Mishari M. Alfraih

The effectiveness of board of directors’ characteristics in mandatory disclosure compliance

The purpose of this paper is to investigate the relationship between the characteristics of the board of directors and mandatory disclosure compliance (measured by International Financial Reporting Standards requirements) in firms listed on the Kuwait Stock Exchange (KSE) in 2010.,Several characteristics are used to assess the effectiveness of the board of directors: number of members, gender diversity, CEO duality, multiple directorships, the proportion of family members on the board and the presence of a member of the ruling family of Kuwait. Mandatory disclosure compliance is measured using a self-constructed, item-based index. A regression model tested the paper’s hypotheses.,After controlling for firm-specific characteristics, it was found that board size, gender diversity and multiple directorships were positively correlated with compliance, while CEO duality and the proportion of family members on the board were negatively correlated with compliance.,Potential limitations stem from both the nature of the sample and the dataset. The small sample reflects the size of the KSE and the limited timeframe (a one-year period). Nevertheless, this paper provides some interesting insights. A longitudinal study would provide more comprehensive insights into the relationship between the characteristics of the board of directors and mandatory disclosure compliance over time.,The findings highlight the effectiveness of board of directors’ characteristics in promoting mandatory accounting compliance. As disclosure is fundamental for the effective functioning of capital markets and sound investments, a direct implication is that the quality of financial reporting can be improved by taking these characteristics into account.,The paper contributes to the literature on the determinants of mandatory accounting compliance. The findings highlight the importance of the board of directors’ role in enhancing transparency and ensuring the quality of financial reporting. The findings will be particularly valuable to those involved in the appointment of directors, who should be aware of the influence of the configuration and characteristics of the board on compliance.

Accounting students’ perceptions of effective faculty attributes

Purpose This study aims to explore the attributes of an effective accounting faculty from the student perspective. It also examines similarities and differences in the perceived importance of these attributes between bachelor’s and associate’s accounting degree students in two public higher education institutions in Kuwait, namely, Kuwait University (KU) and the Public Authority for Applied Education and Training (PAAET). Design/methodology/approach A questionnaire was developed to identify ideal accounting faculty attributes. It was administered to a sample of accounting students at the two institutions in the 2014-2015 academic year. Descriptive statistics were collected and independent samples t-tests were run. Findings The most highly ranked attributes related to instructor characteristics and class delivery. Significant differences were found between KU and PAAET students in the perceived importance of attributes. KU students ranked class preparation and delivery attributes significantly higher than PAAET students. In contrast, PAAET students ranked attributes related to instructor characteristics and evaluation methods significantly higher than KU students. Practical implications These findings provide an insight into the attributes of an effective accounting faculty from the students’ perspective. A direct implication is that accounting faculty can incorporate the most important attributes into their course design and delivery. This may improve teaching effectiveness and ultimately student learning. Originality/value This research is timely because the College of Business Studies at PAAET has applied for accreditation with the Accreditation Council for Business Schools and Programs. As teaching effectiveness is a major consideration in the process, these findings may help it to enhance its performance and improve the chances of its accreditation application being successful. The study bridges a gap in the literature on teaching effectiveness because there appears very little, if any, research into the attributes of effective accounting teaching.

Corporate governance mechanisms and audit delay in a joint audit regulation

Purpose - This paper examines the influence of corporate governance mechanisms on audit delay in companies listed on the Kuwait Stock Exchange (KSE) in 2013. Kuwait has the unusual audit regulation that listed companies must be jointly audited by two independent auditors who both sign the report. Design/methodology/approach - Audit delay is measured as the number of days that elapse between the end of the company’s financial year and the date of the audit report. A multivariate regression model analyzes the association between audit delay and six corporate governance mechanisms, namely; joint auditor combination, board size, board independence, role duality, institutional ownership, and government ownership. Findings - There is a wide range in audit delay among KSE companies, ranging from seven to 159 days. After controlling for various company characteristics, there is a significant difference in the timeliness of audit reports depending on the combination of auditors: audit delay is significantly reduced when the audit is performed by Big-4 companies. Moreover, companies with larger boards, a greater number of independent directors, and separate CEO-chairman roles are more likely to produce timely financial statements. Higher government ownership levels were associated with greater audit delay, while no significant association was found for institutional ownership. These results are robust to a variety of sensitivity checks. Practical implications - The findings highlight the effectiveness of corporate governance mechanisms in shaping the timeliness of audit reports, thus these mechanisms should be taken into account in any regulatory action to reduce audit delay. In addition, the findings of this study provide empirical evidence that can be used by regulators and enforcement bodies in their continued campaigns promoting the role and importance of corporate governance mechanisms in improving the quality and timeliness of financial reporting. Originality/value - The study extends the audit delay literature by investigating the issue in a joint audit setting. The empirical evidence shows a wide range of audit delay in KSE-listed companies, which raises questions about the costs and benefits of the joint audit regulation for the length of this period.

The value relevance of intellectual capital disclosure: empirical evidence from Kuwait

Purpose - Drawing on market efficiency theory and studies on intellectual capital disclosure, this study examines if intellectual capital information provided in the corporate annual reports of Kuwait Stock Exchange (KSE) listed companies in 2013 is value relevant. Design/methodology/approach - The analysis is divided into two parts. First, the level of intellectual capital disclosure of KSE-listed companies is examined using the content analysis method. Second, the value relevance of financial reporting is examined empirically using Ohlson’s (1995) valuation model. Findings - The results reveal that intellectual capital disclosure is positively and significantly associated with market value, suggesting that greater intellectual capital disclosure is valued by KSE market participants, who incorporate it into their valuation models. Practical implications - Given the importance of intellectual capital disclosure in enhancing equity valuation, a practical implication of this study is to make managers aware of its positive and significant effect on equity valuation, which may encourage companies to increase their level of disclosure. Originality/value - This is the first study of the association between the level of intellectual capital disclosure and the value relevance of financial reporting for market participants in Kuwait. It therefore extends and confirms the prior literature by broadening its scope to include frontier markets. Furthermore, it provides empirical evidence in support of recent calls from regulators and professional bodies for information that supplements and complements traditional financial reporting.

Have financial statements lost their relevance? Empirical evidence from the frontier market of Kuwait

Purpose - – Anecdotal concerns expressed regarding developed capital markets suggest that the information provided in financial statements has lost its value relevance to equity holders over time. The purpose of this paper is to investigate the issue from the perspective of Kuwait, which is a frontier market. Design/methodology/approach - – Consistent with prior research, the design employs the price regression model. A total of 2,490 observations were collected from all firms listed on the Kuwait Stock Exchange (KSE) over a period of 21 years (1994-2014). Findings - – Although this study documents a notable decline in both the value relevance of earnings and book value for equity holders over this period, the results suggest that the decline in the value relevance of earnings was deeper and more pronounced than that of book value. Practical implications - – Because a fundamental prerequisite for the value relevance of accounting information is the quality of the financial reporting environment, the results are useful for regulators because they provide an assessment of the effectiveness of the current financial reporting environment. The results highlight the need for improvements because higher-quality information helps equity holders to determine value more precisely. As the timely dissemination of financial statements is an essential ingredient contributing to the relevance of financial statements, a direct implication of the study’s findings for the management of KSE companies is that timely reporting of financial statements may mitigate the observed decline of the value relevance of financial statements produced by KSE companies. Originality/value - – This study contributes to the capital market research regarding changes in the value relevance of financial statement information through an empirical examination of a frontier capital market.

The effect of students’ performance in introductory accounting on college duration: Evidence from Kuwait

This study aims to examine the effect of accounting students’ performance in the first part of introductory accounting on duration to successfully complete accounting program.,Linear regression (ordinary least squares) with a sample of 127 accounting students, who were graduated during the 2015/2016 academic year from a business college in Kuwait, was used to test the study’s hypothesis.,The results indicate that there was a statistically significant association between the grade earned in the first part of introductory accounting and the college duration, which explained the significant influence of the grade earned in the first part of introductory accounting on the college duration, with and without controls for other factors.,The findings provide administrators, accounting educators and academic researchers with a useful benchmark for improving accounting programs and guidelines for future academic research.,The value of this study would be twofold; it provided a foundation for future comparative studies, potentially leading to the harmonization of international accounting education, and it addressed some of the gaps in the existing regional accounting education literature resulting from the scarcity of prior studies. In addition, the college where data were collected has been recently approved to enter the candidacy for accreditation at the Accreditation Council for Business Schools and Programs. Given the accrediting bodies emphasis on academic performance and graduation on time, the study’s findings would help the college in enhancing its students’ performance and maximizing the chances of its accreditation application being successful.

What drives intellectual capital reporting? Evidence from Kuwait

Purpose Motivated by the increased attention on intellectual capital reporting (ICR) from regulatory bodies, practitioners, and researchers and the recent calls for companies to supplement and complement their traditional financial statements with intellectual capital (IC) disclosure, the purpose of this paper is to investigate the drivers of ICR among the companies listed on the Kuwait Stock Exchange (KSE). Design/methodology/approach Content analysis was applied to the annual reports of all companies listed on the KSE in 2013. A multiple regression analysis was employed to explore the ICR drivers. Findings Despite the growing importance of ICR in capital markets, the study findings reveal an overall relatively low level of ICR among KSE-listed companies. In addition, the level of ICR varies significantly between companies. The results show that the level of ICR for all KSE-listed companies in 2013 ranged from 0 to 96 percent and the mean was 28 percent. The multiple regression analysis suggests that older, highly leveraged, larger, and profitable KSE-listed companies are associated with higher levels of ICR. Industrial sector is a partial driver. Practical implications Surprisingly, many of the KSE-listed companies do not disclose any IC information in their annual reports. Given the increasingly important role that IC information plays in capital markets, regulatory bodies should encourage, stimulate, and guide companies to report IC information. The findings offer insights as to the drivers of ICR that should improve efforts to develop recommendations that push for greater IC disclosure in corporate annual reports. Originality/value The study is the first examination of ICR drivers in Kuwait. It contributes to the literature by providing empirical evidence about ICR in a market with specific economic, social, and cultural characteristics. It enhances our understanding of ICR by revealing some of its drivers.

Does accumulated knowledge impact academic performance in cost accounting

Purpose This quantitative study aims to examine the impact of accumulated knowledge of accounting on the academic performance of Cost Accounting students. Design/methodology/approach The sample consisted of 89 students enrolled in the Accounting program run by a business college in Kuwait during 2015. Correlation and linear least squares regression analyses tested the study’s hypothesis. Findings Results indicated significant impact of accumulated knowledge on academic performance, with and without controls for other factors. Practical implications The findings provide administrators, academic advisors, accounting educators and researchers with a useful benchmark for the development of accounting curriculum, teaching plans and strategies and future academic research, and it forms the basis for comparative work aimed at the harmonization of international accounting education. Originality/value The study provides empirical support for the theoretical prediction that quantitative accumulated knowledge in accounting has an impact on the academic performance of students, especially in Cost Accounting. Internationally, it provides a foundation for future comparative studies, potentially leading to the harmonization of international accounting education. Regionally, it attempts to fill some of the gaps in the regional accounting education literature. Locally, the study seeks to improve the performance of the accounting students in Cost Accounting within the college where data were collected.

The role of corporate governance in intellectual capital disclosure

Purpose This paper examines the influence of corporate governance mechanisms on the extent of intellectual capital (IC) disclosure among companies listed on the Kuwait Stock Exchange (KSE). Design/methodology/approach A content analysis approach was used. The association between the dependent and independent variables was examined using a multiple regression analysis. Findings The results suggest that corporate governance mechanisms strongly influence the quantity of IC information disclosed in the annual reports of KSE-listed companies. Specifically, companies with larger boards, a higher proportion of external directors, and higher blockholder ownership are associated with higher levels of IC disclosure. Practical implications The findings highlight the effectiveness of corporate governance mechanisms in promoting IC disclosure. They are a useful guideline for regulators, company management, and shareholders regarding the corporate governance mechanisms that influence the extent of IC disclosure. Given ...