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The effect of CEOs’ characteristics on forward-looking information

Rateb Alqatamin (Department of Accounting and Finance, Business School, University of Central Lancashire, Preston, UK)
Zakaria Ali Aribi (Department of Accounting and Finance, Business School, University of Central Lancashire, Preston, UK)
Thankom Arun (Department of Accounting, University of Essex, Colchester, UK)

Journal of Applied Accounting Research

ISSN: 0967-5426

Article publication date: 13 November 2017

925

Abstract

Purpose

The purpose of this paper is to investigate the effect of CEOs’ characteristics on the level of forward-looking information (FLI) disclosure. In particular, the study examines the effect of CEO age, gender and overconfidence on the disclosure of FLI in Jordan firms.

Design/methodology/approach

The study uses a disclosure index to measure the level of FLI disclosure and employs random-effect and panel data regressions to examine the relationship between CEOs’ characteristics and the level of FLI disclosure. The sample consists of 201 non-financial companies listed on the Amman Stock Exchange for the period 2008-2013.

Findings

The results of the study show that the CEO age has a significant negative relationship with the level of FLI disclosure in annual reports of non-financial Jordanian companies, whereas gender and overconfidence have a significant positive association with FLI disclosure.

Research limitations/implications

The single country context limits the generalisability of the findings.

Practical implications

The results of the study could be beneficial for the users of financial information, such as regulators, investors, auditors and lenders. These users might consider the findings of the study when they are using a company’s financial information. Accordingly, they may seek to extend the investigations and verify such reporting practices and consequently make better decisions. In addition, the findings provide empirical evidence that helps managers in assessing their financial transparency and accountability.

Originality/value

The relationship between CEO’s characteristics and the level of FLI disclosure is still ambiguous. This study contributes to the FLI disclosure literature by identifying the role of CEO characteristics on the level of FLI disclosure. Thus, it offers evidence that the level of FLI disclosure is driven by specific CEO characteristics.

Keywords

Citation

Alqatamin, R., Aribi, Z.A. and Arun, T. (2017), "The effect of CEOs’ characteristics on forward-looking information", Journal of Applied Accounting Research, Vol. 18 No. 4, pp. 402-424. https://doi.org/10.1108/JAAR-03-2016-0027

Publisher

:

Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

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