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Corporate governance determinants on Australian resource companies' financial instrument disclosure practices

Author

Listed:
  • Grantley Taylor
  • Greg Tower
  • Mitchell Van Der Zahn
  • John Neilson

Abstract

Purpose - This paper seeks to investigate the corporate governance determinants of financial instrument disclosure (FID) practices of Australian listed resource firms in their annual reports for the 2005 financial year. This is an important time period to explain FID patterns for Australian resource companies leading up to formal adoption of the Australian equivalents to the International Financial Reporting Standards (IFRS). Design/methodology/approach - The extent of FID was measured using a Financial Instrument Disclosure Index (FIDI) comprised of 120 items of both mandatory and discretionary financial instrument information. Hypothesis testing used empirical data from a representative sample of Australian listed resource firms. Research limitations/implications - The results of regression analysis demonstrate that corporate governance characteristics of firms are significant determinants of FID patterns. Univariate and multivariate results showed that FIDs were significantly and positively associated with strength of corporate governance structure and the control variables – leverage, firm size and industry. Originality/value - This paper contributes to an emerging paradigm that emphasises the link between firms' governance structures and their disclosure responses to financial instruments and in particular, financial derivatives.

Suggested Citation

  • Grantley Taylor & Greg Tower & Mitchell Van Der Zahn & John Neilson, 2008. "Corporate governance determinants on Australian resource companies' financial instrument disclosure practices," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 16(1), pages 56-73, May.
    • Handle: RePEc:eme:arapps:v:16:y:2008:i:1:p:56-73
    DOI: 10.1108/13217340810872472
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    Citations

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    Cited by:

    1. Abdullah, Azrul Bin, 2018. "Company-specific characteristics and the choice of hedge accounting for derivatives reporting: Malaysian case," SocArXiv npa6v, Center for Open Science.
    2. Abdullah, Azrul & Ku Ismail, Ku Nor Izah, 2017. "Companies’ Characteristics and the Choice of Hedge Accounting for Derivatives Reporting: Evidence from Malaysian Listed Companies," MPRA Paper 90213, University Library of Munich, Germany.
    3. Abdullah, Azrul & Ku Ismail, Ku Nor Izah, 2015. "Hedging Activities Information and Risk Management Committee Effectiveness: Malaysian evidence," MPRA Paper 85026, University Library of Munich, Germany.
    4. Abdullah, Azrul Bin & Ismail, Ku Nor Izah Ku, 2018. "Hedging Activities Information and Risk Management Committee Effectiveness: Malaysian evidence," SocArXiv kxfqe, Center for Open Science.
    5. Agung Nur Probohudono & Bambang Sugiharto & Siti Arifah, 2019. "The Influence Of Corporate Governance, Audit Quality, And Ownership, On Financial Instrument Disclosure In Indonesia," Journal of Contemporary Accounting, Master in Accounting Program, Faculty of Business & Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia, vol. 1(3), pages 173-187, May.
    6. Abdullah, Azrul Bin & Ismail, Ku Nor Izah Ku & Isa, Norshamshina Mat, 2018. "Risk Management Committee and Disclosure of Hedging Activities Information among Malaysian Listed Companies," SocArXiv qfw5j, Center for Open Science.
    7. Sharma, Narendra, 2014. "Extent of corporate governance disclosure by banks and finance companies listed on Nepal Stock Exchange," Advances in accounting, Elsevier, vol. 30(2), pages 425-439.
    8. Abdullah, Azrul & Ku Ismail, Ku Nor Izah & Mat Isa, Norshamshina, 2015. "Risk Management Committee and Disclosure of Hedging Activities Information among Malaysian Listed Companies," MPRA Paper 77962, University Library of Munich, Germany.
    9. Malaquias, Rodrigo Fernandes & Zambra, Pablo, 2018. "Disclosure of financial instruments: Practices and challenges of Latin American firms from the mining industry," Research in International Business and Finance, Elsevier, vol. 45(C), pages 158-167.
    10. Jacqueline Birt & Michaela Rankin & Chen L. Song, 2013. "Derivatives use and financial instrument disclosure in the extractives industry," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 53(1), pages 55-83, March.
    11. Grantley Taylor & Greg Tower & John Neilson, 2010. "Corporate communication of financial risk," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 50(2), pages 417-446, June.
    12. Azrul Abdullah & Ku Nor Izah Ku Ismail & Norshamshina Mat Isa, 2015. "Risikomanagement-Ausschuss und Offenlegung von Hedging-Aktivitäten Informationen unter Malaysian gelisteten Unternehmen [Risk Management Committee and Disclosure of Hedging Activities Information A," Post-Print halshs-01509153, HAL.

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