Financial reporting quality of financial institutions: Literature review

Sahi, Ahmed Mahdi; Sahi, Alaa Mahdi; Abbas, Alhamzah F.; Khatib, Saleh F. A.

Article

Financial reporting quality of financial institutions:

Literature review

Cogent Business & Management

Provided in Cooperation with:

Taylor & Francis Group

Suggested Citation: Sahi, Ahmed Mahdi; Sahi, Alaa Mahdi; Abbas, Alhamzah F.; Khatib, Saleh F. A.

(2022) : Financial reporting quality of financial institutions: Literature review, Cogent Business &

Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 9, Iss. 1, pp. 1-17,

https://doi.org/10.1080/23311975.2022.2135210

This Version is available at:

https://hdl.handle.net/10419/289294

Standard-Nutzungsbedingungen:

Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen

Zwecken und zum Privatgebrauch gespeichert und kopiert werden.

Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle

Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich

machen, vertreiben oder anderweitig nutzen.

Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen

(insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten,

gelten abweichend von diesen Nutzungsbedingungen die in der dort

genannten Lizenz gewährten Nutzungsrechte.

Documents in EconStor may be saved and copied for your personal

and scholarly purposes.

You are not to copy documents for public or commercial purposes, to

exhibit the documents publicly, to make them publicly available on the

internet, or to distribute or otherwise use the documents in public.

If the documents have been made available under an Open Content

Licence (especially Creative Commons Licences), you may exercise

further usage rights as specified in the indicated licence.

https://creativecommons.org/licenses/by/4.0/

Full Terms & Conditions of access and use can be found at

https://www.tandfonline.com/action/journalInformation?journalCode=oabm20

Cogent Business & Management

ISSN: (Print) (Online) Journal homepage: www.tandfonline.com/journals/oabm20

Financial reporting quality of financial institutions:

Literature review

Ahmed Mahdi Sahi, Alaa Mahdi Sahi, Alhamzah F. Abbas & Saleh F. A. Khatib

To cite this article: Ahmed Mahdi Sahi, Alaa Mahdi Sahi, Alhamzah F. Abbas & Saleh F. A.

Khatib (2022) Financial reporting quality of financial institutions: Literature review, Cogent

Business & Management, 9:1, 2135210, DOI: 10.1080/23311975.2022.2135210

To link to this article: https://doi.org/10.1080/23311975.2022.2135210

article is distributed under a Creative

Commons Attribution (CC-BY) 4.0 license.

Published online: 22 Oct 2022.

Submit your article to this journal

Article views: 12304

View related articles

View Crossmark data

Citing articles: 2 View citing articles

ACCOUNTING, CORPORATE GOVERNANCE & BUSINESS ETHICS |

REVIEW ARTICLE

Financial reporting quality of financial

institutions: Literature review

Ahmed Mahdi Sahi

*, Alaa Mahdi Sahi

*, Alhamzah F. Abbas

and Saleh F. A. Khatib

Abstract: The objective of this study is to examine and synthesize the existing

literature on financial disclosure by financial institutions. It presents a systematic

literature review of 204 studies on this topic published from 1990 to 2022. The

studies were retrieved from Scopus database. In addition, this review highlights the

gaps in current literature including contradictory results, explores the potential data

sources for empirical researchers, and offers guidance for investigating prospective

areas for future studies. The study found monitoring attributes to be the key

determinants of financial reporting quality. Yet, the existing literature concentrated

on internal/external auditing and audit committee characteristics whilst giving

limited attention to the functions of other monitoring mechanisms, i.e., board of

directors. Furthermore, there is no clear evidence that efficient financial disclosure

could boost the performance and evaluation of firms as well as whether these

consequences are influenced by differences in the institutional and protection

environment between markets. The contribution of this study resides in the appli-

cation of systematic literature review to a burgeoning study topic, enabling an

examination of the state-of-the-art financial reporting in financial institutions, an

area that has received little attention in the literature. Based on the content

investigation of the literature, future paths and implications are also presented.

Subjects: Business, Management and Accounting; Accounting; Corporate Governance

Keywords: accounting disclosure; financial institutions; online financial reporting; banks

Ahmed Mahdi Sahi

ABOUT THE AUTHORS

Ahmed Mahdi Sahi is a lecturer at College of Administration and Economics, Thi-Qar University,

Nasiriyah, Iraq. He received his M.A in Financial Accounting from Osmania University, Hyderabad,

India. His area of interest includes Financial Accounting , Cost accounting, and the Managerial

Accounting.

Alaa Mahdi Sahi is a lecturer at College of Administration and Economics, Wasit University, Kut , Wasit ,

Iraq. Currently he is a Ph.D. student at Azman Hashim International Business School/University

Technology of Malaysia (UTM). He received his M.A in Economics from Osmania University, Hyderabad,

India. His area of interest includes digital payment, Information systems, and the digital economy.

Alhamzah F. Abbas is a Ph.D. scholar of Azman Hashim International Business School (AHIBS) at the

University Technology of Malaysia (UTM), Malaysia. His main research interests are digital marketing,

information technology, consumer behavior, digital payment, and bibliometric and SLR analysis. He has

published several research papers in the field of digital marketing and consumer behavior.

Saleh F. A. Khatib is a Ph.D scholar at Universiti Teknologi Malaysia. He has published several scholarly

articles in various peer-reviewed journals and participated in many international conferences. His

research interests are related to Corporate Governance, Auditing, Firm performance, Financial policy,

Capital structure, Cash holdings, Dividends, Disclosure quality, and Corporate social responsibility. Khatib

earned his M.S. in finance from Limkokwing university in Malaysia in 2018.

Mahdi Sahi et al., Cogent Business & Management (2022), 9: 2135210

https://doi.org/10.1080/23311975.2022.2135210

Page 1 of 17

Received: 27 August 2022

Accepted: 07 October 2022

*Corresponding author: Ahmed Mahdi

Sahi, College of Administration and

Economics, Thi-Qar University,

Nasiriyah, 64001, Iraq

E-mail: [email protected]

Reviewing editor:

Collins G. Ntim, Accounting,

University of Southampton, United

Kingdom

Additional information is available at

the end of the article

Attribution (CC-BY) 4.0 license.

1. Introduction

Financial disclosure is a statement issued by a firm, business, or corporation that defines the

financial strategies being employed and provides information such as expenses and earnings for

a specific period (Alslihat et al., 2017). Corporations are now compelled to fully disclose all financial

and non-financial information. Investors are the main beneficiaries of accounting disclosure

(Stocken, 2012). Other stakeholders, including employees, the government, distributors, custo-

mers, suppliers, and society, also gain from the information transparency (Zamil et al., 2021).

However, there is growing disagreement over the optimal method of delivering financial informa-

tion to users (Khatib, Abdullah, et al., 2022, Al Amosh et al., 2022a; Linciano et al., 2018). The

financial report had grown to suit numerous users and objectives, making it challenging for

businesses that intend to customize it to the perceived demands of institutional and other more

specialized users (Holland, 1999). After the 2008 global financial crisis, financial institutions—

particularly those required to report to numerous countries—were confronted with a higher

volume, more specificity, and a greater frequency of regulatory reporting. Given the short imple-

mentation timelines and the unpredictability of rulemaking, these institutions are compelled to

enhance their data quality and integration across business divisions and product lines.

Consequently, the poor quality of public information, particularly in financial reports, severely

impedes their fund management and corporate governance responsibilities (Holland, 1999).

Furthermore, the number of accounting disclosure researchers and publications has expanded

dramatically during the last two decades. A search of the literature revealed the variety of

accounting disclosure themes that have been studied. As a result, the field of accounting dis-

closure determinants has developed and is currently undergoing rigorous investigation. Numerous

studies in this field indicate the breadth of the domains associated with accounting disclosure,

highlighting the need to examine current data and suggest areas for future research. Only a few

works had thoroughly evaluated earlier studies, and most of these works focused on specific

aspects of accounting disclosure (Arora, 2021; Waris & Rizwan, 2013). For instance, Gosselin

et al. (2021) conducted a review that focused solely on the readability of accounting disclosures,

and Arora (2021) conducted a review of human resources accounting disclosure practices. Other

review studies covered a specific number of years, settings, or factors (Amernic, 1988; Rodrigues

et al., 2021; Tsalavoutas et al., 2020). Therefore, a thorough and systematic examination of the

determinants of accounting disclosure is clearly required in order to provide a revision to the

current status of previous studies and also to uncover the potential future study agenda. In

contrast to prior reviews, this study did not confine its scope to specific time frames, nations, or

factors.

In this context, a systematic review article on financial reporting appears useful for addressing

the continuing issues associated with the efficacy of and compliance with financial reporting

standards and laws, as these issues have remained a key concern despite continuous policy

initiatives. Literature reviews are valuable for organizing the numerous facets of research concerns

not only because they expose the diverse nature of the information but also because they provide

the conceptual frameworks for creating an understanding of the topic. In conducting this inquiry,

the researchers created a search string that included the terms “accounting disclosure” and

“accounting reporting” in order to find papers in the Scopus database that were relevant to this

review. This search was not restricted to any particular time period or journal. The original sample

of 918 research publications were subjected to a screening procedure. The list was then narrowed

down to a final sample of 204 publications. This study not only examined accounting disclosures

but also assessed the theoretical lenses used in the literature, the annual trend, and the geogra-

phical dispersion.

RQ1. What has been the yearly trend of previous studies?

Mahdi Sahi et al., Cogent Business & Management (2022), 9: 2135210

https://doi.org/10.1080/23311975.2022.2135210

Page 2 of 17

RQ2: How are the settings of prior studies distributed?

RQ3: What are the themes discussed in the sample literature?

The rest of the manuscript is structured as follows. The literature review section comes after the

introduction and is followed by the research methodology section to present the sample collection

and analysis approaches. The results provide a discussion of the research findings. The directions

for future research are discussed in the recommendation section. The last section concludes the

study and highlights the implications and constraints of the study.

2. Literature review

Corporate financial reporting refers to any deliberate release of financial information whether via

informal or formal channels, voluntary or required, or in a qualitative or numerical form. Firms

provide financial information to external users via various channels including websites, press

releases, interim reports, conferences, and annual reports. Financial disclosure is crucial for both

businesses and stakeholders because it is the main channel for management to communicate with

outside investors and market participants. The body of research on financial disclosure is vast and

covers a wide range of topics, including the factors influencing voluntary disclosure, how regula-

tory changes affect the amount of disclosure, and the effects of disclosure on the economy

(Hassan & Marston, 2019).

In recent years, scholars have become more interested in understanding the determinants of

accounting disclosure owing to a variety of factors, including a significant shift toward increased

globalization, the relaxation of financial laws, the development of technology, and the economic

and financial crises that have forced businesses to meet the high demand for information from

external users by disclosing information clearly and intelligibly in order to keep up with rapid

expansions and strong competition (Setiyawati & Doktoralina, 2019). Several characteristics, such

as the capacity for change, management changes, political and bureaucratic support, professional

and academic support, and communication have reportedly been documented in the literature to

significantly influence how corporations disclose information (Mnif & Znazen, 2020). However, the

past literature’s conclusions on most of these characteristics remain equivocal. The discrepancy

between past research findings and current research necessitates a thorough evaluation of the

components of the accounting disclosure literature. The authors of this study looked at the

theoretical frameworks and financial reporting components that had been covered in earlier

research, particularly those on financial institutions, in addition to the financial disclosure drivers.

Financial reporting plays two crucial roles in market-based economies. First, it reduces informa-

tion asymmetry and enables capital providers to value businesses, thereby fostering the transpar-

ency that is necessary for an efficient capital market operation. This is known as the valuation role

of accounting information. Second, financial reports enable external capital suppliers to assess

management performance, and this is known as the stewardship role of accounting information

(Pinnuck, 2012). Outsiders use accounting information for these two reasons. Whether the finan-

cial statements that are best for valuing businesses are also the greatest for assisting shareholders

and boards in hiring CEOs to reduce the agency conflict is a crucial question.

Firms are increasingly devoted to social responsibilities, and they include the implications of

their actions on these issues in their operational management and worldwide strategies

(Rodrigues et al., 2021). In this setting, the financial report has become too complicated, difficult,

and lengthy for many users. It is seen as a source of information overload for inexperienced users,

and some fund managers have reacted negatively to the sheer quantity and complexity of

financial reporting.

Whilst many studies have investigated the financial disclosure by private sector companies,

others have looked at the public sector and not-for-profit organizations. However, relatively limited

Mahdi Sahi et al., Cogent Business & Management (2022), 9: 2135210

https://doi.org/10.1080/23311975.2022.2135210

Page 3 of 17

research has been conducted on financial institutions, including the banking, investment, and

insurance industry (Attia et al., 2019; Oberson, 2021). This study therefore reviewed the existing

research pertaining to financial reporting in this sector and provides some guidelines for further

research using systematic literature review.

3. Methodology

The systematic literature review (SLR) method is widely used in management, finance, and

economics (Hedin et al., 2019). In comparison to a standard review, an SLR may provide much

more impartial findings (Hazaea et al., 2022). Subjective and biased outcomes may be reduced and

the inquiry status may be enhanced when SLRs are used to restrict academics’ preferences in

identifying the sample literature (Khatib, Abdullah, et al., 2022, Al Amosh et al., 2022a; Khatib,

Abdullah, Elamer et al., 2021b; Massaro et al., 2016). Research using the SLR may testify to the

analysis’s openness by permitting replication (Easterby-Smith et al., 2015), and it is distinct from

conventional reviews in that it is produced according to precise and stated guidelines. Therefore, in

this study, we employed the SLR methodology and utilized the Scopus database. Omitting or

excluding important publications was prevented from our investigation by using the Scopus

database, which has been suggested as being the largest abstract indexing database (Abbas,

Jusoh et al., 2022; Abbas et al., 2020; Abbas, Qureshi et al., 2022; Hatzijordanou et al., 2019; Khatib,

Abdullah, Elamer et al., 2021; Sahi, Khalid, Abbas et al., 2021, 2021; Sahi, Khalid et al., 2022).

Additionally, this database has information on a variety of subjects and has complex search tools

that assist researchers in developing search strings that provide reliable results, particularly in

broad domains such as finance and management (Khatib, etal. ,2021b, 2022b).

Several keywords related to financial reporting by financial institutions (banks, investment

firms, and insurance corporations) were used to search the literature. To cover a wide variety of

possibly pertinent phrases, a search for synonyms of the main ideas was conducted in addition to

the keywords. The final search string utilized in this study includes the terms “financial disclo-

sure” OR “financial reporting*” OR “accounting disclosure” OR “accounting reporting*” AND

“financial firm*” OR “financial company*” OR “financial institution*” OR “financial sector*” OR

“financial industry*” OR bank* OR “insurance firm*” OR “insurance compan*” OR “insurance

institution*” OR “insurance sector*” OR “insurance industr*”. Asterisks such as in “reporting*”

were used to find all derivatives of the word. These keyword have been used in several prior

Figure 1. The flowchart depict-

ing the sample collection

procedure.

Mahdi Sahi et al., Cogent Business & Management (2022), 9: 2135210

https://doi.org/10.1080/23311975.2022.2135210

Page 4 of 17

research in the areas of financial reporting and financial firms (i.e., Hassan & Marston, 2019;

Khatib, Abdullah, Elamer et al., 2021b).

Figure 1 illustrates the exclusion and inclusion criteria used for the literature search on Scopus

database. The initial sample included 918 research papers from the Scopus database using the

aforementioned keywords to search the titles and abstracts of the studies. This research is not

tied to a particular year or publication due to the intention to investigate the subject’s evolution

holistically and to include a comprehensive assortment of articles from this field of study. We

omitted the papers that were not published in the English language or in journals due to the

researcher’s language ability. After excluding the papers that did not discuss business, manage-

ment, finance, or economics, the sample was reduced to 680 publications. According to the

research objective, each study should explicitly address the financial reporting by financial

institutions in order to be included in this investigation. By screening the sample titles and

abstracts, a large number of studies were excluded due to the broad search string utilized in

this study. For example, over 100 research articles had the term “non-financial reporting /

disclosure”. The screening process resulted in 325 research articles that addressed the topic

under investigation.

Following several SLRs (i.e., Farah et al., 2021; Hatzijordanou et al., 2019), we limited the

research sample to journals included in the academic journal guide (AJG) ranking 2021. We sought

to base our evaluation on the most rigorous and influential research by considering only publica-

tions from reputable journals. In their reviews, Hatzijordanou et al. (2019) focused on ABS-rated

journals, and Farah et al. (2021) focused on first quartile (Q1) journals. During the quality evalua-

tion, the number was reduced by 121 articles, resulting in 204 studies published in high-quality

journals.

4. Research results

4.1. Quantitative analysis of selected literature

The annual trend of publications indicates that interest has grown over the years as shown in

Figure 2. Over 51% of the literature in this research is from the most recent time quantile, 2015–

2022, highlighting the significance of a survey. The quantity of articles mostly rose after 2010 (65%

of the sample), long after the commencement of research on financial reporting some 30 years

ago. We could think of two practical causes for this delay: the evolution of technology and

legislation. Corporations with publicly traded stocks are required to produce a set of periodic

financial statements each year in compliance with new laws and directives from stock exchanges

that have been implemented over the last few years in all markets (Aladwan & Shatnawi, 2019). In

1990

1992

1993

1994

1995

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Figure 2. Publication trend of

prior studies.

Mahdi Sahi et al., Cogent Business & Management (2022), 9: 2135210

https://doi.org/10.1080/23311975.2022.2135210

Page 5 of 17

addition to altering the public’s mentality, the technology revolution has altered the manner in

which a corporation’s business and process information is communicated. Furthermore, the year

2020 has the most publications with 27 papers due to the COVID-19 pandemic that has brought

environmental concerns to the forefront of researchers’ minds. Also, there is concern about the

ramifications of COVID-19 and its influence on the economy. For example, Velayutham et al.

(2021) looked at how COVID-19 disrupted supply systems and how accounting information

might be used to manage these supply chains in the face of the disruptions. Their study concluded

that COVID-19 impacted output. Such disruptions might be prevented by providing managers with

precise accounting information at every stage of the supply chain. Additionally, external stake-

holders that are attempting to reduce their own risks might find this accounting information

beneficial.

4.2. Prior research settings

The geographical distribution analysis revealed that the majority of previous studies concentrated

on industrialized countries. As Figure 3 shows, data from advanced economies, for instance, the

United Kingdom and the United States, were more numerous. In recent years, financial institutions

in developing and transition economies throughout the globe have been pushed to modify their

lending and financial reporting policies as a result of their nations’ economic transitions. Overall,

evidence from a cross-country sample set was used to support 33% of the empirical publications in

the sample. Prior cross-market studies used samples from as many as 49 countries (Tadesse, 2006)

to as few as five countries (Bin-Ghanem & Ariff, 2016). The cross-country studies concentrated on

Asian and European markets, and only one study considered the African market (Osemene et al.,

2021). Moreover, no study was conducted on Latin America. This scenario necessitates a greater

comparative cross-country investigation of these regimes. This investigation would provide insights

into the effects of economic policy, regulatory and legal limits, and the size of economies on

disclosure efforts, which may vary by country.

Figure 3. The research settings

of prior literature.

Mahdi Sahi et al., Cogent Business & Management (2022), 9: 2135210

https://doi.org/10.1080/23311975.2022.2135210

Page 6 of 17

Accounting methods (for instance, financial reporting policies) may vary not just across nations

but also within nations (Akgün et al., 2021). It has been stated that the legal and institutional

context of a country may influence the financial reporting incentives and, therefore, the quality of

financial information disclosed to stakeholders. Herath et al. (2011) argued that environmental

variations across nations might explain the disparities in financial reporting methods, and inter-

national reporting standards serve to harmonize the discrepancies that cannot be explained by

environmental variations. The issue of non-compliance may cast doubt on the openness, depend-

ability, and quality of financial information between nations (Yamani et al., 2021). Also, it has been

observed that the majority of IFRS users have their own interpretations of IFRS compliance. Their

interpretations may vary considerably from those stated by the International Accounting

Standards Board (IASB), creating varying degrees of IFRS compliance that have become

a contentious issue. Even though their policies for IFRS adoption may differ, countries should not

underestimate the necessity of correct implementation as advised by the IASB. Inequalities in

national infrastructure also have an undeniable influence on non-compliance, particularly in

developing nations, and the effectiveness of enforcement regimes.

However, certain African, Latin American, and Middle Eastern nations have been neglected.

Consequently, experts encourage researchers to focus their efforts on countries that have received

little attention. The experience of implementation and advantages, as well as the motives for

acceptance, will differ among nations based on their accounting and regulatory systems, their

historical context, and other factors. Therefore, a country-specific study was required to compre-

hend the impacts of local characteristics. Considering the expanding effect of developing econo-

mies on the global economy, the necessity for research became more apparent. Comparatively,

these economies have less developed regulatory and financial institutional architectures. This

research gap in the IFRS adoption and convergence sector was the major inspiration and reason

for the exploratory study on India’s huge and rising economy, with the aims of making

a substantial addition to the current IFRS research literature.

Despite the disparities in social, legal, and cultural systems, empirical data highlights the notion

that accounting rules and laws are successfully transmitted across borders. Consequently, the

formulation and acceptance of IASB’s global accounting standards might have a favorable effect

on the profit quality of enterprises in the adopting nations, regardless of the social, legal, and

cultural variations (Lee & Seo, 2010). Kim et al. (2011) discovered no substantial difference

between nations with strong and weak creditor rights regarding the adoption impacts.

Financial markets, which include stock markets, wholesale money markets, bond markets, and

lending outside of traditional bank channels, are major components of the financial sector, and

they play distinct roles in the economic activity. Financial institutions include banks, insurance

providers, investment managers, funds, and other non-bank financial institutions. The majority of

existing studies have focused on the banking industry, while others have specified one type of

bank, such as commercial (Gallemore, 2022; Lefanowicz & Mclelland, 2002) and Islamic banks (H.

Ahmed et al., 2019; Authors, 2008). Islamic banks are interest-free, and their banking operations

are based on various financing forms of sharing the foundation of payment responsibilities with

income accrual, hence eliminating the key drivers of market volatility. Their unique characteristics

require them to adhere to stringent financial reporting requirements (Almutairi & Quttainah, 2019).

Gharbi (2016) argued that benchmarking interest rates could not fully discriminate between

Islamic transactions and commodities; hence, stakeholders lose trust in Islamic branding. This

scenario indicates that more works need to differentiate between banks’ types. Yamani et al.

(2021) suggested that academics might compare the accounting standards of these two types of

banks. Lastly, very limited existing literature focuses on the insurance sector.

Mahdi Sahi et al., Cogent Business & Management (2022), 9: 2135210

https://doi.org/10.1080/23311975.2022.2135210

Page 7 of 17

4.3. Qualitative analysis of selected literature

4.3.1. Financial reporting on corporate governance and auditing

The financial sector is a vital, competitive, and high-profile business; its top firms must preserve

their market credibility in the face of exposures of unethical or illegal conduct and a lack of

accountability. In the last two decades, the 2008 financial crisis that almost caused the banking

industry to collapse and the failure of the financial reporting of several banks (e.g., National

Australia Bank in 2004) to provide an authentic depiction of their activities highlighted the arbitrary

nature of audited financial reporting and emphasized the increasing necessity for robust corporate

governance measures. Also, the globalization of financial markets and the impact of investors who

need accurate information about the economic and financial state of organizations have led to the

harmonization of corporate governance and accounting (Gras-Gil et al., 2012). These occurrences

indicate that financial institutions have been able to preserve their credibility within the arbitrary

institutional context in which they operate that necessitates the tightening of corporate govern-

ance measures to avoid fraud and mismanagement (Abraham et al., 2008; Gras-Gil et al., 2012).

Prior studies have emphasized the roles of internal/external audits and audit committees in

improving the quality of financial reporting (Aanu et al., 2016; Bratten et al., 2019; Coffie & Bedi,

2019; Gras-Gil et al., 2012; Krishnan & Zhang, 2014a). However, little work has considered the

functions of other monitoring mechanisms, i.e., the board of directors (Abraham et al., 2008;

Higson, 2013; Holland, 1999). It is widely accepted that audit rules matter and that the influence

of audit regulations on the reporting quality of a financial institution varies based on the kind of

audit regulation. Scholars have suggested that the quality of financial reporting is improved with

more experts on the audit committee (Aanu et al., 2016), audit firm tenure (Bratten et al., 2019),

internal audit involvement (Gras-Gil et al., 2012), audit committee disclaimer language (Naaman

et al., 2021), and audit fees (Kanagaretnam et al., 2010; Krishnan & Zhang, 2014b). Furthermore,

Aanu et al. (2016) argued that the reliability and relevance of financial reporting are enhanced by

the presence of an accounting expert on the audit committee, suggesting that the presence of an

accounting expert on the audit committee has a more favorable impact on the financial report

quality than on financial and supervisory expertise. Gras-Gil et al. (2012) discovered that enhanced

financial reporting resulted from improved internal and external communication during the annual

audit. However, does the collaboration with other monitoring mechanisms (including the audit

committee) serve to reinforce accountability, leading to better disclosure? Do these effects hold

true for all types of financial institutions? These questions have yet to be answered. Bratten et al.

(2019) maintained that the financial reporting quality improves with audit firm tenure, particularly

in banks that have more complex operations. A short tenure would have a detrimental effect on

audit firms’ investments in client-specific knowledge, especially in circumstances where this

information is most needed.

Other scholars discussed the effect of IFRS adoption on auditing fees. They reported that higher

fees are paid after the switch to the new standards (Cameran & Perotti, 2014; Coffie & Bedi, 2019),

suggesting that the implementation of IFRS increases auditors’ efforts in terms of time and the

complexity of some aspects of the standards.

Interestingly, few studies have focused on board characteristics and committees even though

the financial crises of 1998 and 2008 almost led to the collapse of the financial industry and were

linked to ineffective governance roles. The development of corporate governance may be sub-

stantially hampered by a lack of understanding of financial statements, which are seen as a crucial

component of accountability (Higson, 2013). The public publication of financial statements and the

financial reporting cycle are fundamental to corporate governance (Holland, 1999). Public and

private information sources are used to establish a financial institution’s knowledge advantage.

The institutions use this information to identify issue areas in strategy, management quality, and

board effectiveness, as well as their influence on financial performance. The accountability of

directors and the effectiveness of corporate governance are in question in the absence of

Mahdi Sahi et al., Cogent Business & Management (2022), 9: 2135210

https://doi.org/10.1080/23311975.2022.2135210

Page 8 of 17

a complete understanding of the boundaries and restrictions of the financial statements. Abraham

et al. (2008) stated that only disclosures concerning corporate governance processes have

a significant legitimizing function, boosting the view that financial reports are consistent with

the organization’s reality. Karajeh (2022) focused on the monitoring mechanisms individually and

discovered that nationality and the presence of women on the board had a significant moderating

impact on managers’ incentives to boost the quality of financial disclosure processes and bank

dividends.

4.3.2. Online financial reporting

Financial transparency and disclosure are two cornerstones of corporate governance that com-

municate a corporation’s financial situation and performance to capital markets. Online financial

disclosure has been considered one of the main channels utilized by corporations worldwide to

communicate with decision-makers. Online financial information disclosure is a kind of voluntary

disclosure regarding the trading of products, including shares. Recently, the internet has under-

gone a rapid growth and has gained increasing acceptance among its users. This development has

a significant influence on the ways to communicate information. Businesses have started employ-

ing a new kind of voluntary disclosure, referred to as online financial disclosure, since traditional

paper-based disclosure procedures are costly and constrained.

Empirically, although some researchers have discussed the determinants and consequences of

the online reporting by financial institution, their findings are still indecisive. For example, incon-

sistent conclusions regarding the relationship between online financial transparency and corporate

success were published (see, Al-Sartawi & Reyad, 2019; Bin-Ghanem & Ariff, 2016). Even the

degree and breadth of internet reporting have little effect on stock returns (Hussein & Nounou,

2021). However, in a study that focused on Islamic banks, Musleh Al-Sartawi (2018) showed

a correlation between the degree of online financial transparency and performance measures.

Figure 4. Online financial

reporting quality.

Mahdi Sahi et al., Cogent Business & Management (2022), 9: 2135210

https://doi.org/10.1080/23311975.2022.2135210

Page 9 of 17

These mixed findings raise the question of whether the consequences of online reporting differ

among various types of financial institutions.

As Figure 4 shows, among the determinants of internet financial reporting practice, it was found

that profitability, size, ownership structure, liquidity, and leverage are under firm characteristics

(Adugna & Kumar, 2021; Elsayed et al., 2010; Sarea et al., 2021). Several factors pertaining to

online disclosure that have not been considered by previous researchers could be addressed in

future research. Standardization of online financial reporting is another promising area. The

disclosure requirement stipulates that organizations must disclose sufficiently standardized busi-

ness-related information to enable current and prospective shareholders, creditors, and other

users to make meaningful comparisons of crucial facts.

4.3.3. Transparency and timeliness

The timeliness of financial reporting is the amount of time between the end of the corporation’s

fiscal year and the publication date of the audited annual report. Providing information that will

help external users make educated decisions is one of the most important objectives of financial

reporting. Accounting data must be relevant, dependable, comparable, timely, and easy to com-

prehend in order to be valuable. Information must be made accessible quickly to prevent it from

losing its economic worth. However, few scholars have highlighted reporting timeliness in the

financial sector (A. A. A. Ahmed, 2010; Alali & Elder, 2014; Ben Rejeb Attia et al., 2019; Huang et al.,

2017; Mohsin et al., 2021). For example, Attia et al. (2019) maintained that the association

between stock price and reporting timeliness varies across bigger and riskier banks operating in

an active stock market. However, these studies were conducted in the banking sector, and no

studies were found to consider other types of firms within this industry (i.e., insurance, investment,

or certain types of banks).

Transparency in financial reporting is seen as vital to enable people to comprehend and form

their opinions about organizations. In an attempt to understand the drivers of transparency of

financial institutions, scholars reported important determinants such as regulatory oversight

(Costello et al., 2019), financial literacy (Jin et al., 2021), and top management and gender diversity

(Janahi et al., 2021).

4.3.4. Determinants of financial reporting quality

Prior studies on the quality of financial reporting have mostly focused on the effects of non-

financial business governance elements (García-Meca & García-Sánchez, 2018). Due to manage-

ment’s opportunistic actions, if the supervision of major financial institutions weakened, the quality

of financial reporting would decline. Non-financial firms have fewer informative inconsistencies

and a more distinct capital structure than financial companies.

Empirical studies (Almutairi & Quttainah, 2019; García-Meca & García-Sánchez, 2018) have

reported that the quality of financial reporting by banks is significantly influenced by managerial

skills and governance standards, and competent bank managers are less likely to participate in

opportunistic profit management. Also, Altamuro and Beatty (2010) found that, in the case of

affected rather than unaffected banks, internal control requirements increased the issues of loan

loss provision, cash-flow predictability, and earnings persistence while lowering benchmark-beating

and accounting conservatism. However, some studies failed to link the level of financial disclosure to

firms’ specific characteristics, including profitability and size (Shil & Chowdhury, 2012).

On the macroeconomic level, Kanagaretnam et al. (2014) maintained that all five of the

analyzed indicators of earnings quality were greater in economies with more effective political,

extralegal, and judicial institutions. Also, loan loss provisions were slightly disclosed in countries

with stronger institutions. Amidu and Issahaku (2019) explained cross-country reporting varia-

tions, maintaining that banks with relatively good profit quality in emerging nations might be

linked to the use of IFRS and the nature of its interaction with globalization, as well as the banking

Mahdi Sahi et al., Cogent Business & Management (2022), 9: 2135210

https://doi.org/10.1080/23311975.2022.2135210

Page 10 of 17

industry’s aim of diversifying its revenue streams to include both interest- and non-interest-

bearing ones.

4.3.5. Consequences of financial reporting quality

A portion of the sample literature demonstrates the positive effects of financial disclosure for

business firms, especially after a financial crisis, which sparks discussion on how to improve the

transparency of financial institutions. Researchers agree that financial statements reflect

a corporation’s real performance at a specific point in time (Aladwan & Shatnawi, 2019).

Therefore, it is anticipated that the content of financial statements will accurately represent the

economic situation of a corporation. Palea and Scagnelli (2017) showed that IFRS enhanced the

predictability of projected cash flows based on net income. Others supported risk-taking reduction

(Balakrishnan & Ertan, 2018) and cost reduction influences on reporting quality (Chen & Zhu, 2013;

Nahar et al., 2016; Yamani et al., 2021).

However, there is inadequate evidence that efficient financial disclosures could boost the

performance and evaluation of firms. Abdallah et al. (2018) found that the majority (but not all)

of the factors that contributed to the adoption of IFRS were well received by investors in the

insurance industry. Interestingly, some scholars found that the full implementation of IFRS had

a detrimental impact on net foreign direct investment due to the comparability effect (Nnadi &

Soobaroyen, 2015). Du et al. (2016) found that if banks had higher financial statement transpar-

ency, their stocks’ equities had less stock return synchronization and lower negative returns.

Previously, Lefanowicz and Mclelland (2002) found no linear association between equity returns

and financial reporting. Similarly, Uzoma et al. (2016) discovered that banks’ increased profits were

not due to their disclosure of a set of financial statements that adhered to IFRS, suggesting that

such performance might have been prompted by other variables such as recapitalization and

cross-border listing. Some studies (i.e., ElKelish, 2021; Lefanowicz & Mclelland, 2002) highlighted

the potential for a nonlinear relationship between information disclosure quality and economic

consequences.

Furthermore, are these consequences influenced by the institutional and protection environment?

Armstrong et al. (2010) observed a progressively unfavorable response for businesses based in code-

law nations, consistent with shareholders’ concerns over the implementation of IFRS in such jurisdic-

tions. In a similar vein, regimes with lower depositor insurance and external supervision, as well as

regimes with stronger capital markets, might have superior reporting quality results.

5. Discussion and recommendations for future research

Based on our investigation of the quality of financial disclosure by financial instructions, a number

of issues for further research have emerged. The majority of studies on financial reporting quality

have prioritized non-financial enterprises relative to financial firms (I. E. Ahmed, 2020; Kolsi &

Grassa, 2017), with an emphasis on the banking sector. Our assessment indicates that there are

a number of determinants and implications of reporting quality in financial organizations that

warrant further research. Some of these directions are outlined below.

There are several reasons for the paucity of research in emerging countries and cross-country

situations (Hussein & Nounou, 2021; Madugba et al., 2021; Salem et al., 2021). Due to a dearth of

yearly reports in the English language from developing nations, some researchers face difficulties

to access the data from these nations. However, more and more corporations are releasing their

annual reports in English, resulting in greater availability of pertinent information. Therefore, we

should anticipate an increase in cross-country research and research undertaken in emerging

markets. In addition, most of the research prefers to gather data from a single nation to eliminate

variances in accounting, cultural, economic, legal, and political systems.

The differentiating economic outcomes (including performance, share price, cost of capital, and

growth prospects) of financial reporting quality is that greater quality results in better outcomes,

Mahdi Sahi et al., Cogent Business & Management (2022), 9: 2135210

https://doi.org/10.1080/23311975.2022.2135210

Page 11 of 17

including performance, share price, cost of capital, and growth opportunities. However, there is no

convincing evidence that timely and/or high-quality financial disclosure might improve the perfor-

mance and evaluation of firms. According to Du et al. (2016), banks with greater degrees of

financial statement transparency have less stock return synchronization and fewer highly negative

returns, although Lefanowicz and Mclelland (2002) found no linear association between financial

reporting and equity returns. Some studies (i.e., ElKelish, 2021; Lefanowicz & Mclelland, 2002)

examined the possibility of a nonlinear relationship between the value of information disclosure

and its economic implications. This trend raises the question regarding the type and direction of

the causal relationship between disclosure and economic consequences.

Moreover, from an investor’s viewpoint, IFRS produces financial reporting of a higher quality than

local GAAP does (De George et al., 2016). This is because IFRS focuses on improving information

quality by using fair value accounting (Armstrong et al., 2010). However, limited studies have

assessed the potential advantages of IFRS adoption from the standpoint of investors in financial

institutions (De George et al., 2016). It is also unknown how such a shift would affect the study of

financial statements and how it would alter investors’ views of the condition and performance of

firms (Rodríguez-Pérez et al., 2011).

Literature on financial reporting is complex and diverse, and its quality is heavily impacted by

businesses’ monitoring techniques. Even though financial institutions have more asymmetric

information and a more distinct capital structure than non-financial firms, previous research has

devoted little attention to them. Also, prior research has mostly emphasized the roles of internal/

external auditing and audit committees in enhancing financial reporting quality (Aanu et al., 2016;

Bratten et al., 2019; Coffie & Bedi, 2019; Gras-Gil et al., 2012; Krishnan & Zhang, 2014b), while

limited work has considered the functions of other monitoring mechanisms, i.e., the board of

directors (Abraham et al., 2008; Higson, 2013; Holland, 1999). In the same context, a number of

concerns have remained unresolved, including whether cooperation with other monitoring

mechanisms (such as the audit committee) would contribute to strengthening accountability,

resulting in improved disclosure. It is also unknown whether these effects apply to all types of

financial institutions. Bratten et al. (2019) argued that audit firm tenure would improve the

financial reporting quality, especially in banks with more complex operations.

Additionally, there are other unexplored areas in the literature. In their study, Armstrong et al.

(2010) observed a progressively unfavorable response for businesses based in code law nations, in

line with investors’ concerns over the implementation of IFRS in such jurisdictions. In a similar vein,

regimes with lower depositor insurance and external supervision, as well as regimes with stronger

capital markets, might have superior reporting quality results. Despite the global significance of

foreign investment and the financial industry, the timeliness of banks’ financial reporting has not

been studied on a macroeconomic scale, with the exception of a few studies.

6. Conclusion

The existing literature in the domains of accounting, information systems, and analytics provides

valuable insights into the far-reaching impacts of financial reporting fraud at various economic

levels. However, despite the increasing attention to financial reporting quality, there are limited

works on the reporting practices by financial institutions. In this study, we synthesized the multi-

disciplinary research on the financial reporting practices of financial institutions. The systematic

approach used resulted in a final sample of 204 publications on the financial reporting by financial

institutions. We believe that financial reporting fraud detection initiatives and research will be

more effective if the results of these many fields are systematically analyzed.

The findings revealed the various topics explored by scholars concerning financial institutions’

reporting practices. However, inconclusive findings have been produced, especially on the eco-

nomic consequences of financial reporting. Future scholars may be able to conduct more in-depth

analyses utilizing updated datasets and empirical models to determine if these inconsistencies are

Mahdi Sahi et al., Cogent Business & Management (2022), 9: 2135210

https://doi.org/10.1080/23311975.2022.2135210

Page 12 of 17

the result of methodological flaws. Future academics may also bridge the gap between the diverse

theoretical assumptions and identify the relevant ramifications of corporations’ social actions.

Several empirical results in the literature do not seem to be supported by solid theories. Future

studies should address these gaps to provide deeper knowledge of corporate and social respon-

sibilities (CSR) and their effects on corporate performance as a whole. Furthermore, the investiga-

tion revealed the significance of monitoring attributes in influencing the financial reporting quality.

However, the existing literature focused on internal/external auditing and audit committee char-

acteristics, and only a few studies examined the functions of other monitoring mechanisms, i.e.,

the board of directors. In addition, there is no conclusive evidence that effective financial trans-

parency might enhance the performance and evaluation of companies. In addition, these effects

are impacted by institutional and protective environmental disparities across markets. Our analysis

of the relevant literature led to the recommendation of several potential research topics.

The research process and the related qualitative methodology are not without limitations.

Although the SLR was performed in a coherent manner, this research was time-bound and

exclusively examined articles written in English. Several countries publish periodicals in their

original languages that we were unable to assess. Also, in accordance with our study’s inclusion

and exclusion criteria, we included only high-quality academic journals that had been peer-

reviewed and excluded several potentially relevant papers from the Scopus database. Future

reviews may use other databases to cover a broader spectrum of relevant research. Despite the

constraints described above, our thorough literature review technique assembled a diversity of

academic publications for evaluation, thereby establishing a solid foundation of literature that

reflects the field’s financial reporting contributions in terms of quality and influence. Hence, the

exclusion of fewer articles should have little impact on the outcome of our research, which

provides a foundational knowledge of the present situation of financial reporting.

Funding

The authors received no direct funding for this research.

Author details

Ahmed Mahdi Sahi

E-mail: [email protected]

ORCID ID: http://orcid.org/0000-0002-3224-7812

Alaa Mahdi Sahi

E-mail: [email protected]

ORCID ID: http://orcid.org/0000-0002-0580-8602

Alhamzah F. Abbas

E-mail: [email protected]

ORCID ID: http://orcid.org/0000-0002-7508-9340

Saleh F. A. Khatib

E-mail: [email protected]

ORCID ID: http://orcid.org/0000-0001-7652-4191

College of Administration and Economics, Thi-Qar

University, Nasiriyah, Iraq.

College of Administration and Economics, Wasit

University, Al-Kut, Iraq.

Azman Hashim International Business School, Universiti

Technologi Malaysia, Johor Bahru, Malaysia.

Disclosure statement

No potential conflict of interest was reported by the

author(s).

Correction

This article has been republished with minor changes.

These changes do not impact the academic content of

the article.

Citation information

Cite this article as: Financial reporting quality of financial

institutions: Literature review, Ahmed Mahdi Sahi, Alaa

Mahdi Sahi, Alhamzah F. Abbas & Saleh F. A. Khatib,

Cogent Business & Management (2022), 9: 2135210.

References

Aanu, O. S., Samuel, F. A., Ajayi, A., & Folashade, O. (2016).

Examining the quality of financial reporting in the

banking sector in Nigeria: Does audit committee

accounting expertise matter? Journal of Internet

Banking and Commerce, 21(3). https://www.icommer

cecentral.com/open-access/examining-the-quality-

of-financial-reporting-in-the-banking-sector-in-

nigeria-does-audit-committee-accounting-expertise-

matter.php?aid=81765

Abbas, A. F., Jusoh, A., Mas, A., Alsharif, A. H., Ali, J., &

Tan, A. W. K. (2022). Bibliometrix analysis of infor-

mation sharing in social media. Cogent Business &

Management, 9(1). https://doi.org/10.1080/

23311975.2021.2016556

Abbas, A. F., Jusoh, A. B., Masod, A., & Ali, J. (2020).

Bibliometric analysis of global research trends on

electronic word of mouth using Scopus database.

Journal of Critical Reviews, 7(16), 405–412. https://

doi.org/10.31838/jcr.07.16.49

Abbas, A. F., Qureshi, N. A., Khan, N., Chandio, R., & Ali, J.

(2022). The blockchain technologies in healthcare :

Prospects, obstacles, and future recommendations ;

lessons learned from digitalization. International

Journal of Online and Biomedical Engineering (IJOE),

18(9), 144–159. https://doi.org/10.3991/ijoe.v18i09.

32253Alhamzah

Abdallah, A. A. N., Abdallah, W., & Salama, F. M. (2018).

The market reaction to the adoption of IFRS in the

European insurance industry. Geneva Papers on Risk

and Insurance: Issues and Practice, 43(4), 653–703.

https://doi.org/10.1057/s41288-018-0088-1

Abraham, A., Deo, H., & Irvine, H. (2008). What lies beneath?

Financial reporting and corporate governance in

Australian banks. Asian Review of Accounting, 16(1),

4–20. https://doi.org/10.1108/13217340810872445

Mahdi Sahi et al., Cogent Business & Management (2022), 9: 2135210

https://doi.org/10.1080/23311975.2022.2135210

Page 13 of 17

Adugna, B. M., & Kumar, B. (2021). Determinants of

internet financial reporting: In the case of Ethiopian

insurance and banking sector companies.

Innovations, 66(November), 760–778. https://ssrn.

com/abstract=4085758

Ahmed, A. A. A. (2010). The effect of timeliness regu-

lation of corporate financial reporting: Evidence

from banking sector of Bangladesh. International

Journal of Accounting & Information Management,

18(1), 2–4. https://doi.org/10.1108/ijaim.2010.

36618aad.005

Ahmed, I. E. (2020). The qualitative characteristics of

accounting information, earnings quality, and

Islamic banking performance: Evidence from the gulf

banking sector. International Journal of Financial

Studies, 8(2), 1–16. https://doi.org/10.3390/

ijfs8020030

Ahmed, H., Tajul Ariffin, F. A., Karbhari, Y., & Shafii, Z.

(2019). Diverse accounting standards on disclosures

of Islamic financial transactions: Prospects and

challenges of narrowing gaps. Accounting, Auditing

and Accountability Journal, 32(3), 866–896. https://

doi.org/10.1108/AAAJ-10-2015-2266

Akgün, A. İ., Altunbaş, Y., & Uymaz, Y. (2021). The rela-

tionship between financial reporting standards and

accounting irregularities: Evidence from US banks.

Journal of Financial Crime, 28(4), 1161–1178. https://

doi.org/10.1108/JFC-10-2020-0218

Aladwan, M., & Shatnawi, Y. (2019). The association

between accounting disclosures and stock market

price: An empirical study on Jordanian commercial

banks. International Journal of Managerial and

Financial Accounting, 11(1), 73–92. https://doi.org/10.

1504/IJMFA.2019.097831

Alali, F. A., & Elder, R. J. (2014). Determinants of audit

report lag in the banking industry: Updated evidence.

International Journal of Accounting, Auditing and

Performance Evaluation, 10(4), 364–394. https://doi.

org/10.1504/IJAAPE.2014.066391

Almutairi, A. R., & Quttainah, M. A. (2019). Corporate

governance and accounting conservatism in Islamic

banks. Thunderbird International Business Review, 61

(5), 745–764. https://doi.org/10.1002/tie.22063

Al-Sartawi, A. M. A. M., & Reyad, S. M. R. (2019). The rela-

tionship between the extent of online financial disclo-

sure and profitability of Islamic banks. Journal of

Financial Reporting and Accounting, 17(2), 343–362.

https://doi.org/10.1108/JFRA-11-2017-0103

Alslihat, N., Alrawashdeh, N., Al-Ali, S., Al-Omari, M.,

Gazzaz, A., & Alali, H. (2017). Accounting disclosure of

both financial and non-financial information in the light

of international accounting standards. International

Journal of Economic Research, 14(12), 105–118. https://

serialsjournals.com

Altamuro, J., & Beatty, A. (2010). How does internal con-

trol regulation affect financial reporting? Journal of

Accounting and Economics, 49(1–2), 58–74. https://

doi.org/10.1016/j.jacceco.2009.07.002

Amernic, J. H. (1988). Accounting industrial disclosure

and relations : A review article. The British Accounting

Review, 201, 141–157. https://doi.org/10.1016/0890-

8389(88)90037-6

Amidu, M., & Issahaku, H. (2019). Do globalisation and

adoption of IFRS by banks in Africa lead to less

earnings management? Journal of Financial Reporting

and Accounting, 17(2), 222–248. https://doi.org/10.

1108/JFRA-05-2017-0035

Armstrong, C. S., Barth, M. E., Jagolinzer, A. D., & Riedl, E. J.

(2010). Market Reaction to the Adoption of IFRS in

Europe. The Accounting Review, 85(1), 31–61. https://

doi.org/10.2308/accr.2010.85.1.31

Armstrong, C. S., Barth, M. E., Jagolinzer, A. D., & Riedl, E. J.

(2010). Market reaction to the adoption of IFRS in

Europe. The accounting review, 85(1), 31–61. https://

doi.org/10.2308/accr.2010.85.1.31

Arora, A. (2021) Human resources accounting disclosure

practices (HRADP): August. https://doi.org/10.4018/

IJSSMET.2021010106

Attia, M. B. R., Lassoued, N., & Sassi, H. (2019). Financial

reporting timeliness and the value relevance of earn-

ings: Evidence from banks in the MENA countries.

International Trade Journal, 33(3), 277–301. https://

doi.org/10.1080/08853908.2018.1459212

Authors, F. (2008). The need for Shariah harmonization in

financial reporting standardization: The case of

Indonesia. Managerial Finance, 34(10. https://doi.org/

10.1108/mf.2008.00934jaa.001

Balakrishnan, K., & Ertan, A. (2018). Banks’ financial

reporting frequency and asset quality. Accounting

Review, 93(3), 1–24. https://doi.org/10.2308/accr-

51936

Bin-Ghanem, H. O., & Ariff, A. M. (2016). Internet financial

reporting and firm value: evidence from gulf coop-

eration council countries. International Journal of

Accounting, Auditing and Performance Evaluation, 12

(3), 237–260. https://doi.org/10.1504/IJAAPE.2016.

077891

Bratten, B., Causholli, M., & Omer, T. C. (2019). Audit

firm tenure, bank complexity, and financial report-

ing quality. Contemporary Accounting Research, 36

(1), 295–325. https://doi.org/10.1111/1911-3846.

12427

Cameran, M., & Perotti, P. (2014). Audit fees and IAS/IFRS

adoption: Evidence from the banking industry.

International Journal of Auditing, 18(2), 155–169.

https://doi.org/10.1111/ijau.12019

Chen, C., & Zhu, S. (2013). Financial reporting quality, debt

maturity, and the cost of debt: Evidence from China.

Emerging Markets Finance and Trade, 49(SUPPL. 4),

236–253. https://doi.org/10.2753/REE1540-

496X4905S416

Coffie, W., & Bedi, I. (2019). The effects of IFRS adoption

and firm size on audit fees in financial institutions in

Ghana. Accounting Research Journal, 32(3), 436–453.

https://doi.org/10.1108/ARJ-07-2017-0114

Costello, A. M., Granja, J., & Weber, J. (2019). Do strict

regulators increase the transparency of banks?

Journal of Accounting Research, 57(3), 603–637.

https://doi.org/10.1111/1475-679X.12255

De George, E. T., Li, X., & Shivakumar, L. (2016). A review

of the IFRS adoption literature. Review of Accounting

Studies, 21(3), 898–1004. https://doi.org/10.1007/

s11142-016-9363-1

Du, C., Song, L., & Wu, J. (2016). Bank accounting disclo-

sure, information content in stock prices, and stock

crash risk: Global evidence. Pacific Accounting Review,

28(3), 260–278. https://doi.org/10.1108/PAR-09-

2015-0037

Easterby-Smith, M., Thorpe, R., & Jackson, P. (2015)

Reviewing the literature. Management & Business

Reasearch. Sage. https://uk.sagepub.com/en-gb/eur/

management-and-business-research/book271025

ElKelish, W. W. (2021). The international financial reporting

standards 9 financial instruments, information quality

and stock returns in the modern technology era.

Journal of Applied Accounting Research, 22(3),

465–483. https://doi.org/10.1108/JAAR-12-2019-0164

Elsayed, A., El-Masry, A., & Elbeltagi, I. (2010). Corporate

governance, firm characteristics and internet finan-

cial reporting: Evidence from Egyptian listed

companies. Corporate Ownership and Control, 7(4),

397–426. https://doi.org/10.22495/cocv7i4c4p1

Mahdi Sahi et al., Cogent Business & Management (2022), 9: 2135210

https://doi.org/10.1080/23311975.2022.2135210

Page 14 of 17

Farah, B., Elias, R., Aguilera, R., & Abi Saad, E. (2021).

Corporate governance in the Middle East and North

Africa: A systematic review of current trends and

opportunities for future research. Corporate

Governance: An International Review, 29(6), 630–660.

https://doi.org/10.1111/corg.12377

Gallemore, J. (2022) Bank financial reporting opacity and

regulatory intervention. Review of Accounting

Studies. In press https://doi.org/10.1007/s11142-022-

09674-4.

García-Meca, E., & García-Sánchez, I. M. (2018). Does

managerial ability influence the quality of financial

reporting? European Management Journal, 36(4),

544–557. https://doi.org/10.1016/j.emj.2017.07.010

Gharbi, L. (2016). A critical analysis of the use of fair value

by Islamic Financial Institutions. Journal of Islamic

Accounting and Business Research, 7(2), 170–183.

https://doi.org/10.1108/JIABR-10-2013-0037

Gosselin, A., Le Maux, J., & Smaili, N. (2021). Readability of

accounting disclosures: A comprehensive review and

research agenda. Accounting Perspectives, 20(4),

543–581. https://doi.org/10.1111/1911-3838.12275

Gras-Gil, E., Marin-Hernandez, S., & de Lema, D. G. P.

(2012). Internal audit and financial reporting in the

Spanish banking industry. Managerial Auditing

Journal, 27(8), 728–753. https://doi.org/10.1108/

02686901211257028

Hassan, O. A. G., & Marston, C. (2019). Corporate financial

disclosure measurement in the empirical accounting

literature: A review article. International Journal of

Accounting, 54(2), 1950006. https://doi.org/10.1142/

S1094406019500069

Hatzijordanou, N., Bohn, N., & Terzidis, O. (2019)

A systematic literature review on competitor analy-

sis: Status quo and start-up specifics. Management

Review Quarterly, 69 (4), 415–458. Springer

International Publishing https://doi.org/10.1007/

s11301-019-00158-5

Hazaea, S. A., Zhu, J., Khatib, S. F. A., Bazhair, A. H., &

Elamer, A. A. (2022). Sustainability assurance prac-

tices: A systematic review and future research

agenda. Environmental Science and Pollution

Research, 29(4), 4843–4864. https://doi.org/10.1007/

s11356-021-17359-9

Hedin, B., Katzeff, C., Eriksson, E., & Pargman, D. (2019).

A systematic review of digital behaviour change

interventions for more sustainable food

consumption. Sustainability, 11(9), 2638. https://doi.

org/10.3390/su11092638

Herath, S. K., McCoy, R., Lucas, S. M., & Mensah, E. (2011).

Understanding international financial reporting

standards (IFRS): A review and evaluation of IFRS

research. International Journal of Managerial and

Financial Accounting, 3(3), 304–322. https://doi.org/

10.1504/IJMFA.2011.041759

Higson, A. (2013). The potential implications of the

financial reporting expectations gap for the

development of corporate governance.

International Journal of Disclosure and

Governance, 10(3), 234–245. https://doi.org/10.

1057/jdg.2013.25

Holland, J. (1999). Financial reporting, private disclosure

and the corporate governance role of financial

institutions. Journal of Management and Governance,

3(2), 161–187. https://doi.org/10.1023/

A:1009991609633

Huang, H. W., Dao, M., & Sun, W. C. (2017). The timeliness

of financial reporting and fair values: Evidence from

U.S. Banks. Review of Pacific Basin Financial Markets

and Policies, 20(1), 1–30. https://doi.org/10.1142/

S0219091517500060

Hussein, A., & Nounou, G. (2021). The impact of internet

financial reporting on Egyptian company’s perfor-

mance. Journal of Financial Reporting and Accounting.

https://doi.org/10.1108/JFRA-10-2020-0293

Janahi, M., Millo, Y., & Voulgaris, G. (2021). CFO gender

and financial reporting transparency in banks.

European Journal of Finance, 27(3), 199–221. https://

doi.org/10.1080/1351847X.2020.1801481

Jin, J., Kanagaretnam, K., Liu, Y. I., & Cheng, M. (2021).

Does citizens’ financial literacy relate to bank finan-

cial reporting transparency? European Accounting

Review, 30(5), 887–912. https://doi.org/10.1080/

09638180.2021.1965897

Kanagaretnam, K., Krishnan, G. V., & Lobo, G. J. (2010). An

empirical analysis of auditor Independence in the

banking industry. Accounting Review, 85(6), 2011–

2046. https://dx.doi.org/10.2139/ssrn.1218946

Kanagaretnam, K., Lim, C. Y., & Lobo, G. J. (2014). Effects of

international institutional factors on earnings quality

of banks. Journal of Banking and Finance, 39(1),

87–106. https://doi.org/10.1016/j.jbankfin.2013.11.005

Karajeh, A. I. (2022). The moderating role of board diver-

sity in the nexus between the quality of financial

disclosure and dividends in Jordanian-listed banks.

Asia-Pacific Journal of Business Administration.

https://doi.org/10.1108/apjba-06-2021-0260

Khatib, S. F. A., Abdullah, D. F., Al Amosh, H.,

Bazhair, A. H., & Kabara, A. S. (2022a). Shariah

auditing: Analyzing the past to prepare for the

future auditing. Journal of Islamic Accounting and

Business Research, 13(5), 791–818. https://doi.org/

10.1108/JIABR-11-2021-0291

Khatib, S. F. A., Abdullah, D. F., Elamer, A. A., & Abueid, R.

(2021b). Nudging toward diversity in the boardroom:

A systematic literature review of board diversity of

financial institutions. Business Strategy and the

Environment, 30(2), 985–1002. https://doi.org/10.

1002/bse.2665

Khatib, S. F. A., Abdullah, D. F., Elamer, A., & Hazaea, S. A.

(2022b). The development of corporate governance

literature in Malaysia: A systematic literature review

and research agenda. Corporate Governance: The

International Journal of Business in Society, 22(5),

1026–1053. https://doi.org/10.1108/CG-12-2020-0565

Khatib, S. F. A., Abdullah, D. F., Elamer, A., Yahaya, I. S., &

Owusu, A. (2021) Global trends in board diversity

research : A bibliometric view. Meditari Accountancy

Research. https://doi.org/10.1108/MEDAR-02-2021-

1194

Khatib, S. F. A., Abdullah, D. F., Hendrawaty, E., &

Elamer, A. A. (2021b) A bibliometric analysis of cash

holdings literature: Current status, development, and

agenda for future research. Management Review

Quarterly. in press(0123456789). https://doi.org/10.

1007/s11301-021-00213-0

Kim, J. B., Tsui, J. S. L., & Yi, C. H. (2011). The voluntary

adoption of International financial reporting stan-

dards and loan contracting around the world. Review

of Accounting Studies, 16(4), 779–811. https://doi.org/

10.1007/s11142-011-9148-5

Kolsi, M. C., & Grassa, R. (2017). Did corporate governance

mechanisms affect earnings management? Further

evidence from GCC Islamic banks. International

Journal of Islamic and Middle Eastern Finance and

Management, 10(1), 2–23. https://doi.org/10.1108/

IMEFM-07-2015-0076

Krishnan, G. V., & Zhang, Y. (2014a). Is there a relation

between audit fee cuts during the global financial

crisis and banks’ financial reporting quality? Journal

of Accounting and Public Policy, 33(3), 279–300.

https://doi.org/10.1016/j.jaccpubpol.2014.02.004

Mahdi Sahi et al., Cogent Business & Management (2022), 9: 2135210

https://doi.org/10.1080/23311975.2022.2135210

Page 15 of 17

Krishnan, G. V., & Zhang, Y. (2014b). Is there a relation

between audit fee cuts during the global financial

crisis and banks’ financial reporting quality? Journal

of Accounting and Public Policy, 33(3), 279–300.

https://doi.org/10.1016/j.jaccpubpol.2014.02.004

Lee, B. B., & Seo, S. D. (2010). Reforms in the Korean

financial reporting systems and earnings quality.

Asia-Pacific Financial Markets, 17(1), 51–61. https://

doi.org/10.1007/s10690-009-9101-9

Lefanowicz, C. E., & Mclelland, M. J. (2002). Optimal

financial reporting and equity returns: Evidence from

commercial banks. Review of Accounting and

Finance, 1(1), 25–38. https://doi.org/10.1108/

eb026977

Linciano, N., Lucarelli, C., Gentile, M., & Soccorso, P.

(2018). How financial information disclosure affects

risk perception. Evidence from Italian investors’

behaviour. European Journal of Finance, 24(15),

1311–1332. https://doi.org/10.1080/1351847X.2017.

1414069

Madugba, J. U., Howell, K. E., Nwanji, T. I., Faye, S.,

Egbide, B. C., & Eluyela, D. F. (2021). Audit committee

quality and financial reporting in deposit money

banks in Nigeria. Asian Economic and Financial

Review, 11(2), 104–117. https://doi.org/10.18488/

journal.aefr.2021.112.104.117

Massaro, M., Dumay, J., & Guthrie, J. (2016). On the

shoulders of giants: Undertaking a structured litera-

ture review in accounting. Accounting, Auditing &

Accountability Journal, 29(5), 767–801. https://doi.

org/10.1108/AAAJ-01-2015-1939

Mnif, Y., & Znazen, O. (2020). Corporate governance and

compliance with IFRS 7: The case of financial insti-

tutions listed in Canada. Managerial Auditing Journal,

35(3), 448–474. https://doi.org/10.1108/MAJ-08-

2018-1969

Mohsin, M., Nurunnabi, M., Zhang, J., Sun, H., Iqbal, N.,

Iram, R., & Abbas, Q. (2021). The evaluation of effi-

ciency and value addition of IFRS endorsement

towards earnings timeliness disclosure. International

Journal of Finance and Economics, 26(2), 1793–1807.

https://doi.org/10.1002/ijfe.1878

Musleh Al-Sartawi, A. M. A. (2018). Online financial dis-

closure, board characteristics and performance of

Islamic banks. Journal of Economic Cooperation and

Development, 39(3), 93–114. https://jecd.sesric.org/

pdf.php?file=ART16101801-2.pdf

Naaman, C., Naaman, K., & Sahyoun, N. (2021). Disclaimer

language in US banks’ audit committee reports:

Determinants and consequences. Meditari

Accountancy Research. https://doi.org/10.1108/

MEDAR-04-2021-1259

Nahar, S., Azim, M., & Jubb, C. A. (2016). Risk disclosure,

cost of capital and bank performance. International

Journal of Accounting and Information Management,

24(4), 476–494. https://doi.org/10.1108/IJAIM-02-

2016-0016

Nnadi, M., & Soobaroyen, T. (2015). International financial

reporting standards and foreign direct investment:

The case of Africa. Advances in Accounting, 31(2),

228–238. https://doi.org/10.1016/j.adiac.2015.09.007

Oberson, R. (2021). The credit-risk relevance of loan

impairments under IFRS 9 for CDS pricing: Early

evidence. European Accounting Review, 30(5),

959–987. https://doi.org/10.1080/09638180.2021.

1956985

Osemene, O. F., Adinnu, P., Fagbemi, T. O., &

Olowookere, J. K. (2021). Corporate governance and

environmental accounting reporting in selected

quoted African companies. Global Business Review,

097215092110109. https://doi.org/10.1177/

09721509211010989

Palea, V., & Scagnelli, S. D. (2017). Earnings reported

under IFRS improve the prediction of future cash

flows? Evidence from European banks. Australian

Accounting Review, 27(2), 129–145. https://doi.org/

10.1111/auar.12115

Pinnuck, M. (2012). A review of the role of financial

reporting in the global financial crisis. Australian

Accounting Review, 22(1), 1–14. https://doi.org/10.

1111/j.1835-2561.2011.00155.x

Rodrigues, M., Alves, M. D. C., Oliveira, C., Vale, V., Vale, J.,

& Silva, R. (2021). Dissemination of social accounting

information: A bibliometric review. Economies, 9(1),

1–25. https://doi.org/10.3390/economies9010041

Rodríguez-Pérez, G., Slof, J., Solà, M., Torrent, M., &

Vilardell, I. (2011). Assessing the impact of Fair-Value

accounting on financial statement analysis: A data

envelopment analysis approach. Abacus, 47(1),

61–84. https://doi.org/10.1111/j.1467-6281.2011.

00331.x

Sahi, A. M., Khalid, H., & Abbas, A. F. (2021). Digital pay-

ment adoption: A review (2015-2020). Journal of

Management Information and Decision Sciences, 24

(7), 1–9. https://www.abacademies.org/articles/digi

tal-payment-adoption-a-review-20152020-11798.

html

Sahi, A. M., Khalid, H., Abbas, A. F., & Khatib, S. F. A. (2021).

The evolving research of customer adoption of digital

payment : Learning from content and statistical

analysis of the literature. J. Open Innov. Technol.

Mark. Complex, 1–25. https://doi.org/10.3390/

joitmc7040230

Sahi, Khalid, H., Abbas, A. F., Zedan, K., & Khatib, S. F. A.

(2022). The research trend of security and privacy in

digital payment. Informatics, 9(32). https://doi.org/

10.3390/informatics9020032

Salem, R. I. A., Ezeani, E., Gerged, A. M., Usman, M., &

Alqatamin, R. M. (2021). Does the quality of voluntary

disclosure constrain earnings management in emer-

ging economies? Evidence from Middle Eastern and

North African banks. International Journal of

Accounting and Information Management, 29(1),

91–126. https://doi.org/10.1108/IJAIM-07-2020-0109

Sarea, A. M., Khalid, A., Shamsuddin, A. B., Hawaldar, I., &

Hossen, Z. (2021). Online financial reporting disclo-

sure in Islamic banking: Evidence from Bahrain.

International Journal of Economics and Business

Research, 22(4), 311. https://doi.org/10.1504/IJEBR.

2021.118378

Setiyawati, H., & Doktoralina, C. M. (2019). The impor-

tance of quality accounting information manage-

ment in regional governments in Indonesia.

Management Science Letters, 9(12), 2083–2092.

https://doi.org/10.5267/j.msl.2019.6.025

Shil, N. C., & Chowdhury, S. S. (2012). An assessment of

firm characteristics on financial disclosure: Insurance

industry in Bangladesh. International Journal of

Managerial and Financial Accounting, 4(3), 215–237.

https://doi.org/10.1504/IJMFA.2012.047850

Stocken, P. C. (2012). Strategic accounting disclosure.

Foundations and Trends in Accounting, 7(4), 197–291.

http://dx.doi.org/10.1561/1400000027

Tadesse, S. (2006). The economic value of regulated dis-

closure: Evidence from the banking sector. Journal of

Accounting and Public Policy, 25(1), 32–70. https://

doi.org/10.1016/j.jaccpubpol.2005.11.002

Tsalavoutas, I., Tsoligkas, F., & Evans, L. (2020). Compliance

with IFRS mandatory disclosure requirements :

A structured literature review. Journal of International

Mahdi Sahi et al., Cogent Business & Management (2022), 9: 2135210

https://doi.org/10.1080/23311975.2022.2135210

Page 16 of 17

Accounting, Auditing and Taxation, 40, 100338. https://

doi.org/10.1016/j.intaccaudtax.2020.100338

Uzoma, A. B., Olokoyo, F. O., Babajide, A. A., Folashade, O.,

& Dorcas, A. (2016). Adoption of international finan-

cial reporting standards and its implication on bank

performance in Nigeria: A comparative approach.

Journal of Internet Banking and Commerce, 21(5).

Velayutham, A., Rahman, A. R., Narayan, A., & Wang, M.

(2021). Pandemic turned into pandemonium: The

effect on supply chains and the role of accounting

information. Accounting, Auditing and Accountability

Journal, 34(6), 1404–1415. https://doi.org/10.1108/

AAAJ-08-2020-4800

Waris, Ali, Rizwan, Muhammad. (2013). Factors influen-

cing corporate social and environmental disclosure

(CSED) practices in the developing countries : An

institutional theoretical perspective. International

journal of asian social science, 3(3), 590–609. https://

archive.aessweb.com/index.php/5007/article/view/

2442

Yamani, A., Hussainey, K., & Albitar, K. (2021). The impact

of financial instruments disclosures on the cost of

equity capital. International Journal of Accounting

and Information Management, 29(4), 528–551.

https://doi.org/10.1108/IJAIM-02-2021-0052

Zamil, I. A., Ramakrishnan, S., Jamal, N. M., Hatif, M. A., &

Khatib, S. F. A. (2021) Drivers of corporate voluntary

disclosure: A systematic review. Journal of Financial

Reporting and Accounting. ahead of p(ahead of print

https://doi.org/10.1108/JFRA-04-2021-0110.

You are free to:

Share — copy and redistribute the material in any medium or format.

Adapt — remix, transform, and build upon the material for any purpose, even commercially.

The licensor cannot revoke these freedoms as long as you follow the license terms.

Under the following terms:

Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made.

You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.

No additional restrictions

You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.

Cogent Business & Management (ISSN: 2331-1975) is published by Cogent OA, part of Taylor & Francis Group.

Publishing with Cogent OA ensures:

• Immediate, universal access to your article on publication

• High visibility and discoverability via the Cogent OA website as well as Taylor & Francis Online

• Download and citation statistics for your article

• Rapid online publication

• Input from, and dialog with, expert editors and editorial boards

• Retention of full copyright of your article

• Guaranteed legacy preservation of your article

• Discounts and waivers for authors in developing regions

Submit your manuscript to a Cogent OA journal at www.CogentOA.com

Mahdi Sahi et al., Cogent Business & Management (2022), 9: 2135210

https://doi.org/10.1080/23311975.2022.2135210

Page 17 of 17