The Mediating Effect of Voluntary Disclosure on the Relationship between Corporate Governance and Financial Performance among Listed Jordanian Companies

Ibrahim Mohd Al Hamadsheh, Barjoyai Bin Bardai and Abdoul Rahman Mhd Al Jounaidi
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Ibrahim Mohd Al Hamadsheh: Department of Accounting, Al-Madina International University, Kualalumpur-Malaysia
Barjoyai Bin Bardai: Department of Accounting, Al-Madina International University, Kualalumpur-Malaysia
Abdoul Rahman Mhd Al Jounaidi: Department of Accounting, Al-Madina International University, Kualalumpur-Malaysia

International Journal of Research and Scientific Innovation, 2020, vol. 7, issue 7, 150-157

Abstract: The all-round disclosure of financial statements was a global problem since the last decade. Indeed, the “profit and loss†report is important as it reflects the operational indicators of the company. The more transparent the “profit and loss†report, the more useful it is for the potential and current investors when making their investment decision. In other words, the more the firms disclose about the numbers included in the financial statement, the higher is their level of transparency. The purpose of a financial statement is to assist transparency while also providing a high-quality annual report for fuller disclosure of information. It also promotes the establishment of standards of accounting and laws concerning financial reporting. Two forms of financial reports are available: Compulsory and voluntary reporting. In particular, Compulsory information disclosure represents the main market necessity for info needed by varied laws and regulators, and it is governed at the national or regional level by the public authorities or professional organizations. On the contrary, corporate voluntary disclosure, which exceeds the disclosure demands, is the right choice for managers to disclose annual reports to users. The basic curiosity in the researcher’s mind is the extent to which voluntary disclosure is able to enhance financial performance, and what factors influence the company’s financial performance of listed in the Amman stock exchange through the corporate governance structure. The main objective of this study is to examine the extent of voluntary disclosure within the annual reports of Jordanian listed corporations and to examine the relationship between corporate governance mechanisms and Financial performance (FP) within the annual reports of Jordanian listed corporations. A research method will be used in the Jordanian context, namely archival and method since the nature of the data required for conducting this survey on Jordanian companies emphasizes the need for secondary data to be a major source of information because secondary data assist in defining contemporary evidence. The data obtained between 2012-2017 from the Annual Report of Amman Stock Exchange from 208 companies in the manufacturing and services sector. Moreover, information from this period is the most recent source of information at the time of research. The sample of this study was restricted to the Service sector and industrial sector which altogether include 208 corporations representing 84% of the total number of corporations listed in the ASE.

Date: 2020
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