Corporate Governance and Provisions Under IAS 37

Aim of this study is to illustrate the extent of disclosure of provisions reported under IAS 37 Provisions, Contingent Liabilities and Contingent Assets and explore the relation between provisions and corporate governance. Current research utilizes a panel data analysis using a sample of 1078 firm-year observations from Borsa Istanbul (BIST) between the years 2005-2010. Overall findings indicate that, 62% of 1078 firm-year observations recognize provisions; and among those only 32% provide IAS 37's full disclosure requirements. Firms that recognize provisions have larger board of directors and are more likely to be characterized with concentrated ownership and institutional owners. Also, firms with larger board of directors, greater independence and concentrated ownership have higher Total Provision/Total Debt ratios. Finally, firms that make full disclosure of provisions are more likely to have larger boards, higher ownership concentration and institutional owners and less likely to have CEO duality