COMPREHENSIVENESS OF DISCLOSURE OF NON‐FINANCIAL COMPANIES: LISTED ON THE AMMAN FINANCIAL MARKET", International Journal of Commerce and Management, Vol. 8 No. 1, pp. 88-119. https://doi.org/10.1108/eb047365