Australian evidence on corporate governance attributes and their association with forward-looking information in the annual report

We investigate the role played by a firm’s corporate governance framework in the decision to voluntarily disclose forward-looking information in the published financial reports of Australian companies in 2000 and 2002. With respect to the year 2000, the corporate governance category, audit quality, consisting of the presence and independence of the audit committee, its meeting frequency, the use of a big 6 auditor and the auditor’s independence, is positively associated with the disclosure of forward-looking information. The corporate governance category, board committees, consisting of the appointment and independence of a compensation committee and the creation of a nomination committee, and the overall efficacy of the corporate governance system are also positively associated with the disclosure of forward-looking information. However, corporate disclosure does not seem to be driven by the same factors in 2002 since in that year none of the governance categories is significantly associated with the firm’s decision to publish forward-looking information in financial reports.

Jenny Stewart (Corresponding author)Email:

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Madonna O’Sullivan   PhD lectures in Accounting at Queensland University of Technology, Queensland, Australia. Her research interests are in the area of corporate governance and auditing. Madonna recently completed her doctoral studies on “An Investigation of the Role Played by Corporate Governance in the Voluntary Disclosure of Forward-Looking Information and the Quality of Corporate Financial Reports”. Majella Percy   PhD is a senior lecturer in Accounting at Queensland University of Technology. Her research fits under the broad umbrella of corporate governance, focusing on topical international accounting issues including valuation of intangible assets especially Research & Development; the transparency/quality of both earnings and disclosures in corporate annual reports; and environmental reporting. Jenny Stewart   PhD is a Professor of Accounting in the Griffith Business School, Griffith University, Queensland, Australia. She has held previous positions in universities in Australia, New Zealand and Singapore. Jenny’s main research interests are in the areas of corporate governance and auditing, with a particular interest in the relationships between internal audit, external audit and audit committees.