The Mediatory Effect of Voluntary Disclosure on the Relationship between Corporate Governance and Financial Performance: A Pilot Study

International Journal of Research and Innovation in Social Science (IJRISS) | Volume IV, Issue VII, July 2020 | ISSN 2454–6186

The Mediatory Effect of Voluntary Disclosure on the Relationship between Corporate Governance and Financial Performance: A Pilot Study

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

Abstract- The global problem since the past decade is the complete disclosure of financial statements. In fact, the report “profit and loss,” which reflects the company’s operating indicators, is important. The more transparent the report is, the better it is for future and existing investors to make their investment decisions. The more transparent the report is. This means that the more companies reveal the figures included in the financial statement, the more transparency they are. The purpose of a financial statement is to assist transparency and to supply a reliable annual report for more detailed information disclosure. It also promotes the development of accounting standards and financial reporting legislation. There are two forms of financial reporting: mandatory and voluntary reporting. The Mandatory Information Divulging, in particular, represents the key demand of the market for information provided by various laws and regulatory authorities and is regulated by public or professional organizations at the national or regional levels. On the opposite, a voluntary company divulgation that surpasses the divulgation demands is the correct option to divulge users’ annual reports. The researchers’ fundamental curiosity is how voluntary disclosure can improve financial performance and what factors influence the financial performance of the company listed in the Amman Bourse through the structure of corporate governance. The primary objective of the analysis is to analyze, in the annual reports of the Jordanian listed companies, the degree of voluntary disclosure and analyze the connection between corporate governance and financial performance (FP). In the Jordanian context, a research method will be used, namely archiving and method because the nature of the data needed to perform this survey on Jordanian companies stresses the need for secondary information to be an essential source of information because secondary information helps in determining current information. Data collected from 208 manufacturing and service firms in the 2012–2017 Annual Report of Amman Stock Exchange. Moreover, the latest source of information at the time of the research is data from this period. The sample of the study was limited to the service sector and industry, which comprises 208 companies representing 84 percent of the total companies listed in the Amman stock exchange. Version 18 (SPSS) was used in the analysis and this analysis was used as a descriptive analysis. The results showed that BORDIN, BACT, BSIZE, ACS, FOW, and IOW. The results indicate that Board members are the BORDIN Board of Trustees. Support was provided for H02, H03, H04, H05, H06, H07, H09. In contrast, the Audit Committee ‘s independence (ACOM) and government ownership (GOW) are statistically marginal, since their p-values are higher than their usual significance point of 0.05. Consequently, H01 and H08 were rejected. This analysis fills the gap created by past studies identifying these variables that identifying these variables that influence the financial results. The most theoretical effects are for this review. All factors affect financial efficiency, as shown by the results obtained. A financial performance research framework was proposed among listed Jordanian companies and empirical tests were conducted in this study. However, the most practical implications for this analysis are that this work examining the variables from each external factor in order to identify the one most successful in financial performance. The details collected may be incomplete by unreported corporate administration, concealed managing directors, and/or secret ownership rates one of the most significant determinants of this analysis. A significant suggestion for future studies would be the inclusion of more business services in this study that may include in- and out-of-market services. The study concludes that a structural model is developed and tested financially. In conclusion, shareholders and management of the current study will know that the scope of voluntary disclosure is determined by them. This then prevents them from expropriating the company’s property for their own purposes.

Keywords: Voluntary Disclosure, Corporate Governance, Annual Reports, Audit Committee Independence, Board Compensation, Financial Performance

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