Financial disclosure practices in developing countries
: evidence from the Libyan banking sector

  • Musa M. J. Kribat

    Student thesis: Doctoral ThesisDoctor of Philosophy


    The main aim of this study is to assess both: (i) perceptions regarding: and (ii) the nature financial disclosure practices in Libyan banks' reports. As regards the former. the focus was placed on both preparers and users of the documents. In terms of the latter. the level of disclosure is examined and its relationship with certain firm-characteristics (such as: bank size; age of bank; profitability; and ownership structure) and the overall level of Libyan banks' financial disclosure analysed. A decision-usefulness framework underpinned the research which was carried out via a questionnaire survey and a disclosure index analysis. The findings suggest that preparers considered management and the board of directors to be the most important users, of Libyan banks' annual reports and the most influential in terms of disclosure practices and accounting policies choice. The evidence also illustrates that, from the users' perspective, the annual reports of Libyan banks are frequently employed, and are the most important source of information for decision-making process. The main purpose of these documents is perceived by both preparer and user groups as being the provision of information to assist the Central Bank of Libya (CBL) in its monitoring and supervision activities. The perceptions of preparers were consistent with those of users regarding the quality of financial disclosures in Libyan banks' annual reports, but views differed in terms of the quantity of the information and the degree of compliance with mandatory disclosure requirements; in the latter cases, preparer groups were more satisfied than users. However, both groups are pinning strong hopes on the newly-formed Libyan Stock Market's role and on-going economic reforms -to play a key role in improving disclosure practices. Finally. Libyan banks failed to comply fully with mandatory disclosure requirements in any of the sample years (2000-2006); on average the level of compliance was 89% (with a range of 74~ 0 to 97%). In terms of overall levels (i.e. mandatory plus voluntary) of financial disclosure in Libyan banks' annual reports, the figures were low; only 54% of information items were disclosed on average by sample banks (with a range of 39% to 670/0). Multivariate panel regression analysis showed that both profit and age appear to have a positive impact on the overall financial disclosure level whereas size has a negative influence. However, the first of these effects proved to be significant. The findings are shown to be of interest to regulators, users and providers of financial information in the Libyan banking sector
    Date of Award2009
    Original languageEnglish
    SupervisorBruce Burton (Supervisor) & Louise Crawford (Supervisor)

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