Internet Financial Reporting, Corporate Governance Mechanisms And Firm Value: Evidence From Gulf Cooperation Council Countries

Abstract

Internet financial reporting (IFR), which facilitates availability of information instantaneously to a global audience, leads to the increase in the market’s overall transparency and encourages investment. However, IFR is likely to be subject to greater managerial discretion as the practice is voluntary. Accordingly, corporate governance mechanisms, which have become one of the most crucial issues due to the accounting scandals and global financial crisis, may be important in explaining the differences in levels of IFR disclosure between companies as well as countries. There are four objectives of this study. The first objective of this study is to examine the current level of IFR disclosure in listed financial companies in Gulf Cooperation Council (GCC) countries. The second and third objectives of this study are to examine the effect of corporate governance (board of directors’ effectiveness, audit committee effectiveness, and ownership structure) and company type on the level of IFR disclosure among these companies. The fourth objective of this study is to examine the economic consequences of IFR disclosure on firm value in order to understand the implications of increased IFR disclosure, especially for companies in emerging countries.