Does The Corruption Perception Level of A Country Affect Listed Firms' IFRS 7 Risk Disclosure Compliance?

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Does the Corruption Perception Level of a Country Affect Listed Firms' IFRS 7
Risk Disclosure Compliance?
Article in Corporate Governance · June 2017

DOI: 10.1108/CG-10-2016-0195
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Does the corruption perception level of a country affect listed firms’ IFRS 7 risk disclosure compliance?
Ben Kwame Agyei-Mensah,
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Does the corruption perception level
of a country affect listed firms’ IFRS 7
risk disclosure compliance?
Ben Kwame Agyei-Mensah
Abstract Ben Kwame Agyei-

Purpose – This paper aims to examine the relationship between corporate governance, corruption and Mensah is Associate
compliance with International Financial Reporting Standard (IFRS 7) risk disclosure requirements in Professor at the
listed firms in two Sub-Saharan Africa countries: Botswana and Ghana. This study tries to test whether Department of Finance
the transparency level of a country has any impact on the transparency level of its firms. and Accounting,
Design/methodology/approach – The study uses 174 firm-year observations between the period Solbridge International
2013-2015 for listed firms in the two countries. Each annual report was individually examined and coded School of Business,
to obtain the disclosure of corporate risk disclosure index. Descriptive analysis was performed to
Daejeon, Korea.
provide the background statistics of the variables examined. This was followed by regression analysis,
which forms the main data analysis.
Findings – The results suggest that the extent of risk disclosure compliance over the three-year period
is, on average, 63 and 53 per cent for Botswana and Ghana, respectively. The differences in the
disclosure levels in the two countries can be attributed to the different levels of corruption in the two
countries. One way of hiding corrupt practices is for companies to disclose scanty information.
Originality/value – This is one of the few studies in Sub-Saharan Africa that tests the transparency
levels of listed firms in the two countries by considering the impact of corporate governance factors on
IFRS 7 risk disclosure compliance. The findings of this study will help market regulators in Ghana,
Botswana, the Sub-Saharan Africa Security and Exchange Commission (SEC) and the Sub-Saharan
Africa exchanges in evaluating the adequacy of the current disclosure regulations in their countries.
Keywords Risk disclosure, IFRS 7, Corporate governance and disclosure,
Botswana stock exchange, Ghana stock exchange
Paper type Research paper
Introduction
This paper investigates the relationship between corruption, corporate governance, extent
and determinants of risk disclosure compliance with the requirements of International
Financial Reporting Standard (IFRS 7) by firms listed on the Ghana Stock Exchange (GSE)
and Botswana Stock Exchange (BSE). Corruption is a worldwide problem including
advanced economies, however, what makes developed countries different from the
developing countries is the fact that in developed countries, systems have been put in
place to check the incidence of corruption. According to Agyeman et al. (2013), though
Ghana has sufficient laws and regulations with respect to corporate governance, the major
challenge is the absence of active devices for their effective enforcement. This leaves
Ghana deficient in corporate governance practices. It is also to be noted that poor or weak
corporate governance breeds corruption (Xun, 2005). Botswana and Ghana are widely
apart when it comes to levels of perceived corruption. The 2014 Transparency JEL Codes – G3, M1, M2, M4
Received 16 October 2016
International’s transparency list has Botswana on 31st and Ghana on 61st positions, Revised 24 February 2017
respectively. While Botswana is the least corrupt country in Africa, Ghana is one of the most Accepted 4 April 2017
DOI 10.1108/CG-10-2016-0195 VOL. 17 NO. 4 2017, pp. 727-747, © Emerald Publishing Limited, ISSN 1472-0701 CORPORATE GOVERNANCE PAGE 727
corrupt countries. It is therefore important to research into how the levels of corruption
perception in these countries affect compliance with IFRS 7 risk disclosure requirements by
firms listed on the respective stock exchanges.
Risk disclosure has attracted a lot of attention following the recent financial crises. As a
consequence, there has been a demand for corporate risk disclosure by stakeholders. Risk
disclosure provides information to users of financial reports, as it enables them to assess
the risks affecting firms’ future economic performance.
According to Deumes (2008, p. 122), “Studying risk disclosure is important because
corporate transparency about risk is vital for the well-functioning of capital markets [. . .]. By
providing investors with information about the risk associated with pursuing the company’s
strategic goals, managers can increase transparency and eliminate disparities between
what investors understand and expect and what management can deliver”.
Many studies have so far investigated the extent and determinants of risk disclosures
(Abraham and Cox, 2007; Hassan, 2009; Amran et al., 2009; Al-Shamari, 2014;Tauringana and
Chithambo, 2016). Tauringana and Chithambo (2016), in their study, found that the extent of
compliance with IFRS 7 was 40 per cent and that non-executive directors, size and gearing are
the factors determining the disclosure of IFRS 7 compliance. Hassan (2014) found that firm size
and leverage are the most important determinants of the risk disclosure quality. To the best of
the author’s knowledge, no study has been done specifically on a country’s level of corruption
and risk disclosure in accordance with IFRS 7 requirements in Sub-Saharan Africa. The
research, therefore, endeavours to close the gap and makes a significant contribution by
providing much needed additional evidence in this area.
This study is important due to the fact that corruption is one of the major factors that retards
Africa’s development.
The study seeks to answer the following questions:
Q1. To what extent do firms listed on the BSE and GSE comply with risk disclosure
requirements of IFRS 7?
Q2. What are the significant predictors influencing the level of corporate risk disclosure
in the annual reports of firms listed on the BSE and GSE?
This paper provides a contribution to the risk-disclosure literature in several respects. First,
it develops a framework to assess the extent of risk disclosure requirements of IFRS 7,
which previous literature failed to do. Second, it is the first study that comparatively
evaluates IFRS 7 risk disclosure requirements in Botswana, the least corrupt country in
Africa, and Ghana, one of the most corrupt countries in Africa. Third, it examines the drivers
of the extent and quality of risk disclosure requirements in the two countries, which may
give us more insight into how listed firms in Botswana and Ghana have adjusted their
disclosure strategies, not only to satisfy the IFRS 7 requirements but also to meet the
demand for more transparency. Fourth, the paper also provides evidence that listed firms
do not fully comply with the requirements of IFRS 7.
The remainder of the paper is structured as follows: The next section reviews previous
literature and develops research hypotheses. The section that follows develops a
methodology to assess IFRS 7 compliance. Then the empirical findings of the study are
presented. Finally, conclusion, limitations and suggestions for further researches are
discussed.
Literature review and hypotheses development

Regulation of accounting in Botswana
Companies in Botswana are required to prepare accounts in accordance with both local
and international regulations. The Companies Act, 2003 (Cap 42:01) requires all
PAGE 728 CORPORATE GOVERNANCE VOL. 17 NO. 4 2017

companies incorporated in Botswana to prepare annual financial statements. The Act
prescribes the basic content and form of financial statements. The No. 12, Accountants Act
of 2010 was passed by Botswana parliament on 3 September 2010. This section enacts 21
objectives of Botswana Institute of Chartered Accountants, of which those related to
accounting standards are: “(c) Promote high quality accounting, auditing and financial
reporting standards and practices, in line with the profession; (e) Supervise the
accountancy profession in the public interest; (f) Promote the highest standards of
professional ethics and business conduct of, and enhance the quality of services offered
by professional accountants; (t) Keep abreast of and disseminate to its members
international developments affecting the accounting profession” (Government of Botswana,
2010).
Regulation of accounting in Ghana

Companies in Ghana are required to prepare accounts in accordance with both local and
international regulations. Section 123 of the Companies Act 179, 1963, requires every company
to maintain proper books of accounts of its assets and liabilities, income and expense.
Section 124 requires companies to publish their statements of profit and other comprehensive
income; statement of financial position; statement of changes in equity; and cash flow
statement and notes to the accounts to members, not later than 18 months after incorporation
and annually subsequently. Sections 125, 126 and 127 deal with the presentation and
components of the income statement, statement of financial position and group accounts,
respectively. The Banking Act 2004, Act 673 as amended in 2007, Act 738, Insurance Act 724,
2006, and other similar legislations have sections dealing with financial reporting in line with the
company’s act of Ghana and the required accounting framework.
Prior to the adoption of IFRS in Ghana, the Generally Accepted Accounting Principles were
the Ghana National Accounting Standards. The Ghana National Accounting Standards
were partly based on UK accounting standards; Statements of Standard Accounting
Practices (SSAPs) and pre-IFRS, International Accounting Standards.
World Bank (2004) conducted a review of accounting and auditing practices in Ghana,
which was presented in its Report on Observance of Standards and Codes. This was to
“evaluate the weaknesses and strengths of the accounting and auditing requirements, and
to review the reporting requirements against actual practices” (ROSC, 2004). One of the
major weaknesses identified in the report was that the Ghana National Accounting
Standards were outdated and differed significantly from the International Accounting
Standards. The World Bank therefore recommended that Ghana should adopt the IFRS.
Hence, The Institute of Chartered Accountants’ proclamation that all financial reports from
2007 onwards should comply with the IFRS.
Overview of International Financial Reporting Standard 7

The objective of IFRS 7 is focused on financial instrument disclosures and is based on the
notion that entities should provide disclosures in their financial statements that enable users to
evaluate the significance of financial instruments for the entity’s financial position and
performance. Further, IFRS 7 places emphasis on disclosures about risks associated with both
recognized and unrecognized financial instruments and how these risks are managed.
IFRS 7 is divided into two main parts. The first is related to the significance of financial
instruments for financial position and performance, which is not considered in this paper.
The second concerns the nature and extent of risks arising from financial instruments and
how these risks are managed. This part is relevant for the current study’s research analysis.
IFRS requires certain disclosures to be presented by category of instrument based on the
IAS 39 measurement categories. Certain other disclosures are required by class of
financial instrument. For those disclosures, an entity must group its financial instruments
VOL. 17 NO. 4 2017 CORPORATE GOVERNANCE PAGE 729

into classes of similar instruments as appropriate to the nature of the information presented
(IFRS 7.6).
The two main categories of disclosures required by IFRS 7 are:
1. information about the significance of financial instruments; and

2. information about the nature and extent of risks arising from financial instruments.
These disclosures must be both qualitative and quantitative. Qualitative disclosures
describe management objectives, policies and processes for managing those risks.
Quantitative disclosures provide information about the extent to which the entity is exposed
to risk, based on information provided internally to the entity’s key management personnel.
IFRS 7 “Financial instruments: Disclosures”, applies to financial and non-financial
institutions. Section 33 of IFRS 7 requires the typical risks to include but not limited to, credit
risk, liquidity risk and market risk. For each type of risk arising from financial instruments,
an entity shall disclose the exposures of risk and how they arise; its objectives, policies and
processes for managing the risk; and the methods used to measure the risk. IFRS 7 is an
example of a mandatory disclosure; hence, all firms which prepare financial reports using
IFRS should comply with the disclosure requirements.
Studies on International Financial Reporting Standard 7 compliance

Several studies have been conducted on compliance with financial instruments’
accounting standards. The thrust of most of the compliance research has been to use the
level of compliance as part of a broader design, including analyzing high or low levels
(Hodgdon et al., 2008) and investigating determinants of disclosure (Lopes and Rodrigues,
2007; Hassan et al., 2008). Lopes and Rodrigues (2007) studied Portuguese listed firms’
adoption of IAS 32 and IAS 39 and found that compliance with mandatory reporting
requirements were poor (mean of 44 per cent). In their study, which examined financial
instruments disclosure, they found that there were low levels of compliance. Tauringana
and Chithambo (2016), in their study of firms in Malawi, found that the extent of compliance
with IFRS 7 was 40 per cent and that non-executive directors, size and gearing are the
factors determining the disclosure of IFRS 7 compliance. Hassan (2014) found that firm size
and leverage are the most important determinants of the risk disclosure quality. Jobair et al.
(2014), in their study of specialized banks of Bangladesh, found that IFRS 7 compliance
was 55 per cent. None of the above studies examined the relationship between a country’s
corruption perception level and compliance with IFRS 7 requirements, hence the need for
this study.
Disclosure theories
Three theories have been used to explain the disclosure of information in corporate reports.
These theories have been used as they all attempt to explain and predict accounting
practice. These are agency theory, signaling theory and legitimacy theory. According to
agency theory (Jensen and Meckling, 1976; Fama and Jensen, 1983), disclosure of risk
information is used as a means to overcome agency problem between management and
owners of the company (Healy and Pelapu, 2001). If shareholders and creditors do not
observe companies’ risk management activities directly, then they will tend to institute
monitoring systems to increase the flow of information about those activities, and to reduce
uncertainty (Linsmeir et al., 2002). Under the signaling theory, developed by Spencer,
financial reporting is said to stem from the management’s desire to disclose its superior
performance where good performance will enhance the management’s reputation and
position in the market for management services, and good reporting, which includes
disclosing risk information, is considered as one aspect of good performance. Based on
this theory, managers disclose adequate information in the financial reports to convey
specific signals to current and potential users. Morris (1987) argued that there is

consistency between both agency theory and signaling theory. He posits that at least one
set of sufficient conditions of signaling theory is consistent with one set of sufficient
conditions of agency theory. To support his stance, he identified that rational behavior is
common to both theories, and information asymmetry in signaling theory is implied by the
positive monitoring costs in agency theory. He, therefore, suggested that a combination of
the two theories could provide a better prediction of disclosure for more accounting
reporting. Legitimacy theory is another common perspective that has been adopted to
understand organizational forms and structures based on the assumption that a
corporation has to maintain its legitimacy for its survival (Meyer and Rowan, 1977).
Legitimacy theory is based on the notion of a contract between a firm and its stakeholders
on the premise that firms signal their legitimacy by disclosing certain information in the
annual report, according to Shocker and Sethi (1974). There have been a handful of
investigations (Chalmers, 2001; Chalmers and Godfrey, 2004; Lopes and Rodrigues, 2007)
into the theoretical rationale underlying financial instruments disclosures, and these studies
have occasionally found limited evidence supporting legitimacy theory.
In trying to justify the use of legitimacy theory in financial instruments disclosure research
Bamber (2011) stated: “Financial instruments disclosures are particularly relevant in this
context given the information asymmetry often associated with derivatives positions and
financial performance. It is thus often necessary for companies to justify legitimate

derivatives usage, practices, policies and management to shareholders and other user
groups” (Bamber, 2011, p. 89).
Corporate governance and risk disclosure

Enhancing the transparency of firms’ financial reports and improving the disclosure quality
is one of the corporate governance principles (Hassan, 2014). According to Elliot and Elliot
(2013, p. 804), A good governance system will ensure that:
comprehensive risk management occurs as a normal course of events; and
there is transparent disclosure to shareholders and regulators of the nature, extent and
management of these risks.
According to Cabedo and Tirado (2004), risk disclosure can play a vital role by informing
investors and other stakeholders about the uncertainty surrounding the business, thus
helping them to make more effective decisions. Taylor et al. (2010) argued that companies
with good corporate governance structures are more effective in risk management and
disclosure. Oliveira et al. (2011) investigated the association between corporate
governance, company characteristics and corporate risk disclosure, using data from
Portugal, and found that non-executive directors, company size and leverage were
positively associated with risk disclosure.
Hypotheses development
Based on the results of prior theoretical and empirical research, five corporate governance
mechanisms are included in the hypotheses development.
Board size. Managing risk is an important consideration for the board of directors. The
board of directors plays an important role in a company’s corporate governance.
According to agency theory, larger boards incorporate a variety of business expertise,
leading to more effectiveness in the boards’ monitoring role, resulting in better corporate
accountability and disclosure (Singh et al., 2004). Prior risk disclosure studies found mix
results. Studies by Collins et al. (2014) and Lajili (2009) found a positive association
between board size and levels of firm risk disclosure. Prior research suggests a positive
association between the number of directors and the existence of an audit committee
(Bradbury, 1990; Piot, 2004). It can be argued that a larger board is likely to entail more
resources for the board to allocate. Whilst Beasley et al. (2005) and Elzahar and Hussainey

(2012) found insignificant results. From the literature reviewed, the following hypotheses will
be tested:
H1. There is no relationship between board size and extent of risk disclosure
compliance.
Proportion of non-executive directors. Non-executive directors are members of companies’
boards who are not employed by the firm. They are there to act as a control mechanism as
they perform an independent monitoring function. As the objective of the IFRS 7 is to
improve the information available to investors by requiring the provision of information that
enables users to evaluate the significance of financial instruments for the entity’s financial
position and performance, the proportion of non-executive directors will more likely
encourage compliance with the disclosure guidelines. According to Abor and Biekpe
(2007), the proportion of non-executive board members on the board is important in
explaining the firm’s performance. For example, Song and Windram (2004) and Uzunet
et al. (2004) found that independent board committees lower the level of both financial
reporting problems and corporate fraud. Most of the extant evidence indicates that
voluntary disclosure increases with the number/proportion of independent directors on the
board (Navarro and Urquiza, 2015; Chen and Courtenay, 2006; Patteli and Prencipe, 2007;
Lim et al., 2007; Donnelly and Mulcahy, 2008). However, there is also evidence of no
significant positive relationship between the proportion of independent directors on the

board and the extent of voluntary disclosure (Ho and Wong, 2001; Haniffa and Cooke,
2002) and even of higher number of independent directors reducing voluntary disclosure
(Eng and Mak, 2003; Barako et al., 2006). Vandemaele (2009), Elzahar and Hussainey
(2012) and Ismail and Abdul Rahman (2012) found no relationship between non-executive
directors and risk disclosure, while Lajili (2009), Abraham and Cox (2007), Deumes and
Knechel (2008) and Collins et al. (2014) found a positive relationship between
non-executive directors and risk disclosure. From the literature reviewed, it is hypothesized
that:
H2. There is no relationship between the proportion of non-executive directors on the
board and the extent of risk disclosure compliance.
Block ownership concentration It is expected that ownership concentration will influence
the disclosure of risk information. According to Kim and Lee (2003), an individual with
substantial amount of interest in a company will be more interested in the performance of
a company compared to the shareholders who own smaller number of shares. Akhtaruddin
and Haron (2010) studied the effect of ownership concentration on voluntary disclosure
and found that ownership concentration reflects the influence of the majority shareholders.
Eng and Mak (2003) found no relationship between block holder ownership and disclosure.
In their study, Chau and Gray (2010) indicated that wider ownership is positively related to
voluntary disclosure. From the literature reviewed, it is hypothesized that:
H3. There is no relationship between block ownership concentration and extent of risk
disclosure compliance.
Institutional ownership. Institutional investors are viewed as an important corporate
governance mechanism, according to Shleifer and Vishny (1997). Because of the large
stake they own in the firm, they have the motivation to monitor management’s behaviour
(Jensen, 1993). They play an important role in aligning management interest with those of
the shareholders (Solomon, 2010). Empirical evidence by Carson and Simnet (1997),
Bushee and Noe (2000) and Barako et al. (2006) found a significant positive relationship
between institutional ownership and voluntary disclosure. Previous research results by
Ajinka et al. (2005), Xie et al. (2003), Charitou et al. (2007) and Wan-Hussin (2009) posit that
institutional investors help increase corporate transparency by disclosing corporate risk
information. Schadewitz and Blevins (1998), on the other hand, found a negative
association between institutional ownership and disclosure level in interim disclosures. Eng
and Mak (2003) found insignificant relationship between the two variables. Companies with

a concentrated ownership structure do not have to disseminate more risk information
because the main shareholders can easily obtain it, as they usually have access to that
information. From the literature reviewed above, the following hypothesis will be tested:
H4. There is no relationship between institutional ownership and extent of risk disclosure
compliance.
Audit committee independence. Prior studies have suggested that the existence of an
independent audit committee is a relevant variable that explains variation in corporate risk
disclosures. According to Oliveira et al. (2011), audit committees are tasked to review the
company’s internal control and risk management systems. However, for an audit committee
to be effective, it should be independent and include non-executive directors (Turley and
Zaman, 2004). Mangena and Pike (2005) stated that the existence of an audit committee
provides the necessary expertise and is also associated with reliable financial reporting by
helping to reduce the incidence of irregularities and errors.
As companies become larger, complex and diversified, it becomes more difficult for
boards to retain effective control and to manage risks. As a consequence, responsibility for
control is often delegated to employees. Where such delegation occurs, it is
understandable that boards would require support from organization-wide monitoring
mechanisms, such as audit committees (Fraser and Henry, 2007). Therefore, companies
with a higher proportion of non-executive directors serving on their audit committee are
likely to attach greater importance to compliance with IFRS 7 risk disclosure requirements
and to the reduction of agency costs. From the literature reviewed above, the following
hypothesis will be tested:
H5. There is no relationship between audit committee independence and extent of risk
disclosure compliance.
Methodology
Sample
The data used in the empirical analysis were derived from the financial statements of listed
firm on the BSE (28) and GSE (30), during a three-year period of 2013-2015. Three years
were selected because firms’ disclosures tend to persist across years (Bushee et al., 2003;
Skinner, 2003; Graham et al., 2005). Once managers decide to disclose IRFS 7 risk
disclosure information in the narrative sections of the annual report, it is unlikely that they
would switch back to no disclosure.
In all 174 firm-years, reports for the period 2013-2015 were used. The annual reports were
downloaded from the companies’ websites. Each annual report was individually examined
and coded to obtain the disclosure of corporate risk information. To measure the extent of
corporate risk disclosure, the index developed by Tauringana and Chithambo (2016) (see
Appendix 1) was used. Each risk information disclosed is dichotomously scored as 1, if it
meets each criterion and 0 otherwise. The values assigned are then summed up to
represent the total score for each company. This is mathematically presented as follows:
The disclosure index ⫽ Total corporate risk items disclosed/Maximum
(58) items disclosed for each company
Actual disclosure
Disclosure Index ⫽
Total possible disclosure
m
兺 di
1
⫽ n
兺 di
1
where:

di ⫽ 1 if the item di is disclosed (0 if not disclosed);
m ⫽ number of items disclosed; and
n ⫽ maximum number of disclosure items possible.
Measurement of dependent and independent variables

The extent of corporate risk disclosure (ECRD) is the dependent variable in the current
study. The independent variables and their definitions and proxies used in this study
are presented in Table I. Based on prior empirical research, five corporate governance
mechanisms are included in the study model. These are board size, non-executive
directors, block ownership concentration, institutional ownership and audit committee
independence. There are also five control variables: firm size, profitability, liquidity,
leverage and auditor type.
The multivariate test used to test the hypotheses is the standard multiple regression
analysis and the regression model is:
ECRDI ⫽ a ⫹ ␤1 X1 ⫹ ␤2 X2 ⫹ ␤3 X3 ⫹ ␤4 X4 ⫹ ␤5 X5
⫹ ␤6 X6 ⫹ ␤7 X7 ⫹ ␤8 X8 ⫹ ␤9 X9 ⫹ ␤10 X10 ⫹ e
where:
ECRDI ⫽ Extent of corporate risk disclosures index;
a ⫽ constant (the intercept);
X1 ⫽ Board size;
X2 ⫽ Non-executive directors;
X3 ⫽ Block ownership concentration;
X4 ⫽ Institutional ownership;
X5 ⫽ Audit committee independence;
X6 ⫽ Firm size;
X7 ⫽ Profitability;
X8 ⫽ Liquidity;
X9 ⫽ Leverage;
X10 ⫽ Auditor type; and
e ⫽ error term.
Table I The definitions and proxies of independent variables

Variable Definition/proxy
Board size Total number of directors on the board

Board independence The proportion of non-executive directors to total number of
board members
Institutional ownership Percentage of institutional ownership.
Block ownership concentration Total shareholding of top 20 shareholders divided by the total
number of shares outstanding
Audit committee independence Dummy variable: “1” if board audit committee exists and “0”
otherwise
Firm size The firm’s total assets
Auditor size Dummy variable: 1 ⫽ Big four audit firms, 0 ⫽ other audit
firms
Leverage Ratio of non-current liabilities to shareholder’s equity
Profitability Return on assets/Return on capital employed
Liquidity The ratio of current assets to current liabilities

Findings of the study
Botswana
Analysis of the extent of International Financial Reporting Standard 7 risk disclosure
compliance. The results of the extent of IFRS 7 risk disclosure compliance are presented
in Table II. Table II shows that the mean score for the three-year period is 63 per cent,
the minimum is 52 per cent and the maximum is 78 per cent. The implication is that firms
listed on the BSE are not fully complying with the provisions of IFRS 7. This finding is
consistent with Tauringana and Chithambo (2016), who found that firms listed on the
Malawi stock exchange have a compliance level of 40 per cent.
Univariate analysis. The correlation analysis (Table III) shows that board size (BODS) has
a significant relationship with PNED at 1 per cent level (p ⫽ 0.034); INSTO at 1 per cent
(p ⫽ 0.001) and Leverage at 1 per cent level (p ⫽ 0.003). PNED also has a significant
relationship with Leverage at 1 per cent level (p ⫽ 0.003). INSTO has a significant
relationship with BOC at 5 per cent level (p ⫽ 0.000), AUDTCTEE at 5 per cent level (p ⫽
0.018) and ECRD at 5 per cent level (p ⫽ 0.037). BOC has a significant relationship with
AUDT at 5 per cent level (p ⫽ 0.013) and LEV at 1 per cent level (p ⫽ 0.000). The
implication is that there is a need to check for multi-collinearity and autocorrelation among
the variables.
Multi-collinearity and autocorrelation tests (assessment of the validity of the model). A
regression analysis was performed on the dependent and independent variables to check
for the existence of multi-collinearity and serial or autocorrelation problems. However, the
VIF values are less than 2.000 and Durbin–Watson has a value of 1.901, showing that there
is no econometric problem with the model.
Determinants of extent of International Financial Reporting Standard 7 risk disclosure
compliance. The panel data regression analysis results are summarized in Table IV.
According to the regression analysis, adjusted R-square is 17.8 per cent. That means
that 17.8 per cent of the variations in the ECRD could be explained by this model. With
regards to the direction of relationship between the dependent variable (ECRD) and the
independent variables, the regression results show a significant positive relationship
between disclosure of corporate risk information and INSTO (p ⫽ 0.022). The positive
co-efficient for INSTO suggests that H4 is supported and hence confirmed. This means
that under pressure-sensitive institutional investors, there is a likelihood that a firm will
comply with IFRS 7 risk disclosure requirements. This is consistent with previous
research results by Ajinka et al. (2005), Xie et al. (2003), Charitou et al. (2007) and
Wan-Hussin (2009) who found that institutional investors help increase corporate
transparency by disclosing corporate risk information.
Table II Descriptive statistics–Botswana

Variable N Minimum Maximum Mean SD
BODS 84 5.00 9.00 7.07 1.29

PNED 84 50.00 88.89 72.21 12.33
INSTO 84 28.80 96.36 67.62 17.67
BOC 84 50.56 100.00 75.63 14.25
FSIZE 84 6,411,710 843,203,275 174,405,915 239,003,545
AUDT 84 – 1.00 0.68 0.47
LEV 84 0.01 51.58 13.15 12.75
ROA 84 (53.00) 23.86 5.40 14.83
LIQDT 84 0.08 6.90 1.43 1.25
AUDTCTEE 84 – 1.00 0.93 0.26
ECRD 84 0.52 0.78 0.63 0.05

Table III Spearman’s rho correlation analysis results–Botswana
Variable BODS PNED INSTO BOC FSIZE AUDT LEV ROA LIQDT AUDTCTEE ECRD
BODS
Correlation coefficient 1.000 0.232* 0.346** 0.157 0.022 ⫺0.216* 0.316** 0.020 0.068 ⫺0.213 0.141
Significance (2-tailed) 0.0234 0.001 0.154 0.842 0.049 0.003 0.854 0.539 0.051 0.200
N 84 84 84 84 84 84 84 84 84 84 84
PNED
Correlation coefficient 0.232* 1.000 0.075 0.027 ⫺0.062 ⫺0.109 0.297** ⫺0.070 ⫺0.143 ⫺0.086 ⫺0.200
N 84 84 84 84 84 84 84 84 84 84 84
INSTO
Correlation coefficient 0.346** 0.075 1.000 0.490** 0.003 ⫺0.052 0.181 0.129 0.026 ⫺0.258* 0.228*
N 84 84 84 84 84 84 84 84 84 84 84
BOC
Correlation coefficient 0.157 0.027 0.490** 1.000 0.093 0.270* 0.415** 0.047 ⫺0.139 ⫺0.034 0.093
N 84 84 84 84 84 84 84 84 84 84 84
FSIZE
Correlation coefficient 0.022 ⫺0.062 0.003 0.093 1.000 0.118 0.016 0.614** ⫺0.062 ⫺0.017 0.130
N 84 84 84 84 84 84 84 84 84 84 84
AUDT
Correlation coefficient ⫺0.216* ⫺0.109 ⫺0.052 0.270* 0.118 1.000 0.014 0.208 ⫺0.275* 0.106 ⫺0.065
N 84 84 84 84 84 84 84 84 84 84 84
LEV
Correlation coefficient 0.316** 0.297** 0.181 0.415** 0.016 0.014 1.000 0.175 0.120 0.309** 0.063
N 84 84 84 84 84 84 84 84 84 84 84
ROA
Correlation coefficient 0.020 ⫺0.070 0.129 0.047 0.614** 0.208 0.175 1.000 0.092 0.103 0.080
N 84 84 84 84 84 84 84 84 84 84 84
LIQDT
Correlation coefficient 0.068 ⫺0.143 0.026 ⫺0.139 ⫺0.062 ⫺0.275* 0.120 0.092 1.000 0.120 0.065
N 84 84 84 84 84 84 84 84 84 84 84
AUDTCTEE
Correlation coefficient ⫺0.213 ⫺0.086 ⫺0.258* ⫺0.034 ⫺0.017 0.106 0.309** 0.103 0.120 1.000 0.137
N 84 84 84 84 84 84 84 84 84 84 84
ECRD
Correlation coefficient 0.141 ⫺0.200 0.228* 0.093 0.130 ⫺0.065 0.063 0.080 0.065 0.137 1.000
N 84 84 84 84 84 84 84 84 84 84 84
Notes: *Correlation is significant at the 0.05 level (2-tailed); **correlation is significant at the 0.01 level (2-tailed)
Ghana
Analysis of the extent of International Financial Reporting Standard 7 risk disclosure
compliance. The results of the extent of IFRS 7 risk disclosure compliance are presented
in Table V. Table V shows that the mean score for the three-year period is 53 per cent, the
minimum is 42 per cent and the maximum is 68 per cent. The implication is that firms listed
on the GSE are not fully complying with the provisions of IFRS 7. This finding is consistent

Table IV Regression results for extent of IFRS 7 risk disclosure compliance
(Botswana)
Variable Beta Significance (p) VIF
(Constant) 0.000
Total assets 0.061 0.579 1.207
CUR 0.051 0.640 1.004
TD/TA 0.061 0.571 1.002
ROA 0.057 0.624 1.148
AUDITOR ⫺0.046 0.571 1.002
AUDTCTEE 0.162 0.138 1.038
BOC 0.097 0.423 1.268
BODS 0.070 0.542 1.135
INSTO 0.250 0.022 1.000
PNED ⫺0.207 0.152 1.000
Notes: 95% confidence interval; F ⫽ 0.5.446; R-square ⫽ 0.209; adjusted R-square ⫽ 0.178; N ⫽
84; Durbin Watson ⫽ 1.901
Table V Descriptive statistics – Ghana

Variable Minimum Maximum Mean SD
Total assets 4,449 9,381,800 1,355,846 2,029,227

CUR 0.20 16.93 2.52 3.75
TD/TA 0.06 2.77 0.90 0.56
ROA (8.00) 33.00 6.34 8.55
AUDITOR 0.00 1.00 0.81 0.39
AUDTCTEE 0.00 1.00 0.97 0.18
BOC 54.95 97.05 84.07 11.06
BODS 4.00 18.00 8.77 2.94
INSTO 1.00 96.55 74.53 22.41
PNED 50.00 93.33 71.12 12.57
QOD 0.26 0.39 0.33 0.04
ECRD 0.42 0.68 0.53 0.04
N ⫽ 90
with Tauringana and Chithambo (2016), who found that firms listed on the Malawi stock
exchange have a compliance level of 40 per cent.
Univariate analysis. The correlation analysis (Table VI) shows that total assets has a
significant relationship with Leverage at 1 per cent level (p ⫽ 0.002), ROA at 5 per cent
level (p ⫽ 0.028) and BODS at 1 per cent level (p ⫽ 0.000). ROA has a significant
relationship with CUR at 1 per cent level (p ⫽ 0.000). AUDT has a significant relationship
with CUR at 5 per cent level (p ⫽ 0.031). BODS has a significant relationship with CUR at
5 per cent level (p ⫽ 0.045), AUDT at 1 per cent level (p ⫽ 0.004) and INSTO at 1 per cent
level (p ⫽ 0.001). INSTO has a significant relationship with BOC at 1 per cent level and
BODS at 1 per cent level. The implication is that there is a need to check for
multi-collinearity and autocorrelation among the variables.
Multi-collinearity and autocorrelation tests (assessment of the validity of the model). A
regression analysis was performed on the dependent and independent variables to check
for the existence of multi-collinearity and serial or autocorrelation problems. However, the
VIF values are less than 2.000 and the Durbin–Watson value is 1.904, showing that there is
no econometric problem with the model.
Determinants of extent of International Financial Reporting Standard 7 risk disclosure
compliance. The panel data regression analysis results are summarized in Table VII.
According to the regression analysis, adjusted R-Square is 31.4 per cent. That means that

Table VI Spearman’s rho correlations
Spearman’s rho correlations
Variable Total assets CUR TD/TA ROA AUDITOR AUDTCTEE BOC BODS INSTO PNED QCRD ECRD
Total assets
Correlation coefficient 1.000 0.039 0.320** ⫺0.231* 0.048 ⫺0.068 0.011 0.515** 0.024 0.122 0.011 0.106
Significance (2-tailed) 0.712 0.002 0.028 0.656 0.525 0.915 0.000 0.824 0.253 0.919 0.321
CUR
Correlation coefficient 0.039 1.000 ⫺0.140 0.445** 0.228* ⫺0.068 ⫺0.047 ⫺0.212* ⫺0.082 0.258* 0.119 ⫺0.045
TD/TA
Correlation coefficient 0.320** ⫺0.140 1.000 ⫺0.263* ⫺0.061 ⫺0.193 ⫺0.153 ⫺0.092 ⫺0.149 0.133 0.135 0.101
ROA
Correlation coefficient ⫺0.231* 0.445** ⫺0.263* 1.000 0.119 0.037 ⫺0.041 ⫺0.126 0.055 0.060 0.110 ⫺0.071
AUDITOR
Correlation coefficient 0.048 0.228* ⫺0.061 0.119 1.000 0.069 ⫺0.311** 0.302** ⫺0.029 0.151 0.025 ⫺0.124
AUDTCTEE
Correlation coefficient ⫺0.068 ⫺0.068 ⫺0.193 0.037 0.069 1.000 0.049 0.141 0.037 0.011 ⫺0.085 0.006
BOC
Correlation coefficient 0.011 ⫺0.047 ⫺0.153 ⫺0.041 ⫺0.311** 0.049 1.000 0.020 0.783** ⫺0.109 0.127 0.004
BODS
Correlation coefficient 0.515** ⫺0.212* ⫺0.092 ⫺0.126 0.302** 0.141 0.020 1.000 0.347** ⫺0.007 ⫺0.103 ⫺0.005
INSTO
Correlation coefficient 0.024 ⫺0.082 ⫺0.149 0.055 ⫺0.029 0.037 0.783** 0.347** 1.000 ⫺0.153 0.020 0.024
PNED
Correlation coefficient 0.122 0.258* 0.133 0.060 0.151 0.011 ⫺0.109 ⫺0.007 ⫺0.153 1.000 0.115 ⫺0.061
QCRD
Correlation coefficient 0.011 0.119 0.135 0.110 0.025 ⫺0.085 0.127 ⫺0.103 0.020 0.115 1.000 0.049
ECRD
Correlation coefficient 0.106 ⫺0.045 0.101 ⫺0.071 ⫺0.124 0.006 ⫺0.004 ⫺0.005 0.024 ⫺0.061 0.049 1.000
Notes: **Correlation is significant at the 0.01 level (2-tailed); *correlation is significant at the 0.05 level (2-tailed)
31.4 per cent of the variations in the ECRD could be explained by this model. With regards
to the direction of relationship between the dependent variable (ECRD) and the
independent variables, the regression results show a positive relationship between
disclosure of corporate risk and PNED (proportion of non-executive directors) (␤ ⫽ 0.150)
and statistically significant at 0.01 level (p ⫽ 0.002). The positive co-efficient for PNED
suggests that H2a, which states that there is a positive relationship between proportion of
non-executive directors on the board and the extent of risk disclosure compliance, is
confirmed. This means that with a higher proportion of independent directors, there is more
likelihood that a firm will comply with IFRS 7 risk disclosure requirements. This is consistent
with previous research results by Tauringana and Chithambo (2016), Collins et al. (2014),
Deumes and Knechel (2008) and Abraham and Cox (2007) (Table VIII).
Summary and conclusion

This paper investigates the relationship between corruption, corporate governance, extent
and determinants of risk disclosure compliance with the requirements of IFRS 7 by firms

Table VII Regression results for extent of IFRS 7 risk disclosure compliance–Ghana
Variable Beta Significance (p) VIF
(Constant) 0.000
Total assets 0.014 0.891 1.207
CUR ⫺0.094 0.733 1.282
TD/TA 0.111 0.939 1.075
ROA 0.101 0.892 1.420
AUDITOR 0.069 0.500 1.225
AUDTCTEE ⫺0.064 0.866 1.909
BOC 0.254 0.993 1.890
BODS 0.011 0.940 1.834
INSTO ⫺0.079 0.927 1.099
PNED 0.150 0.002 1.273
Notes: 95% confidence interval; F ⫽ 0.666; R-square ⫽ 0.420; adjusted R-square ⫽ 0.314; Durbin
N ⫽ 90; Watson ⫽ 1.904
Table VIII Results per hypothesis testing

Hypotheses Botswana Ghana
H1. There is a significant relationship between board size and extent of

risks disclosure compliance Rejected Rejected
H2. There is a significant relationship between proportion of non-executive
directors on the board and extent of risks disclosure compliance Rejected Accepted
H3. There is a significant relationship between block ownership
concentration and extent of risks disclosure compliance Rejected Rejected
H4. There is a significant relationship between institutional ownership and
extent of risks disclosure compliance Accepted Rejected
H5. There is a significant relationship between audit committee
independence and extent of risks disclosure compliance Rejected Rejected
listed on the GSE and BSE. This study, therefore, tries to test whether the transparency level
of a country has any impact on the transparency level of its firms with regards to complying
with IFRS 7 risk disclosure requirements.
The panel data analysis was then used to determine if corporate governance mechanisms
(board size, proportion of non-executive directors, block ownership concentration,
institutional investors and audit committee independence) influence the extent of risk
disclosure compliance. The results suggest that the extent of risk disclosure compliance
over the three-year period is, on average, 63 and 53 per cent for Botswana and Ghana,
respectively. These results indicate that most of the firms listed on the BSE disclosed more
corporate risk information than those listed on the GSE. Thus, compliance with IFRS 7
requirements in Botswana is generally positive, whilst the situation in Ghana is not
encouraging. The implication is that corporate governance in Ghana is not taken seriously
by the listed firms. These findings confirm the World Bank’s study which found the
disclosure of non-financial information in financial reports of listed firms as weak.
The low level of disclosure by listed firms in Ghana does not support the signaling theory
which suggests that firms with good performance will wish to signal their quality to
investors, and hence, would be more likely to disclose their performance by disclosing
more risk information. The low disclosure compliance level means that accounting
regulators, the GSE and Securities and Exchange Committee (SEC) need to do more to
enforce compliance of IFRS 7. In their studies, Shleifer (2005) and Djankov et al. (2003)
underscored the importance of enforcement mechanisms as being fundamental to the
success of any accounting regulation.

The principles of corporate governance in Ghana are similar to those of Botswana. The
codes of corporate governance in both countries reflect the stakeholder-centric framework
which champions the use of transparent disclosures across multiple dimensions. Hence, it
is expected that, all things being equal, the risk disclosure levels in the two countries should
be of the highest standard. The differences in the disclosure levels in the two countries can,
therefore, be attributed to the different levels of corruption in the two countries. It is
important to note that one way of hiding corrupt practices is for companies to disclose
scanty information. According to Okike (2007), the issue of corruption in Africa is purely
cultural. Cultural shift, good ethical values and moral standard with sound corporate
governance practices are the only panacea that can reduce corruption in Africa.
The research is important as it sheds light on the level of risk disclosure and transparency
among firms listed on the BSE and GSE. The high transparency level (low corruption
perception index) of Botswana, as shown by Transparency International’s transparency
index, is reflected in the corporate risk disclosure level of the listed companies. The low
transparency level (high corruption index) of Ghana, as shown by Transparency
International’s transparency index, is reflected in the low corporate risk disclosure level of
the listed companies. Thus, confirming the belief that corruption enables inadequate
disclosure and compliance with IFRS 7 requirements.
The study also investigated the main determinants or drivers of the extent of IFRS risk
disclosure compliance. Results of the statistical analysis revealed that the extent of
disclosure in Ghana was influenced by the presence of non-executive directors. This study
contributes to the literature on the relationship between corporate governance and
disclosure by showing that disclosure of risk disclosure compliance information in Ghana
is associated with the proportion of independent board members. This finding supports
SOX 404 requirements, even though this is not compulsory for Ghanaian firms unlike their
US counterparts.
This paper uses agency theory to study the relationship between corruption, corporate
governance attributes and compliance with IFRS 7 requirements. In the case of Botswana,
it is only institutional ownership which is related to the disclosure of corporate risk
information. Agency theory argues that institutional directors may act independently from
managers and may, therefore, act as good monitors to protect shareholders’ interest, thus
mitigating the agency problems between shareholders and managers (Colpan and
Yoshikawa, 2012). The results of the study confirm that the agency theory holds.
There are several practical implications of the current study for academicians and
practitioners. The study contributes to the accounting literature in general, and specifically
to the literature on risk disclosure. Listed firms can use the findings to improve the extent
and quality of their IFRS 7 risk disclosure compliance. The accountancy institutes in
Botswana and Ghana, the Botswana and Ghana stock exchanges, and SEC may use the
findings of the current study to provide guidance on best practices and training programs
for the listed firms to help improve the compliance of IFRS 7 requirements. The regulators
should also be interested in the influence of corporate governance mechanisms on risk
disclosure. The study also provides information for managers to keep investors satisfied
about the risk that their companies face. Such information may assist investors to diversify
their investment portfolios. In summary, the study has provided evidence that contributes
to the auditing and financial reporting literature. Auditors auditing financial reports from
these countries should insist on 100 per cent compliance with the IFRS 7. Further research
should be conducted to test the quality of financial reports on the basis that firms in these
countries do not fully comply with a mandatory financial reporting standard.
One of the limitations of the current study is that its sample size is only 28 companies in
Botswana and 30 in Ghana. The limited number of companies makes it difficult to draw
broad conclusions, so the researcher cannot generalize the results. Further exploratory

research could be undertaken to cover both listed and non-listed firms in the two countries.
Further longitudinal studies might also be conducted to investigate disclosure patterns of
companies across years. The results may differ across different years if multiple years are
considered. This study used only the annual reports of the firms as the information
disclosure source; other sources such as websites, press releases and prospectuses were
not used. Future research can be conducted using these other sources to improve the
findings. This research study adds to the prior literature by exploring the effect of firm
characteristics on the disclosure of IFRS risk disclosure information in emerging markets.
One natural extension of this research would be to conduct a comparative study between
several countries with different corruption perception levels.
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Appendix
Table AI Extent of IFRS 7 risk disclosure compliance index

Market risk–Interest rate risk
Item Disclosure requirement Source Maximum score
1 Exposure to risk and how they arise IFRS 7.33a 1

2 Objectives, policies and processes for managing the risk and the methods IFRS 7.33b 1
used to measure the risk
3 Changes in exposure to risk, measurement of risk and objectives, policies IFRS 7.33c 2
and processes to manage the risk from the previous period:
Disclosure of changes
Explanation for changes
4 Summary quantitative data about exposure to risk at the reporting date IFRS 7.34 1
5 Interest rate sensitivity analysis showing how profit or loss and equity IFRS 7.40a 1
would have been affected by changes in the relevant risk variable that
were reasonably possible at that date
6 Methods and assumptions used in preparing the sensitivity analysis IFRS 7.40b 4
7 Concentration of interest rate risk if not apparent from summary IFRS 7.34c 1
quantitative data and sensitivity analysis
Total score for interest rate risk 11
Market risk–Currency risk
11 Summary quantitative data about exposure to risk at the reporting date IFRS 7.34a 1
12 Currency risk sensitivity analysis showing how profit or loss and equity IFRS 7.40a 1
14 Concentration of currency risk if not apparent from summary quantitative IFRS 7.34c 1
data and sensitivity analysis
Total score for currency risk 11
Market risk–other price risk
19 Other price risk sensitivity analysis showing how profit or loss and equity IFRS 7.40a 1
21 Concentration of other price risk if not apparent from summary quantitative IFRS 7.34c 1
Total score for other price risk 11
Liquidity risk
(continued)

Table AI
Market risk–Interest rate risk
Item Disclosure requirement Source Maximum score
25 Maturity analysis for financial liabilities that show the remaining contractual IFRS 7.39a 1
maturities
Total score for liquidity risk 6
Credit risk
30 Concentrations of credit risk if not apparent from summary quantitative IFRS 7.34c 1
31 Amount of maximum exposure to credit risk (before deducting value IFRS 7.36a 1
collateral)
32 Description of collateral held as security and other credit enhancements IFRS 7.36b 1
security and other credit enhancements

33 Information about credit quality of financial assets with credit risk that are IFRS 7.36c 2
neither past due nor impaired:
Information about credit quality
Explanation rating system
34 The carrying amount of financial assets that would otherwise be past due IFRS 7.36a 1
or impaired whose terms have been renegotiated
35 By class of financial assets an analysis of the age of financial assets that IFRS 7.37a 1
are past due as at the reporting date but not impaired
36 By class of financial assets and analysis of financial assets that are IFRS 7.37a 3
individually determined to be impaired at the reporting date, including the
factors the entity considered in determining that they are impaired:
Disclosure of factors the entity considered in the impairment
Carrying amount of impaired financial assets
Amount of impairment loss
37 Description of collateral held by the entity as security and other credit IFRS 7.37c 1
enhancements for the amounts as disclosed in IFRS 73.37a and b and,
unless impracticable, an estimate of their fair value
38 Nature and carrying amount of assets obtained by taking possession of IFRS 7.38a 1
collateral it holds as security or called on other credit enhancements, and
such assets meet the recognition criteria on other standards
39 Policies for disposing assets or use it in its operations when the assets are 1
not readily convertible into cash
Total score for credit risk 19
Total score for all risk disclosures 58
Source: Adapted from Tauringana and Chithambo (2016)
Corresponding author
Ben Kwame Agyei-Mensah can be contacted at: bamensah@solbridge.ac.kr
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Abstract Ben Kwame Agyei-

Literature review and hypotheses development

PAGE 728 CORPORATE GOVERNANCE VOL. 17 NO. 4 2017

Regulation of accounting in Ghana

Overview of International Financial Reporting Standard 7

VOL. 17 NO. 4 2017 CORPORATE GOVERNANCE PAGE 729

1. information about the significance of financial instruments; and

Studies on International Financial Reporting Standard 7 compliance

PAGE 730 CORPORATE GOVERNANCE VOL. 17 NO. 4 2017

financial performance. It is thus often necessary for companies to justify legitimate

Corporate governance and risk disclosure

VOL. 17 NO. 4 2017 CORPORATE GOVERNANCE PAGE 731

significant positive relationship between the proportion of independent directors on the

PAGE 732 CORPORATE GOVERNANCE VOL. 17 NO. 4 2017

VOL. 17 NO. 4 2017 CORPORATE GOVERNANCE PAGE 733

Measurement of dependent and independent variables

Table I The definitions and proxies of independent variables

Board size Total number of directors on the board

PAGE 734 CORPORATE GOVERNANCE VOL. 17 NO. 4 2017

Table II Descriptive statistics–Botswana

BODS 84 5.00 9.00 7.07 1.29

VOL. 17 NO. 4 2017 CORPORATE GOVERNANCE PAGE 735

PAGE 736 CORPORATE GOVERNANCE VOL. 17 NO. 4 2017

Table V Descriptive statistics – Ghana

Total assets 4,449 9,381,800 1,355,846 2,029,227

VOL. 17 NO. 4 2017 CORPORATE GOVERNANCE PAGE 737

Summary and conclusion

PAGE 738 CORPORATE GOVERNANCE VOL. 17 NO. 4 2017

Table VIII Results per hypothesis testing

Hypotheses Botswana Ghana

H1. There is a significant relationship between board size and extent of

VOL. 17 NO. 4 2017 CORPORATE GOVERNANCE PAGE 739

PAGE 740 CORPORATE GOVERNANCE VOL. 17 NO. 4 2017

Carson, E. and Simnet, R. (1997), “Voluntary disclosure of corporate governance information”,

VOL. 17 NO. 4 2017 CORPORATE GOVERNANCE PAGE 741

PAGE 742 CORPORATE GOVERNANCE VOL. 17 NO. 4 2017

Schadewitz, H. and Blevins, D. (1998), “Major determinants of interim disclosures in an emerging

Shleifer, A. (2005), “Understanding regulation”, European Financial Management, Vol. 11 No. 4,

VOL. 17 NO. 4 2017 CORPORATE GOVERNANCE PAGE 743

Tauringana, V. and Chithambo, L. (2016), “Determinants of risk disclosure compliance in Malawi: a

Management and Governance, Vol. 8 No. 3, pp. 305-332.

IASB (2007), IFRS 7 Financial Instruments: Disclosures, IASB, London.

PAGE 744 CORPORATE GOVERNANCE VOL. 17 NO. 4 2017

VOL. 17 NO. 4 2017 CORPORATE GOVERNANCE PAGE 745

Table AI Extent of IFRS 7 risk disclosure compliance index

1 Exposure to risk and how they arise IFRS 7.33a 1

PAGE 746 CORPORATE GOVERNANCE VOL. 17 NO. 4 2017

security and other credit enhancements

VOL. 17 NO. 4 2017 CORPORATE GOVERNANCE PAGE 747

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