Journal of Economics and Trade

Abstract

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.