Journal of Accounting and Management Information Systems (JAMIS)

Corporate governance, audit committee and the internet reporting of strategic information by UAE non-financial listed firms

Vol. 14, Nr. 3/2015 ,   508-545

Mostafa Kamal Hassan

Keywords:   audit committee, governance, agency theory, innovation diffusion theory, online reporting, “strategy” disclosure, UAE


The study examines the effect of internalgovernance mechanisms on the Internet Reporting of Strategic Information (IRSI)in an emerging market economy, the United Arab Emirates (UAE) It relies on theagency theory and the innovation diffusion theory to generate testablehypotheses and augment the explanation behind the empirical results. The studyapplies a multiple regression on a sample of 37 non-financial firms listed onAbu Dhabi and Dubai financial markets to test the association between auditcommittee, independent non-executive directors, frequency of board meetings,type of external auditor and IRSI while controlling for firm size, level ofrisk, firm complexity and firm profitability. The empirical findings show thatIRSI is positively and significantly associated with audit committee quality,firm size, level of risk and firm complexity. The findings also show that IRSIis negatively and significantly correlated with the frequency of board ofdirectors meetings. These empirical findings assist UAE regulators andinternational business community with insights concerned with governance-IRSIrelationship. The findings also reveal that board directors and members inaudit committee may contribute to the diffusion of innovative disclosurepractices such as IRSI. The study is one of few studies that combine the agencytheory and innovation diffusion theory to examine the relationship betweeninternal governance mechanisms, particularly audit committee, and the IRSI inan emerging market economy such as the UAE.