While reviewing
financial information in the annual reports of firms, each of the internal and
external users of financial information has a different objective in mind for
the firm. In effect, the same set of annual reports of the firm is being
reviewed by different types of users with a different objective in mind. This
paper aims to measure the extent of voluntary disclosure provided in the annual
reports of Deposit Money Banks (DMBs) in Nigeria over a period of twelve (12)
years from 2006 to 2017. Using three panel data regression models (the pooled,
the fixed effects and the random effects OLS) voluntary disclosure scores of
the DMBs is estimated on selected DMBs’ corporate governance attributes (Board
Composition, Audit Committee Composition, Board Size, frequency of audit
committee meetings and presence of foreigner on board). The study finds that
board composition, audit committee composition and frequency of audit committee
meetings are positively correlated with voluntary information disclosure and
that board size and presence of foreigner on board are negatively correlated
with voluntary information disclosure. The study recommends that regulatory
authorities in Nigeria should ensure standardization in reporting formats for
DMBs to allow for comparability among different DMBs. It is also recommended
that government should provide incentives for more voluntary disclosures to
reduce information asymmetry in the Nigeria Stock Exchange market and attract
more foreign investments into the market, and hence boost the economy. Based on
the findings of this study, it is further recommended that board independence
should be encouraged by the regulatory authorities as it fosters more voluntary
disclosure. Moreover, based on the findings of this study, policies that
restrict board size should be favoured as banks with a larger board size tend
to disclose less voluntary information.
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