IUP Publications Online
Home About IUP Magazines Journals Books Archives
     
Recommend    |    Subscriber Services    |    Feedback    |     Subscribe Online
 
The IUP Journal of Corporate Governance
The Extent of Disclosure in the Annual Reports of Banking Sector of Pakistan: An Empirical Investigation
:
:
:
:
:
:
:
:
:
 
 
 
 
 
 
 
 

This study empirically investigates the extent of both mandatory and voluntary disclosure in the annual reports of banking sector of Pakistan. It also examines the association between total disclosure level (mandatory and voluntary) and firm-specific attributes of the sample banks. The annual reports of 24 commercial banks listed on Pakistan Stock Exchange (PSX) are content analyzed for the year 2015-16. A disclosure index of 219 items was selected, out of which 117 were mandatory and 102 were voluntary items. The results reveal that average total disclosure level is 70%. Average score for mandatory and voluntary items is 100% and 54% respectively. The regression analysis indicates that assets-in-place, age and board composition are significant in explaining the disclosure level. The results reveal that banks in Pakistan are very compliant towards mandatory disclosure, which indicates that regulatory bodies are functioning well and their implementation is strong and effective. Overall, this study is a valuable contribution to the field of disclosure of information in annual reports of banking sector of Pakistan, as in Pakistan very limited work has been done on disclosure of information in annual reports.

 
 
 

Pakistan is an emerging economy and is ranked 26th largest economy in the world with regard to Purchasing Power Parity. Pakistan’s financial system is characterized by a growing network of commercial banks, financial institutions, stock exchanges and a sufficiently large range of financial instruments. Internationally, Basel Committee on Banking Supervision, International Monetary Fund, International Financial Reporting Standards and International Accounting Standards dictate and guide a framework for disclosure of information in financial reports. The Basel Committee on Banking Supervision released a document in 1998 with the title “Enhancing Bank Transparency” which considers transparency to be a main factor of a well-supervised, sound and secure banking system. Moreover, this document recommends that in regular financial reporting and in other public disclosures, banks should provide accurate and timely financial and non-financial information which facilitates participants of financial market to evaluate banks’ overall performance.

 
 
 

Corporate Governance Journal