Corporate governance and different types of voluntary disclosure

Purpose – The purpose of this paper is to investigate the impact of corporate governance on voluntary disclosure of different types of information in annual reports of Malaysian listed firms. Design/methodology/approach – A linear regression model is used to test the association between the level of voluntary disclosure of five key information categories and corporate governance. The sample consists of 100 firms over three different socio-economic periods: 1996, 2001 and 2006. Findings – There are significant increases in all the key information categories with better communication most pronounced between 1996 and 2001, and a noticeably lower level of communication growth between 2001 and 2006. The strength of a firm’s corporate governance structure clearly influences the voluntary disclosure of information relating to corporate and strategic directions, directors and senior management, financial and capital markets, forward-looking projections and corporate social responsibility in 2001 and 2006. Research limitations/implications – The use of a governance index to arrive at an overall corporate governance score has the potential to mask major underlying relationships of individual governance attributes. The use of the self-constructed disclosure indices may also omit certain information items that are employed in other prior studies. Moreover, the different categories of disclosures are solely constructed on the information disclosed in the annual reports without considering the alternative avenues.Practical implications – The results will assist regulators and policy-makers to better understand the impact of corporate governance on the voluntary disclosure of different types of corporate information in Malaysia. Originality/value – This study generates evidence of the changing scene of management voluntary disclosure practices embedded in the corporate governance framework in a developing country with an emerging capital market

The impact of governance and ownership structure on disclosure patterns transcending major regulatory change in Malaysia

The purpose of this study is to investigate the extent of voluntary disclosures between 2006 and 2009 that transcends major regulatory and governance changes in Malaysia and to assess the association between strength of corporate governance structure, and ownership structure on the extent of voluntary disclosures of Malaysian listed firms over that period. The average level of voluntary disclosure within the annual reports of sample firms increased over the two periods. Further, the extent of voluntary disclosure is significantly positively associated with strength of corporate governance structure in both 2006 and 2009. Firms with concentrated ownership structure are associated with more extensive voluntary disclosures. These findings highlight the importance of an effective governance regime and concentrated ownership structure in reducing information asymmetry and agency costs and thereby enhancing the level of voluntary disclosures. These findings also have practical implications for policy-makers, analysts, auditors and regulators in Malaysia as well as East Asian countries

Employee views of corporate tax aggressiveness in China: The effects of guanxi and audit independence

This study examines the effects of guanxi and audit independence on the corporate tax aggressiveness of Chinese firms. Based on a survey completed by 174 respondents in 2013, we find that two types of guanxi: favour-seeking guanxi and rent-seeking guanxi are significantly associated with ethical judgments of corporate tax aggressiveness. Perceptions of audit independence in-fact are significantly negatively associated with these ethical judgments, whereas audit independence in-appearance is positively associated with them. Further, significantly positive associations exist between perceptions that tax-aggressive activities are good for the firm and its shareholders and favour-seeking guanxi and between these perceptions and stronger client-auditor relations. This study provides insights into the association between types of guanxi and the propensity of firm management to engage in corporate tax aggressiveness

Corporate governance, ownership structure and voluntary disclosure: Evidence from listed firms in Malaysia

This paper examines the impact of corporate governance and ownership structure on voluntary disclosure practices of Malaysian listed firms. The extent of voluntary disclosure is determined for a matched-sample of 100listed firms in three different disclosure regimes during 1996, 2001 and 2006.The findings suggest that regulatory reforms over the 1996 to 2006 period resulted in enhanced corporate transparency and accountability as reflected in more extensive voluntary disclosures. We provide empirical evidence that the extent of voluntary disclosures is significantly associated with the strength of corporate governance structure in 2001 and 2006 and with ownership structure in 1996, 2001 and 1996. The findings of this study are of use to regulators in terms of guiding policy development regarding corporate transparency of publicly listed firms

Market Risk Disclosures and Investment Efficiency: International Evidence from the Gulf Cooperation Council Financial Firms

This study examines the association between market risk disclosures (MRDs) and the investment efficiency of financial firms from six emerging markets in the Gulf Cooperation Council (GCC) region. Based on a sample of 553 firm-year observations over the 2007-2011 period, we find that MRDs are significantly and negatively associated with both under-investment and over-investment and that this association is more pronounced for larger firms. We also find that the association between MRDs and under-investment is moderated during periods of economic distress such as the Global Financial Crisis of 2008 and that the association between MRDs and over-investment is magnified during periods of reduced financial distress. Our results are consistent with the idea that MRDs reduce information asymmetry, which ultimately improves investment efficiency. We contribute to the literature in an emerging market context by providing empirical evidence on the association between MRDs and investment efficiency across six emerging GCC capital markets. This study also fills a gap in the literature by providing evidence on the factors affecting the investment efficiency of financial firms

Financial ratios communication

This study examines the relationship between ownership concentration and the extent of financial ratio disclosures (EFRD) in the 2007 annual reports of Australian listed firms. Using agency theory as theoretical background, it is suggested that firms with more concentrated ownership structures are less likely to provide voluntary disclosure of financial ratios information. The univariate tests demonstrate that profitable firms, those firms audited by Big4 auditors and firms belonging to financial services industry communicate more financia1 ratio information.OLS regressions show that more dispersed shareholding firms' are significantly associated with EFRD. Profitable and larger firms audited by independent and Big4 audit firms additionally reported more extensive financial ratio information

Incentives for corporate tax planning and reporting: Empirical evidence from Australia

This study extends prior research on the willingness of firms to significantly decrease their corporate taxes. It specifically examines the associations between corporate tax avoidance and the reported significant uncertainty of a firm’s tax position, the tax expertise and tax affiliations of its directors, and the performance-based remuneration incentives of its key management personnel. Based on a dataset of 200 publicly listed Australian firms over the 2006–2010 period (1000 firm years), we find that the reported uncertainty of a firm’s tax position, the tax expertise of its directors, and the performance-based remuneration incentives of its key management personnel are significantly positively associated with tax avoidance. Conversely, firms with board members who have at least one tax-related affiliation are significantly negatively associated with tax avoidance

Homologous recombination DNA repair defects in PALB2- associated breast cancers

Abstract: Mono-allelic germline pathogenic variants in the Partner And Localizer of BRCA2 (PALB2) gene predispose to a high-risk of breast cancer development, consistent with the role of PALB2 in homologous recombination (HR) DNA repair. Here, we sought to define the repertoire of somatic genetic alterations in PALB2-associated breast cancers (BCs), and whether PALB2-associated BCs display bi-allelic inactivation of PALB2 and/or genomic features of HR-deficiency (HRD). Twenty-four breast cancer patients with pathogenic PALB2 germline mutations were analyzed by whole-exome sequencing (WES, n = 16) or targeted capture massively parallel sequencing (410 cancer genes, n = 8). Somatic genetic alterations, loss of heterozygosity (LOH) of the PALB2 wild-type allele, large-scale state transitions (LSTs) and mutational signatures were defined. PALB2-associated BCs were found to be heterogeneous at the genetic level, with PIK3CA (29%), PALB2 (21%), TP53 (21%), and NOTCH3 (17%) being the genes most frequently affected by somatic mutations. Bi-allelic PALB2 inactivation was found in 16 of the 24 cases (67%), either through LOH (n = 11) or second somatic mutations (n = 5) of the wild-type allele. High LST scores were found in all 12 PALB2-associated BCs with bi-allelic PALB2 inactivation sequenced by WES, of which eight displayed the HRD-related mutational signature 3. In addition, bi-allelic inactivation of PALB2 was significantly associated with high LST scores. Our findings suggest that the identification of bi-allelic PALB2 inactivation in PALB2-associated BCs is required for the personalization of HR-directed therapies, such as platinum salts and/or PARP inhibitors, as the vast majority of PALB2-associated BCs without PALB2 bi-allelic inactivation lack genomic features of HRD

Development and validation of a targeted gene sequencing panel for application to disparate cancers

Next generation sequencing has revolutionised genomic studies of cancer, having facilitated the development of precision oncology treatments based on a tumour’s molecular profile. We aimed to develop a targeted gene sequencing panel for application to disparate cancer types with particular focus on tumours of the head and neck, plus test for utility in liquid biopsy. The final panel designed through Roche/Nimblegen combined 451 cancer-associated genes (2.01 Mb target region). 136 patient DNA samples were collected for performance and application testing. Panel sensitivity and precision were measured using well-characterised DNA controls (n = 47), and specificity by Sanger sequencing of the Aryl Hydrocarbon Receptor Interacting Protein (AIP) gene in 89 patients. Assessment of liquid biopsy application employed a pool of synthetic circulating tumour DNA (ctDNA). Library preparation and sequencing were conducted on Illumina-based platforms prior to analysis with our accredited (ISO15189) bioinformatics pipeline. We achieved a mean coverage of 395x, with sensitivity and specificity of >99% and precision of >97%. Liquid biopsy revealed detection to 1.25% variant allele frequency. Application to head and neck tumours/cancers resulted in detection of mutations aligned to published databases. In conclusion, we have developed an analytically-validated panel for application to cancers of disparate types with utility in liquid biopsy