Corporate governance and voluntary disclosures in annual reports: a post-International Financial Reporting Standard adoption evidence from an emerging capital market

• DOI: https://doi.org/10.1108/IJAIM-10-2021-0220
• Published date: 23 March 2022
• Date: 23 March 2022
• Pages: 252-276
• Subject Matter: Accounting & finance,Accounting/accountancy,Accounting methods/systems
• Author: Richard Nana Boateng,Vincent Tawiah,George Tackie

Corporate governance and

voluntary disclosures in annual

reports: a post-International

Financial Reporting Standard

adoption evidence from an

emerging capital market

Richard Nana Boateng

DCU Business School, Dublin City University, Dublin, Ireland and

Department of Accounting Studies, Akenten Appiah-Menka University of Skills

Training and Entrepreneurial Development, Kumasi, Ghana

Vincent Tawiah

DCU Business School, Dublin City University, Dublin, Ireland, and

George Tackie

UCC Business School, University of Cape Coast, Cape Coast, Ghana

Abstract

Purpose –The purpose of this paper is to provide an empirical evidence concerning the inf‌luence of

Corporate governance and voluntarydisclosures in annual reports: a post-International Financial Reporting

Standardsadoption evidence from an emerging capital market.

Design/methodology/approach –Data were collected from the annual reports of all 22 listed non-

f‌inancial f‌irms over a f‌ive-year period. Using contentanalysis, the audited annual reports of the f‌irms were

scored on the extent of overalland four specif‌ic types of voluntary disclosures made. The panel data obtained

were analyzedusing a generalized ordinary least squares regressionmodel.

Findings –The f‌indings of the study showthat voluntary disclosures among the f‌irms are low even after

the adoption of IFRS. Corporate governance attributes of board size and board leadership structure are

signif‌icant determinants of the extent of voluntary disclosures made by the f‌irms. However, board

independence and auditor typeexhibit only a signif‌icant positive effect on voluntary f‌inancial and forward-

lookinginformation disclosures.

© Richard Nana Boateng, Vincent Tawiah and George Tackie. Published by Emerald Publishing

Limited. This is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may

reproduce, distribute, translate and create derivative works of this article (for both commercial and

non-commercial purposes), subject to full attribution to the original publication and authors. The full

terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

The authors acknowledge the inputs of several academics across the globe, who provided very

useful criticisms during conferences and have been instrumental in bringing this paper to its current

state. A special acknowledgment to Dr Otuo Serebour Agyemang (deceased) for his inspiration and

motivation in starting and completing an earlier draft of this paper.

Conf‌lict of interest statement: On behalf of all authors, I, Richard Nana Boateng (corresponding

author), state that there is no conf‌lict of interest.

IJAIM

30,2

252

Received29 October 2021

Revised25 January 2022

Accepted9 February 2022

InternationalJournal of

Accounting& Information

Management

Vol.30 No. 2, 2022

pp. 252-276

EmeraldPublishing Limited

1834-7649

DOI 10.1108/IJAIM-10-2021-0220

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/1834-7649.htm

Research limitations/implications –Firms’voluntary information disclosure and governance

variables were restrictedto those in annual reports, which may partially ref‌lectthe reality of f‌irms’disclosure

and governancepractices.

Practical implications –The present study offers useful insightsto regulators of the capital market to

strengthen monitoringof f‌irms to ensure strict adherence to corporate governance bestpractice guidelines as

a means of improving informationenvironment.

Originality/value –This study is one of the very few ones in Africa, especiallyin the context of Ghana

Stock Exchange,to use post-IFRS data and examine a disaggregatedvoluntary disclosure by f‌irms.

Keywords Corporate governance, IFRS, Annual reports, Ghana Stock Exchange, Voluntary disclosures

Paper type Research paper

1. Introduction

Corporate governance systems, including issues of information disclosures and

transparency, have witnessed signif‌icant improvements in developed economies following

the devastating collapse of many corporategiants, such as Enron in the USA and Parmalat

in the European Union (EU). However, developingeconomies, including Ghana, continue to

lag behind, despite efforts at improving overallcorporate governance (Papadopoulos, 2019).

Ghana’s adoption of international f‌inancial reporting standards (IFRS) and corporate

governance best practice guidelines, in 2007 and 2010, respectively, were expected to

improve overall f‌irm-level corporategovernance, f‌inancial reporting, information disclosure

and transparency (Appiah et al.,2016;Tawiah and Boolaky, 2019). Scholars have suggested

that mandatory adoption of IFRS and its effective compliance among f‌irms is a function of

f‌irm-level corporate governance practices and other f‌irm characteristics (Horton et al.,2012;

Tawiah and Boolaky, et al., 2019;Appiah etal.,2016;Barako, 2007). Despite the adoption of

IFRS and implementation of corporate governanceguidelines, the capital market witnessed

major corporate scandals and failures–e.g. UT Bank and Capital Bank (Ansah, 2017). This

calls into question whether the mandatory adoptionof IFRS and corporate governance best

practices guidelines have had any signif‌icant impact on the information disclosure and

transparency environment of Ghana. Thus,in this study, we examine the inf‌luence of f‌irm-

level corporate governancepractices on the extent of voluntarydisclosures by listed f‌irms.

While interest in disclosureresearch has surged over the past three decades, the plethora

of studies has rather concentrated on advanced economies in Europe and the USA

(Stef

anescu et al., 2012;Boesso et al., 2007;Barros et al.,2013) with scant evidence on

developing economies, particularly Africa (Adelopo et al., 2011;Barako, 2007;Rouf, 2011;

Appiah et al., 2016). Scholars have highlighted that enhanced disclosures by f‌irms in

developing economies can strengthen their corporate brands, attract foreign investment,

lower cost of capital, reduce political and regulation intervention and enable f‌irms to

function within a productive and responsible framework (Hongxia and Ainian et al.,2008;

Chan et al., 2014;Hermalinand Weisbach, 2012;Entwistle, 1997).

There are several channels for communicating important corporate information, including

internet websites and press releases (Healy and Palepu, 2001). However, the audited annual report

remains the most important and credible medium for communicating corporate transparency and

voluntary disclosures, including f‌inancial and non-f‌inancial information (Nandi and Ghosh, et al.,

2012;Neu et al., 1998). Unlike other channels, the annual report is subject to strict regulation and

scrutiny by external auditors, hence is relied on by f‌irms’relevant publics (Neu et al.,1998). As

such, f‌irms invest signif‌icant amount of time, energy and money in generating and circulating

their annual reports every year, as they acknowledge the ability of its content to inf‌luence the

perception of its relevant publics and promote corporate legitimacy (Neu et al.,1998).

Corporate

governance

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