Analysis of the Extent of Corporate Voluntary Disclosure in Saudi Arabia before and after IFRS Adoption

This study aims to assess and analyze the extent of corporate voluntary disclosure (VD) in the annual reports of companies listed on the Saudi Arabian Stock Exchange, and to compare the VD levels before and after the implementation of International Financial Reporting Standards (IFRS). By applying content analysis and using a self-constructed index, the study has measured the extent of six VD categories in 240 annual reports from 2015 and 2017 that represent 120 listed non-financial companies. Descriptive statistics were calculated to analyze the sample's VD extent. Wilcoxon and Friedman ranking tests were applied to investigate any statistically significant changes in VD between these two years. The results show that the average VD in Saudi Arabia is 32.5%. However, the average disclosure differs across various VD categories ranging from 12.8% to 56.2%. Additionally, there is a statistically significant increase in the average VD and all its categories from 2015 to 2017. However, the level of VD in Saudi Arabia is still low compared to developed countries. Saudi Arabia's Capital Market Authority (CMA) should enforce listed companies to produce separate sustainability reports. This may help to enhance the level of VD among listed companies. This study is the first to investigate and compare the extent of various categories of VD in Saudi Arabia before and after the implementation of IFRS. As such, the study contributes to our knowledge on this subject by providing recent and up-to-date data about VD after many legislative and regulatory changes have taken place in Saudi Arabia