THE ACCOUNTING PROFESSIONALS’ PERCEPTIONS · PDF fileTHE ACCOUNTING PROFESSIONALS ... international accounting standards that are used for ... 16 30 66 112 76.79 23.21. 100.0 1.79

March. 2014. Vol. 3, No.7 ISSN 2307-227X

International Journal of Research In Social Sciences © 2013-2014 IJRSS & K.A.J. All rights reserved www.ijsk.org/ijrss

8

THE ACCOUNTING PROFESSIONALS’ PERCEPTIONS ON

COMPLIANCE DISCLOSURES WITH IFRS/IAS IN ZIMBABWE

Mbetu, Katazo Cecil

1, Marume, Samson

2, Srinivasan K(Dr)

3

Midlands State University, P Bag 9055, Gweru ZIMBABWE1

Christ College, 66 Avondale, Harare. ZIMBABWE2

Christ University, Bangalore. INDIA3

Email: [email protected] & [email protected]

Abstract

The study investigates the Accounting Professionals perception/views towards compliance disclosures of

IFRS/IAS in Zimbabwe. A sample of 226 Registered Accounting Professionals was selected. A questionnaire

was administered. One hundred and twelve (112) responses were received. The bivariate and multivariate

analyses were employed. Findings to the analysed data dealt with compliance disclosure requirements of listed

companies in Zimbabwe, voluntary disclosures, factors influencing the extent of disclosures and consequences

of non disclosure of information in accordance with IFRS/IAS.

Key words; compliance, disclosure, IFRS/IAS

1.1 INTRODUCTION

Globalisation demands that countries must

understand each other country’s accounting

principles (Sharpe 1994:4). In year 1977, some

accounting professionals in Zimbabwe foresaw the

globalization of economic activity which demands

high quality internationally comparable financial

information. The increase in cross border

investment transactions require high quality

international accounting standards that are used for

financial reporting internationally.

In Zimbabwe the accountancy profession as

represented by the PAAB, realized the importance

of adopting international recognized accounting

standards and in 1977, a national body to develop

national accounting standards, the Zimbabwe

Accounting Standards Board (ZAPB), was set up.

The Board resolved to adopt the International

Financial Reporting Standards as set from time to

time by the various boards of the International

Federation of Accountants (IFAC). Zimbabwe

subsequently became the first country in Africa to

adopt for use the International Financial Reporting

Standards/International Accounting Standards

(IFRS/IAS). The regulator of the profession in

Zimbabwe, believe that convergence to

International accounting and auditing standards is

important to economic growth and development.

Even with this hindsight questions are still being

raised by other accounting professionals why adopt

IFRS/IAS and not use national accounting

standards. This paper seeks to highlight the

perception/views of accounting professionals on

compliance disclosures requirements of IFRS/IAS.

1.2 OBJECTIVES OF THE STUDY

The objective of this study is to:

i. empirically determine the extent of

compliance of the listed financial and non-

financial Zimbabwe companies with the

disclosure requirements of IFRSs;

ii. examine whether the listed financial and

non-financial companies in Zimbabwe are

providing more information than statutorily

required in their annual financial reports;

iii. determine the factors influencing the extent

of information disclosure in the annual

reports of listed companies in Zimbabwe;

and

iv. identify the opinion of accounting

professionals on the disclosure practices of

listed companies in Zimbabwe and on

consequences of non-disclosure of relevant

accounting information.

1.3 LITERATURE REVIEW

Literature conducted on statutory and voluntary

compliance disclosures with IFRS/IAS include:

Owusu-Ansah and Yeoh(2005),Wallace and Nasser

(1995),Al Shammari (2005), Al Shammari, Brown

and Tarca (2008), Akra, Eddie and Ali (2010),

Chau and Gray (2002), Naser et al (2002), Street

http://www.ijsk.org/



9

and Gray (2001), Gray et al (2001), Tower et al

(1999), Owusu-Ansah (1998), Meek et al (1994)

Wallace et al (1994) and Peng and Bewley (2010).

Literature reviewed on disclosure compliance level

and company size includes Owusu-Ansah and

Yeoh (2005), Gabbi, Tanzi and Nadott (2011),

Wallace and Nasser (1995), Tower et all (1999)

and Nasser et al (2002) who postulate that small

firms provide less information as compared to big

firms.

Literature reviewed on profitability and level of

compliance disclosures include Al Shammari

(2011), Wallace and Nasser (1995), Al Shammari

(2008) and Meek et al (1995) who indicate that

profitable entities provide more information as a

way of attracting capital.

Literature reviewed on Leverage include Owusu-

Ansah (2005), AL Shammari (2011), (2008),

(2005) and Naser et al (2002) who suggest that

high geared firms tend to disclose more

information in order to assure creditors that they

will honour their liabilities when due.

Literature reviewed on company age include

Owusu-Ansah and Yeoh (2005), Al Shammari

(2011), (2008), (2005), and Owusu-Ansah (1998)

who think that new companies are secretive about

the information they disclosure for fear of

competition.

Literature reviewed on industry type include AL

Shammari (2011), Owusu-Ansah (1998), Tower et

al (1999) and Chaw and Gray (2002) who conclude

that the type of industry play an important part on

how much information is disclosed.

Literature reviewed on auditors include Wallace

and Naser (1995), Naser et al (200), Al Shammari

(2011) and Chaw and Gray (2002) who argue that

companies prefer audit firms with international

affiliations..

Literature reviewed on geographical spread include

Owusu-Ansah (1998), Al Shammari (2011) Meek

et el (1995) who indicate that geographical spread

influences the extent of information disclosures.

Literature reviewed on liquidity include Owusu-

Ansah (2005) and Al Shammari (2011)who

contend that there is a positive and significant

association between liquidity and compliance

disclosures.

Literature reviewed on ownership structure include

Al Shammari (2011) and Owusu-Ansah and Yeoh

(2005) who indicate that the association between

ownership structure and disclosure compliance is

insignificant.

1.4 METHODOLOGY

The population for the study consists of

accountants, auditors and accounting educators and

other accounting information users in Zimbabwe.

A population of 2263 registered public accounting

professionals as at 28 February 2013 was relevant.

The population has the ability to identify, prepare,

understand, interpret, communicate and use

financial statements. The study used a sample in

order to get an in depth study and adequate

coverage of the subject under investigation. A

sample size of 10% was chosen (Babbie 1989:67-

70) representing 226 participants. Out of the 226

selected, 112 questionnaires were responded to

representing a 49.56% response rate. Primary data

was collected through the administration of

questionnaires to the accountants, auditors and

accounting educators and others who were

attending an IFRS-ISA Implementation review

seminar. The questionnaire aimed at getting

responses that are likely to confirm if listed

companies in Zimbabwe comply with disclosure

requirements of IFRS/IAS and if they voluntarily

disclose any other relevant information. It also

sought responses on factors influencing the extent

of disclosure and the consequences of non-

compliance with IFRS/IAS disclosure

requirements. The bivariate and multivariate

analyses are employed for the collected data. The

hypothesis test used the multivariate analysis of

variance (MANOVA). SPSS 16 package, 2007

Version was used to analyse data quantitatively.

1.5 DISCUSSION AND RESULTS

This paper discusses and presents results of

primary data obtained by the researcher through the

administration of a questionnaire. It includes data

on compliance of listed companies with the

disclosure requirement of the accounting standards,

voluntary disclosures, factors influencing the extent

of disclosure and consequences of non-disclosure

of info




10

Table 1: Response to Questionnaire

Frequency Percent

Cumulative

Percent

Responses 112 49.56 49.56

Non

Responses 114 50.44 100.0

Total 226 100.0

Field Survey, 2013

Table 1 highlights that out of 226 questionnaires

administered, 112 were responded to and 114 were

not returned or not responded to. This means that

the analysis of primary data is based on 49.56%

rate of response.

1.5.1PERSONAL BIODATA Table 2 above presents the data on the personal characteristics of the respondents.

Table 2: Personal Biodata of Respondents

Variable Frequency Percentage Cum %

2. Gender:

Male

Female

Total

3. Highest Academic

Qualification:

HND

Bachelor’s Degree

Master’s degree

PhD

Total

4. Professional Qualification:

SAAA

ACCA/FCCA

CPA[Z]

ICAZ

ICSAZ

CIMA

Others

Total

5. Occupation:

Accountant

Auditor

Accounting Educators/others

Total

6. Work Experience:

1-5 years

6-10years

Above 10years

Total

86

26

112

2

66

40

4

112

4

34

14

24

26

4

8

114

44

50

18

112

16

30

66

112

76.79

23.21.

100.0

1.79

58.93

35.71

3.57

100.0

3.51

29.82

12.28

21.05

22.81

3.51

7.02

100.0

39.29

44.64

16.07

100.0

14.29

26.79

54.63

100

76.79

100.0

1.79

60.72

96.43

100.0

3.51

33.33

45.61

66,66

89.47

92.98

100.0

39.29

83.93

100. 00

14.29

41.08

100.00

Source: Field Survey, 2013




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The breakdown of the gender reveals that 86

(76.79%) respondents constitute the male gender,

while 26 (23.21%) constitute the female gender.

There is a dominance of the male gender which is

attributable to the fact

that in the accounting profession the males

outnumbered the females. The female minority

status is based on gender-based differences such as

‘glass ceiling’, networking and work/life family

balance.

The bulk of respondents with the highest

educational qualifications are 66 (58.93%) who

have Bachelor’s degrees. Those with HND are 2

(1.79%), Master’s degrees are 40 (35.71%) and

PhD’s are 4 (3.57%). For the professional

qualifications, 100% of the respondents indicated

their professional status. Out of these, 4 have

SAAA, 34 have ACCA/FCCA, 14 have both

CPAZ, 24 have ICAZ, 26 have ICSAZ,4 CIMA

while 8 have other qualification such as Zambian

Institute of Chartered Accountants(ZICA), Institute

of Certified Bookkeepers and (ICB) and Institute of

Taxation of Zimbabwe(ICTAZ). The recognised

professional accounting and auditors qualifications

in Zimbabwe are: Southern African Association of

Accountants, Association of Certified Chartered

Accountants, Certified Public Accountants of

Zimbabwe, Institute of Chartered Secretaries and

Administrators of Zimbabwe, Institute of Chartered

Accountants of Zimbabwe and the Chartered

Institute of Management Accountants. The data on

educational and professional qualifications indicate

that most of the respondents have either first or

both first and second degrees and are professionally

competent. They are able to understand the content

of the questionnaire and express unbiased opinion.

Occupation analysis indicated that auditors’

number 50, which is 44.64% of the total sample.

Out of the remaining 62 respondents, accountants

are 44 (39.29%), accounting educators/others are

18 (16.07%).

The work experience data as presented in Table 2

above reveals that the majority of the respondents

are in the experience bracket of above ten (10)

years constituting 54.63% of the total sample. The

respondents with 6 to 10 years of experience

represent 26.79% while those with 1 to 5 years of

experience are 14.29%. The analysis indicates that

the respondents have considerable experience in

their fields that will enable them to have a good

knowledge of disclosure practices of listed

companies.

The next sub-sections of the questionnaire present

the data in which the responses are labelled: SA

(Strongly Agree), A (Agree), D (Disagree), SD

(Strongly Disagree). The weighted sample is the

expected responses less the missing responses. The

weighted average mean (M) and the standard

deviation (SD) of each question are also calculated.

1.5.2 COMPLIANCE WITH DISCLOSURE

REQUIREMENTS OF IFRSS/IAS

Table 3 below depicts the responses to items 7 to 13 of the

questionnaire arranged in a serial manner. These relate to the

extent of compliance of financial and non- financial

Zimbabwean companies with IFRS/IAS disclosure

requirements.

All respondents answered item 7. The analysis reveals that 4

or 3.57% of the total sample strongly disagree that listed

financial companies in Zimbabwe fully comply with the

disclosure requirements of the IFRSs, 20 or 17.86% disagree,

74 or 66.07% agree, while 14 or 12.5% strongly agree with

the weighted average mean of 28 and a standard deviation of

31.37.

Item 8 has a response rate of 96.43% out of the total sample

of 112. Out of these responses, 2 (1.79%) strongly disagree

that listed non-financial companies in Zimbabwe fully

comply with the disclosure requirements of the local IFRSs,

60 (53.57%) disagree, 36 (32.14%) agree, while 10 (8.93%)

strongly agree. The weighted arithmetic mean is 27 with

standard deviation of 26.36. The disparity of responses to

question 7 and 8 indicates that the respondents are of the

opinion that the financial companies comply more than the

non-financial companies with the disclosure requirements of

the IFRSs. This further suggests that due to the reform,

regulation and competition in the financial sector, the sector

maintains a higher level of information disclosure than the

other sectors.




12

Table 3: Distribution of Responses on Compliance with Disclosure requirements of Accounting Standards

SD

D

A

SA

Weighted

Sample

Mean

SD

7. In practice, listed financial

companies in Zimbabwe fully comply

with the disclosure requirements of the

IFRS/IAS.

4

3.57%

20

17.86%

74

66.07%

14

12.5%

112

100%

28 31.37.

8. In practice, all companies in

Zimbabwe fully comply with the

disclosure requirements of the

IFRS/IAS.

2

1.79%

60

53.57%

36

32.14%

10

8.93%

108

96.43%

27 26.36

9. Relevant IAS/IFRS are fully applied

by listed financial companies.

0

0%

34

30.36%

68

60.71%

10

8.93%

112

100%

28 30.24.

10. Relevant IAS/IFRS are fully

applied by listed non -financial

companies.

4

3.57%

32

28.57%

64

57.14%

12

10.71

%

112

100%

28 26.73

11. Listed companies with

multinational affiliation fully apply

IAS/IFRS.

0

0%

20

17.86%

66

58.93%

26

23.21

%

112

100%

28 27.66

Source: Field Study (2013)

From the analysis of item 9 above, majority of the

respondents, 68 or 60.71% are affirmative that listed

financial companies usually apply relevant IASs/IFRSs.

Those that disagree and strongly disagree are 30.36% and

0% respectively. Thus with the weighted average mean of

28 and the standard deviation of 30.24 we can confirm that

the respondents agree that listed financial companies

usually apply relevant IFRSs/IASs.

Relating to item 10, analysis reveals that 56.5% are

affirmative that listed non-financial companies usually

apply relevant IASs/IFRSs. Thirty two point fourteen

percent disagree or strongly disagree, with a weighted

average mean of 28 and a standard deviation 26.73. The

variance between the mean of items 9 and 10 confirm the

opinion that listed financial companies usually apply

relevant IFRSs/IASs than the non-financial companies.

Due to the strict regulation on the financial sector and

intense competition brought about by the reforms in the

financial sector they incorporate the relevant international

disclosures more than other sectors.

With regards to item 11, 58.93% or 66 respondents agree

to the statement that listed companies with geographical

(multinational) affiliation fully apply IASs/IFRSs. Twenty

six (23.21%) strongly agree, 20 (17.86%) disagree, zero

(0%) strongly disagree. The weighted arithmetic mean is

28 and the standard deviation is 27.66. It is evident that

multinational organizations in Zimbabwe prepare financial

statements with international standards for their foreign

parent.




13

1.5.3 VOLUNTARY DISCLOSURES BY LISTED COMPANIES.

Table 4 presents the results for items 12 to 16 on voluntary disclosures. It provides answers to the question of

whether listed financial companies provide more than the statutory information voluntarily.

Table 4: Distribution of Responses on Voluntary Disclosures

SD

D

A

SA

Weighted

Sample

Mean

SD

12. Quantitative forecast of

performance for the next accounting

year is voluntarily disclosed by listed

companies.

4

3.57%

60

53.57%

46

41.07%

2

1.79%

112

100%

28 29.44

13. Corporate social responsibility

information is voluntarily disclosed

by listed companies.

2

1.79%

38

33.93%

60

53.57%

10

8.93%

110

98.21%

27.5

26.60

14. Corporate governance



4

3.57%

28

25.00%

70

62.50%

8

7.14%

110

98.21%

27.5 30.22

15. Environmental liabilities and cost



6

5.36%

66

58.93%

38

33.93%

2

1.79%

112

100.%

28 30.02

16. Risk management information is

voluntarily disclosed by listed

companies.

2

1.79%

36

32.14%

66

58.93%

6

5.36%

110

98.21%

27.5 29.82


The responses on Item 12 shows the following

responses: 46 (41.07%) respondents agree that

Listed companies voluntarily disclose the

quantitative forecast of performance for the next

accounting year 1.79% strongly agree, 53.57%

disagree while 3.57% strongly disagree. The

cumulative percentage of respondents that disagree

and strongly disagree is 57.14%. The weighted

average mean is 28 while the standard deviation is

29.44. This suggests that the respondents opined

that on the average listed companies do not

voluntarily disclose the quantitative forecast of

performance for the next accounting year.

The result of item 13 as shown reveals that 110

(98.21%) responded to this question. Sixty

(53.57%) respondents agree that corporate social

responsibility information is voluntarily disclosed

by listed companies. Ten (8.93%) strongly agree,

38 (33.93%) disagree while 2 (1.79%) strongly

disagreed. The mean is computed to be 27.5 while

the standard deviation is 26.60. This confirms that

majority of the respondents agree to the fact that

information on corporate social responsibility such

as donations and employee health, safety and

welfare is voluntarily disclosed by listed

companies.

The response to item 14 is as reported in Table 4.

Of the total sample of 110, seventy (62.5%) agree

that listed companies in Zimbabwe voluntarily

disclose corporate governance information in their

financial reports. The number of respondents that

strongly agree, disagree and strongly disagree are 8

(7.14%), 28 (25%) and 4 (3.57%) respectively. The

weighted arithmetic mean of 27.5 and standard

deviation of 30.22 confirms that the respondents

moderately agree that listed companies disclose

corporate governance information in their financial

statements.

Responses to item 15 relating to voluntary

environmental liabilities and cost information

featured a contrary view from those earlier

discussed. It is observed that 66 (58.93%)

disagreed while 6 (5.36%) strongly disagreed. The

respondents with positive view are 38 (33.93%)

and 2 (1.79%). This reveals that more respondents

were negative about this fact. This is also

confirmed by the 28 mean and 30.22 standard




14

deviation. The result of this analysis suggests that

information on environmental liabilities and costs

are hardly disclosed in the financial statements of

listed companies.

The result obtained in item 16 shows that 110 out

of 112 responded to this question. Their responses

are varied. 6 (5.36%) strongly agree, 66 (58.93%)

agree, 2 (1.79%) and 36 (32.14%) disagree.

Cumulatively 64.29% are affirmative. With the

arithmetic mean of 27.5 and standard deviation of

29.82, it can be suggested that the respondents

moderately agree to the fact that risk management

information is voluntarily disclosed by listed

companies.

1.5.4 FACTORS INFLUENCING THE EXTENT OF DISCLOSURES BY LISTED COMPANIES.

Table 5 captures items 17 to 25 of the questionnaire on the financial and non-financial factors influencing the

extent of disclosure by listed companies.

Table 5: Distribution of Responses on Factors Influencing the Extent of Disclosure by Listed Companies.

SD

D

A

SA

Weighted

Sample

M

SD

17. Company

Size

2

1.79%

20

17.86%

70

62.50%

18

16.07%

110

98.21%

27.5 29.46

18.

Profitability

2

1.79%

36

32.14%

58

51.79%

14

12.50%

110

98.21%

27.5 24.73

19. Leverage 4

3.57%

52

46.43%

46

41.07%

6

5.36%

108

96.43%

27.0 25.53

20. Company

Age.

4

3.57%

64

57.14%

40

35.71%

2

1.79%

110

98.21%

27.5 29.95

21. Industry

Type

2

1.79%

36

32.14%

62

55.36%

10

8.93%

110

98.21%

27.5 27.20

22. Size of

Audit firm

6

5.36%

38

33.93%

52

46.43%

16

14.29%

112

100%

28.0 20.85

23.

Geographical

Spread

2

1.79%

54

48.21%

46

41.07%

8

7.14%

110

98.21%

27.5 26.30

24. Liquidity 4

3.57%

52

46.43%

54

48.21%

2

1.79%

112

100%

28.0 28.89

25. Ownership

Structure

2

1.79%

24

21.43%

64

57.14%

18

16.07%

108

96.43%

27.0 26.36

Field Study (2013)

Item 17 addresses the Company Size (Table 5).

Eighty eight respondents (78.57%) were

affirmative that company size influences the extent

of disclosure by listed companies which far

supersedes the combined percentage of those that

disagree and strongly disagree (19.64%).The

weighted arithmetic mean is observed to be 27.5,

while the standard deviation is 29.46.This shows




15

that company size is highly considered by majority

of the respondents to influence the extent of

information disclosure by listed companies.

Profitability is considered in item 18 (Table 5).

There is a considerable agreement to the fact that it

influences the extent of disclosure by listed

companies. 58 or 51.79% agrees, 14 or 12.5%

strongly agree, 36 or 32.14% disagree while 2 or

1.79% strongly disagrees. The arithmetic mean is

observed to be 27.5 while the standard deviation is

24.73. This result confirms that profitability is

agreed to be a factor that is responsible for the

extent of disclosure in listed Zimbabwe companies.

Responses on Leverage (item 19) as shown on the

above table reveal that 96.43% responded to this

question. The responses are: strongly agree 6

(5.36%), agree 46 (41.07%), disagree 52 (46.43%)

and strongly disagree 4 (3.57%). The weighted

arithmetic mean is 27 with a standard deviation of

25.53. This result confirms that the respondents

marginally disagree that leverage is a factor that

influences the extent of disclosure in listed

companies.

Item 20 addresses company age (Table 5).

Although the results are varied, it can be seen that

only 98.21% responded to this question. 35.71% of

the respondents agree to the fact that company age

is a determining factor for compliance, 57.14%

disagreed with this fact. 1.79% and 3.57% strongly

agree and strongly disagree with this fact. The

arithmetic mean is 27.5 while the standard

deviation is 29.95. With this result, it is suggested

that company age is not a factor that influences the

level of disclosure of listed companies.

The results from Table 5 above show that 55.36%

of the respondents agree that industry type

influences the extent of information disclosure by

listed companies, 8.93% strongly agree, 32.14%

disagree, 1.79% strongly disagree and 4.6% give

no response. With a weighted arithmetic mean of

27.5 and a standard deviation of 27.20, it confirms

the agreement that industry type is an influencing

factor.

The size of audit firm is addressed by item 22

(Table 5). The analysis of the result as stated on the

table above indicates that out of the total sample of

112, 100% responded to the question. The results

show that 52 (46.53)% of the respondents agree

with the notion that size of audit firm influences the

extent of information disclosed by Zimbabwean

listed companies, 14.29% strongly agree with this,

33.93% disagree with this , and 5.36% strongly

disagree. This emphasises that a cumulative

percentage of those that concur is higher, that is

60.82%. With a computed arithmetic mean of 28

and standard deviation of 20.85, the result further

suggests that there is a moderate agreement to the

opinion that size of audit firm is an influencing

factor.

Item 23 addresses geographical/multinational

affiliation (Table 5). The data presented above

shows that response rate is 98.21%. 48.31% assent

to the fact that geographical affiliation influences

the extent of disclosure by listed companies, while

50% do not and 1.79% did not express an opinion.

The distribution is strongly agree 7.14%, agree

41.07%, disagree 48.21% and strongly disagree is

1.79%. The arithmetic mean is computed to be 27.5

while the standard deviation is 26.30. This result

shows that majority of the respondents disagree

that geographical affiliation influences the extent of

disclosure by listed companies.

The results as presented in Table 5 above relating

to item 24, show that 48.21% respondents agree,

1.79% strongly agree to the fact that liquidity is a

factor that influences the extent of disclosure.

Another 46.43% disagree and 3.57% strongly

disagree. It is evident from this that the

respondents are split in the middle as to whether

liquidity is a factor that influences the extent of

disclosure. This is also confirmed by the arithmetic

mean of 28 and standard deviation of 28.89.

Item 25 reveals that 57.14% (64) of the respondents

agree that ownership structure influences the extent

of disclosures by Zimbabwean listed companies.

16.07% (18) of the respondents strongly agree with

this fact, but the others who constitute 21.43%

disagree, 1.79% strongly disagree that ownership

structure influences the extent of disclosure by

listed companies. The result suggests that

ownership structure might not be an influencing

factor.




16

1.5.5 CONSEQUENCES OF NON-COMPLIANCE WITH DISCLOSURE REQUIREMENTS OF THE

ACCOUNTING STANDARDS

Table 6: features the distribution of responses to items 26 to 30 in a serial manner. This provides answers on the

consequences of non- disclosure of relevant accounting information.

Table 6: Distribution of Responses on Consequences of Non-compliance with Disclosure Requirements of

the Accounting Standards

SD

D

A

SA

Weighted

Sample

Mean

SD

26. Failure of some Zimbabwean

listed companies is due to partial or

non-disclosure of relevant accounting

information.

6

5.36%

40

35.71%

54

48.21%

8

7.14%

108

96.43%

27 23.80

27. Partial or non-disclosure of

relevant accounting information

impedes investors’ decisions.

2

1.79%

2

1.79%

56

50%

48

42.86

%

108

96.43%

27 29.05

28. Ensuring full disclosure of relevant

accounting standards circumvents

fraud.

12

10.71%

28

25.00%

60

53.57%

8

7.14%

108

96.43%

27 23.64


relevant accounting information limits

prudent allocation of resources.

0

0%

18

16.07%

68

60.71%

24

21.43

%

110

98.21%

27.5 28.86


relevant accounting information

erodes investors' confidence.

0

0%

2

1.79%

54

48.21%

54

48.21

%

110

98.21%

27.5 30.61


The data collected in respect of item 26 as narrated

in Table 6 above depicts that 55.35% of the

respondents are positive that the failure of some

listed companies is due to partial or non-disclosure

of relevant accounting information. The remaining

respondents are of a contrary view, 35.71%

disagree, 5.36% strongly disagree while 3.57% are

undecided. With a mean of 27 and a standard

deviation of 23.80, it confirms that there is a

general agreement that failure of some listed

companies in the time past is due to partial or non-

disclosure of relevant accounting information.

Item 27 as analysed in the table above confirms

that a predominant percentage (92.86%) strongly

agree and agree with the fact that partial or non-

disclosure of relevant accounting information

impedes investors’ decisions. 1.79% disagree while

1.79% strongly disagree and 3.57% are undecided.

The weighted arithmetic mean is 27 and the

standard deviation is 29.05. This confirms that

partial or non-disclosure of relevant accounting

information impedes investors’ decisions.

The result from Table 6 on item 28 shows that

53.57% strongly agree that ensuring full disclosure

of relevant accounting standards circumvents fraud,

7.14% strongly agree, 1.79% disagree and 1.79%

strongly disagree. With a mean of 27 and a

standard deviation of 23.64, the result reveals that

ensuring full disclosure of relevant accounting

standards circumvents fraud.

The distribution of responses on item 29 as shown

in Table 6 above is: 21.43% (24) for strongly agree,

60.57% (68) for agree, 16.07% (18) for disagree,

and 0% ( 0) for strongly disagree and 3.57%

undecided. This result shows that a vast number of

the respondents agree that partial or non-disclosure

of relevant accounting information limits prudent




17

allocation of resources. This is also confirmed with

the weighted arithmetic mean of 27.5 and standard

deviation of 28.86.

The analysis of item 30 as presented in Table 6

above reveals that a vast number of respondents

accede to the fact that partial or non-disclosure of

relevant accounting information erodes investors'

confidence. Fifty four (54) representing 48.21%

strongly agree while 48.21% agree. A small

number of the respondents disagree (1.79%) and

strongly disagree (0%) to this fact. The weighted

mean of 27.5 and standard deviation of 30.61 make

it evident that partial or non-disclosure of relevant

accounting information erodes investors'

confidence.

1.5.6 HYPOTHESES TESTING – SURVEY

DATA

Hypothesis

Ho: There are no consequences to non-compliance

with the disclosure requirements of the accounting

standards.

H1: There are consequences to non-compliance

with the disclosure requirements of the accounting

standards.

Table 7: Descriptive Statistics on Consequences of Non- compliance with Accounting Standards

(Hypothesis )

Occupation Mean

Std.

Deviation N

Failure of some

Zimbabwean listed

companies is due to partial

or non-disclosure of relevant

accounting information.

Accountants 10.5 9.98 42

Auditors 12.0 9.80 48

Accounting Educators/others 4.5 5.74 18

Total 27.0 25.52 108

Partial or non-disclosure of

relevant accounting

information impedes

investors’ decisions.


Auditors 14.5 11.24 48

Accounting educator/ others 4.5 5.26 18

Total 29.5 28.65 108

Ensuring full disclosure of

relevant accounting

standards circumvents fraud.

Accountants 10.5 6.40. 42

Auditors 12.0 5.42 48

Accounting educators/others 4.5 6.61 18

Total 27.0 18.43 108


relevant accounting

information limits prudent

allocation of resources.


Auditors 12.5 12.69 50


Total 27.5 30.22 110


relevant accounting

information erodes investors'

confidence.


Auditors 10.0 12.0 50


Total 25.0 28.86 110


A one-way between-groups multivariate analysis of

variance (MANOVA) is performed to test

Hypothesis. The descriptive statistics of the

respondents classified as accountants, auditors and

accounting educators/other is as shown in Table 7

above. The sample size of valid respondents is 112,

accountants are 44, auditors are 50 and accounting

educators/others are 18. The number of cases

makes it ideal to use MANOVA in testing the

hypothesis. Items 26 to 30 of the questionnaire

were used as dependent variables, while occupation

stands as the independent variable. The mean and

standard deviation of each item is as indicated in

Table 7 above. The results of the Wilk’s Lamda of

1.19 and the corresponding value of p = 0.3021

leads to the conclusion that we fail to reject Hoand




18

conclude that there are no consequences to non-

compliance with the disclosure requirements of the

accounting standards.

1.6 FINDINGS

The qualifications and training of accountants,

auditors and accounting educators are benchmarked

against the International Education Standard for

Professional accountants 6. This explains the views

that are similar in almost all the areas under study.

All the three occupations were agreed that there are

no consequences for non- compliance with

accounting standards disclosure requirements.

1.6.1 COMPLIANCE WITH DISCLOSURE

REQUIREMENTS OF IFRS/IAS

The study confirms that all companies be they

financial or non- financial do not comply fully with

disclosure requirements of IFRS/IAS, but that the

financial sector companies have a higher disclosure

rate than non- financial companies. Companies

that are geographically spread in the region and

beyond prepare financial statements which are

comparable with international standards of their

foreign bases affiliates.

1.6.2 DISCLOSURE OF VOLUNTARY

INFORMATION.

The study reveals that on average listed companies

do not voluntarily disclose the quantitative forecast

of performance for the next accounting year and

corporate social responsibility information. Very

few companies disclose information on

environmental liabilities and costs and on risk

management.

1.6.3 FACTORS INFLUENCING THE

EXTENT OF DISCLOSURES

The study indicates that company size,

profitability, industry type and auditor type

influence the extent of disclosures. Ownership

structure, geographical spread, company listing age

and leverage were found not to influence the extent

of disclosures. The respondents are split on

whether liquidity is an influencing factor or not.

1.7RECOMMENDATIONS

The study makes theoretical and practical

contribution to the accounting profession. The

study provides additional information to

understanding company disclosure practices of

listed companies in Zimbabwe. Future researches

should be able to be benchmarked against this

study on corporate compliance disclosures.

Implications are for:

(i) Public Accountants and Auditors

Board, Securities Commission of

Zimbabwe, Zimbabwe Stock

Exchange and the Zimbabwe

Accounting Practices Board and

other regulatory authorities. The

aforementioned in conjunction

with Government financial and

regulatory authorities like the

Zimbabwe Revenue Authority,

Auditor General and Government

Accountant General must work

together in order to monitor

disclosures in both the private

and public sector. The study

provides evidence on compliance

levels in the private sector.

Improvement in the quality of

accounting information assists

both the company and

government with the attraction of

Foreign Direct Investment (FDI)

that is seriously needed in the

country. The revelation on no

consequences for non-disclosure

of mandatory information may

assist in the crafting of

regulations that help to enforce

compliance. A joint

Monitoring/Review panel of all

financial statement must be

established with the aim of

identifying skills and

performance gaps.

(ii) The findings provide up to date

assessment of the extent of non-

compliance with IFRSs/IASs by

Zimbabwe companies to

investors.

(iii) Accounting Professional

bodies/local, regional and

international and global) who are

promoting the use of IFRSs will

find this information useful and

interesting in furthering the

adoption of IFRSs in countries

that do not use IFRSs/IASs.




19

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.

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21

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