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3.1   voluntary disclosure check list                                                62
4.1 descriptive information                                                      66
4.2 list of companies based on market sector                          67
4.3 Tested variables                                                                 67
4.3.1 correlation matrix                                                           68
4.3.2 static regression results                                                  69
4.3.3 static regression results                                                  70
4.3.4 static regression results                                                  71
4.3.5 static regression results                                                  72
4.3.6 static regression results                                                  73

This study investigated the association between voluntary accounting disclosure and corporate characteristics in the Nigerian financial and listed sector. Using the judgmental sampling technique, a total of 30 listed firms have been selected for this study based on the availability of their annual reports. Also, using the content analysis method of eliciting data, a scoring scheme was used for measuring the extent of voluntary Accounting disclosure in the annual report. The data was analyzed using the E-view computer software 3.1. The study observed that a positive level of voluntary accounting disclosure y listed company. While no association between profitability and voluntary accounting disclosure. Also it was found that compliance has improved. This study therefore calls for regulatory bodies to put in place stronger reporting framework in order to still improve the level of voluntary accounting disclosure among listed firms in the financial and non-financial industry.

Title Page                                                                                 i
Declaration                                                                              ii
Dedication                                                                               iii
Acknowledgement                                                                    iv
Table of Contents                                                                     v
List of Tables                                                                           vi
Abstract                                                                                   vii
1.1   overview of the problem                                                   1
1.2   statement of the problem                                                 4
1.3   purpose of the study                                                                7
1.4   research questions                                                           8
1.5   research hypotheses                                                                8
1.7   scope of the study                                                            9
1.8   limitation of the study                                                     10
1.9   definition of terms                                                           12
1.10 organization of the study                                                 15
2.0   Introduction                                                                     17
2.1   corporate characteristics                                                  17
2.1.1 board size                                                                       18
2.1.2 profitability                                                                     19
2.1.3 leverage                                                                           21
2.1.4 audit size                                                                                21
2.2 determinant of corporate financial reporting                      23
2.3   motives for voluntary disclosure                                     26
2.4   benefits of voluntary disclosure                                               29
2.5   the extent of disclosure                                                   31
2.6   development of accounting standards (National and )
International                                                                            32
2.7   international accounting standards board                      33
2.8   theory governing financial reporting                                        38
2.8.1 the positive accounting theory                                                38
2.9   compliance on IAS/IRS and financial reporting                       47
2.10 association between board size and voluntary accounting
disclosure                                                                                52
2.10.1 association between profitability and voluntary
accounting disclosure                                                      53
2.10.2 Association between leverage and voluntary
accounting disclosure                                                      54
2.10.3 association between audit size and voluntary
association disclosure                                                     56
3.0   Introduction                                                                     58
3.1   research design                                                               58
3.2   sampling procedure sample size determination                       59
3.3   data collection method                                                    60
3.4   operational measures of the variables                              61
3.5   analysis of data                                                                        62
4.1   Introduction                                                                     66
4.2   descriptive statistics of voluntary discourse                     66
4.3   testing of hypothesis suing secondary data                     68
4.3.1 correction matrix                                                            68
4.3.2 hypothesis one                                                               69
4.3.3 hypothesis two                                                                        70
4.3.4 hypothesis three                                                             71
4.3.5 hypothesis four                                                               72
4.3.6 hypothesis five                                                                        73
5.0   Introduction                                                                    75
5.1   summaries of findings                                                     75
5.2   conclusion                                                                       78
5.3   recommendations                                                            79
Bibliography                                                                            81
Appendices                                                                              86

According policy choice and incentive considerations affect the quality of accounting disclosure and the communication between firms and users of accounting information. There are cases where managers influence the reported earnings in order to maximize their interest, such as to improve their reputation and reinforce the stock returns and their compensation plans (Fields, Lys, and Vincent, 2001). Managers also tend to influence their accounting numbers in order to meet their financial obligations and abide by the debt covenants that are set by lenders (Lambert, 2001). The violation of debt covenant would be a negative signal of corporate performance, would therefore have negative implications for the creditability and stock behaviour of the firm.
The informativeness of disclosed accounting information varies from firm to firm Kothari, and Robbin, 2000). Firms are usually more eager to disclose good information, while they tend to delay the announcement of bad information (Aboody and Kaznik, 2000). Thus, good information is essentially reflected in stock returns when it is announced, while bad information constitutes new information to investors (Hand, Holthanuse, and Leftwich, 1992). Firms with informative disclosures tend to exhibit larger analyst following and less dispersion in analyst forecasts (Lang and Lundholm, 1993).
The extent to which voluntary disclosure is effective and contributes to the efficient allocation of resources in the stock market is closely related to the credibility of the accounting information that is disclosed. The managers earnings forecasts with the actual financial results. The literature shows that the stock market responds positively to forecasts of earnings increases, but negatively to forecasts of earning decreases (Ajinkya and Gift, 1984).
The business environment has witnessed changes over the years, mainly influenced by globalization and technological innovation. In recent years, there has been substantial increase in trading activities at the stock Exchanges worldwide and Nigeria is not left out. For example, the market capitalization at the Nigerian Stock Exchange was N763.9 billion in 2002; it grew to N2.112 trillion in 2004 companies worldwide are now vying to penetrate international capital markets. The disclosure of adequate and reliable information is necessary to penetrate these international markets. Those competing for funds in the international capital arena have been found to comply with disclosing mandatory requirements and in addition disclose significantly more voluntary accounting information than enables them to compete globally (Meek, Roberts and Gray, 1995).
Corporate transparency is determined by the information it disclosure in its financial report. Accurate, relevant and reliable disclosure are seen as means of enhancing corporate image, reducing cost of capital, and improving marketability of shares. High-quality accounting information facilities the acquisition of short and long term fund and also enables management to properly account for the resources put in their care. Thus, it acts as a significant spur to the growth and development of money and capital markets, which are fundamental to the smooth running of any economy. Meek et al (1995) submit that effective functioning of capital markets, however, significantly depends on the effective flow of information between the company and its stakeholders.
In the Nigeria context, compressive studies of Nigerian listed companies have been conducted by World Bank Group. It is observed that the Nigerian financial reporting practices are deficient (World Bank, 2004). Apart from the studies conducted by the World Bank, disclosure practices by Nigerian companies have been empirically investigated by Wallace (1988), Okike (2000), and Ofegbu and Okoye (2006). Their observation is quite similar in that they all found the Nigerian corporate reporting practices to be weak.
The current global financial and economic crunch has resulted in increased attention to improve and enforce financial reporting disclosures worldwide in order to reform the global economy. Nigeria is recently taking steps to align all corporate reports to the international financial Reporting standards (IFRSs) as a means of enhancing full disclosure and strengthening stakeholder confidence. Nigeria Stock Exchange has directed all companies that are listed on the exchange to adopt the IFRSs by December 2011 while the Central Bank of Nigeria has also told Nigeria banks to adopt the IFRSs by December 2010 (Egedegbe, 2009).
Published annual reports are required to provide various users shareholders, employees, suppliers, creditors, financial analysis, stockbrokers, management, and government agencies with timely and reliable information useful for making prudent, effective and efficient decisions. The extent and quality of disclosure within these published reports vary from company to company and also from country to country.
Literature reveals that the level of reliable and adequate information by listed companies in developing countries lags behind that in developed ones and government regulatory forces are less effective in driving the enforcement of existing accounting standards (Ali, Ahmed and Henry, 2004). Non-disclosure results from immature development of accounting in developing nations (Osisioma, 2001). The government regulatory bodies and the accountancy profession in these nations suffer from structural weaknesses which could encourage corporate fraud at the expense of those that have economic and propriety interest in the business environment.
The voluntary disclosure of financial information in corporate annual reports and their determinants have attracted considerable research attention in the developed countries than developing ones (Akhtarudddin, 2005: and Barako, 2007). Discoveries in the developed countries most especially in the European Union (EU) have aided in the government to revamp the compliance mechanisms. They have also assisted the government in issuing out directives that facilitate the harmonization process and invariably bring all community companies up to a reasonable level of disclosure.
It is often alleged, however, that listed companies do not fully comply with the disclosure requirements stipulated by the regulatory agencies (Akhtaruddin, 2005). Emerging nations have been under pressure to improve their quality of corporate financial reporting. According to Ali et al, (2004), the government regulatory bodies and the accountancy profession of emerging nations suffer from structural weakness and often take a lenient attitude towards default of accounting regulations. Consequently private and institutional investors (local and foreign) are hesitant in investing in such emerging economics due to lack of transparency.
The lapse in the financial reporting system had led to the presentation of the financial reporting Council (FRC) Bill to the National Assembly in Nigeria. The Bill is still currently under debate at the National Assembly. The FRC Act when enacted would replace the NASB Act with enlarged functions (Nnadi, 2009). It is expected to go a long way in strengthening the financial reporting system in Nigeria and to ensure credence of financial reports and corporate disclosure practices among Nigerian companies.
Incessant changes in the global business and reporting environment new developments and updates on the local and international accounting standards, changes in corporate structure, and legislation call for a constant update in the research in this area of study. Additional empirical evidence on voluntary disclosures and the factors influencing them in Nigeria will enhance the quality of literature in this field of study. Thus, this makes a research of this nature of paramount interest.
This study investigates the disclosures practices of listed companies in Nigeria to see how they comply with voluntary rules established by the regulatory bodies. In addition, it examines the association between company characteristics and the extent of disclosure. This study will contribute to the growing literature on the determinants of corporate voluntary disclosure level and the findings of the study would be of immense interest to listed companies, investors, and those involved, and those involved in standard setting processes.
As far as we are aware there is currently no published study examining the determinants of corporate disclosures reporting by Nigeria own firms. The present study seeks to fill this gap by testing a set of hypothesis on the influence of several factors on the level of voluntary information disclosed by a sample to Nigeria own companies in their financial statements.
The purpose of the study is to provide empirical evidence to the disclosure practices of listed companies in Nigeria. Specifically, the objectives of this research are:
i.      Empirically determine the extent of compliance of the listed financial and non- financial Nigerian companies with the disclosure requirements of Nigerian Accounting Standard Board (NASB);
ii.     Examine empirically the relationship between board size and voluntary accounting disclosure;
iii.    Examine whether there is a relationship between profitability and voluntary accounting disclosure;
iv.    Examine whether there is a relationship between leverage and voluntary accounting disclosure and
v.     Examine the relationship between auditor size and voluntary accounting disclosure.
The research objectives are guided by the following research questions.
i.      What is the extent of compliance of listed financial and non-financial Nigerian companies with the required disclosures of the Nigerian Accounting Standards Board (NASB)?
ii.     What is the relationship between board size and voluntary accounting disclosure?
iii.    Does profitability have any effect on voluntary accounting disclosure?
iv.    What is the relationship between leverage and voluntary accounting disclosure?
v.     Does auditor size affect voluntary accounting information disclosure practices of listed Nigerian companies?
In this study, four hypotheses are formulated to achieve the research objectives i to iv respectively. The hypotheses are hereby stated in the null and alternative forms.
H01: There is no significant association between listed financial and Non- financial companies with Voluntary Accounting disclosure.
H02: There is no significant association between board size and the extent of Voluntary Accounting disclosure by Nigerian listed companies.
H03: There is no significant association between profitability and the extent or Voluntary Accounting disclosure by Nigerian listed companies.
H04: There is no significant relationship between leverage and voluntary accounting disclosure.
H05: There is no significant relationship between auditor size and voluntary accounting disclosure.
All hypothesize are stated in the null.
Accurate corporate reporting is a necessary tool for the short and long term survival of any nation. It aids budgeting, planning and decision making. It had been suggested by previous researchers that institutions in developed economy cannot be transplanted in developing economics and so research on disclosure practices in a country like Nigeria will enable us to have a thorough understanding of the nature of corporate reporting in developing countries (Wallace, 1988). Disclosure practices by Nigerian companies were empirically investigated by Wallace (1988), Okike (2000), Adeyemi (2006) and Ofoegbu and Okoye (2006) in the past, and they all discovered that corporate reporting practices in Nigeria is deficient.
The study is significant to government, investors, business management, regulatory bodies, educators, researchers, accountants, auditors and scholars particularly in the field of accounting. This research seeks to make theoretical and practical contributions to the field of accounting in the area of accounting disclosures. It will particularly enhance the quality literature in the field of accounting in Nigeria researchers in this field would benefit from the study because it can serve as a bench mark for future research on corporate disclosure it throws more light and adds to understanding on the corporate disclosure practices which would be of advantage to educators and students.
With the outcome of this research, the regulatory authorizes, such as the Nigerian Accounting Standards Board (NASB), Nigerian Stock Exchange (NSE) and Securities and Exchange Commission (SEC) would be able to ascertain the extent of compliance with the mandatory national standards. This will help them to issue out necessary compliance directives and improve the compliance mechanisms to ensure a reasonable level of compliance by all companies. With the knowledge of the extent of compliance with the IAS/IFRSs, the government will enforce directives that would help in facilitating the harmonization process with the international standards.
In other to achieve the objectives of this study, corporate annual reports for the period 2009-2010 will be analyzed. Also, using the judgmental sampling technique, a total of 30 firms from the financial and non-financial sector of the Nigerian stock exchange was selected for this study (see appendix). The preference for these firms is motivated by the fact that their annual reports are easily accessible, making it simpler for comparisons. More so, they are directly responsible for the financing of most firms from the manufacturing industry.
Based on the nature of this research, two approaches were adopted in executing the objectives: survey and content analysis method. The survey research entailed administering questionnaire to a random sample of auditors, accountants and accounting information users in Rivers State. The primary survey was conducted during the second half of year 2010 to the first quarter of 2011. It identifies the opinion of respondents on disclosure practices of listed Nigerian companies and on consequences of non-disclosure. Due to the nature of research, the respondents are limited to prepares, auditors and knowledgeable users conversant with the disclosure requirements of the accounting standards.
The annual report (content analysis) research entails a sample of companies from the equity main list of the Nigerian Stock Exchange. The study covers the annual reports with period ending, January to December 2010.
The companies are generated from both the financial and non-financial sectors. A researcher developed check is constructed containing 20 information disclosure items. The annual report study is restricted to the first-tier market of the Nigerian stock exchange because it is of paramount interest to investors. The second tier market and companies not quoted at the Nigerian stock exchange are not put into consideration due to non availability of data and time constraint. Moreover, they are outside the scope of this work.
Based on previous studies, availability of data and its relevance to the socio-economic environment of Nigeria, only four independent variables are selected as proxies for corporate characteristics. These variables are: Board size, profitability, leverage, size of audit firm.
A limitation would be anything beyond the ability of the researcher to control that affect the internal validity of the study. The internal validity of an experiencing is the extent to which extraneous variables have been controlled by the researcher, so that any observed effect can be attributed solely to the treatment of the variable (Gall et al 1996). 
In course of carrying out this research a number of limitations was encountered by the researcher, which will include:
Lack of sufficient time constituted one of the greatest problems the researcher encountered; however some personal activities were shelved to allow for some time into this work.
The study sample was restricted due to fund; this is because a wider coverage would require huge funding which the researcher cannot afford. This problem was overcome through raising funds from friends and relatives.
This also constituted yet another problem as some workers were not be willing to give vital and necessary data, however effort were made to create rapour with them to win their co-operation.
Accounting Standards: are policy documents or rules that guide the preparation and presentation of financial information. KPMG.
Convergence: refers to the process of narrowing difference between IRFS and the accounting standards of countries that retain their own standards.
Corporate Attributes: are company characteristics that can influence corporate disclosure.
Disclosure: is the appearance of quantitative or qualitative economic information relating to business enterprises in the annual reports.
GAAP is the generally accepted accounting principles
International Accounting Standard (ISA): is a body of accounting standard issued by the International Accounting Standards Committee (IASC) now known as IASB.
International Accounting Standard Board (IASB) is the international standard setting body responsible for issuing international Financial Reporting Standards adopted by the IASB accounting standards setting body.
Nigeria Accounting Standards Board (NASB): is the Nigerian accounting standards setting body responsible for issuing statement of accounting standards (SAS).
Statement of Accounting Standard (SAS): is the accounting standard issued by the Nigerian Accounting Standards Board.
Voluntary Disclosure: refers to the discretionary release of financial information over and above the mandatory disclosure.
This study is organized into five chapters. Chapter one deals with the context of the problem, purpose of the study, research questions, and hypotheses, significance of the study, definition of terms and the limitations of the study. Chapter two deals with the review of related literature on the subject matter. Chapter three attempts to describe the research design, sampling procedure, sample size determination, data collection method, operational measures of the variable and the data analysis techniques. Chapter four deals with the presentation and analysis of data. Chapter five presents the discussion, conclusions, and recommendations and finally, there are suggestions for further research.