Research Hypotheses

In the deductive approach, in order to investigate expectations or test hypotheses, a researcher forms certain “normative” expectations or hypotheses from a general premise, theory, or empirical evidence. On the other hand, with the inductive method, the researcher begins with the data and designs a “positive” research method to investigate the generalisability of the evidence. As this study adopts the deductive approach, the researcher begins with forming the hypotheses from a general premise and the relevant theoretical and empirical evidence. Since the study employs two methods to investigate corporate reporting practices in the annual reports of Libyan firms, which are a questionnaire survey and disclosure content analysis, two types of hypotheses were developed based on the objectives of the study. For the questionnaire, hypotheses were developed to explore any differences between the perceptions of the respondents groups regarding the usefulness of information provided in the annual reports of Libyan firms, while for the disclosure content analysis, hypotheses were developed to examine the relationships between corporate governance characteristics, ownership structure and corporate characteristics and the extent of disclosure. Therefore, for the purpose of the current study, the deductive approach was adopted by forming expectations or hypotheses in a prescriptive manner and collecting evidence to examine expectations and test hypotheses.

5.4.1Questionnaire Related Hypotheses

The developed hypotheses below reflect the decision usefulness approach and positivistic approach adopted in the thesis. Each hypothesis focuses on a specific objective issue regarding current disclosure practices in the Libyan companies that reflected the role of corporate reporting in a conventional decision usefulness framework. Table 5.3 details and summarises each of the hypotheses adopted.

Table 5-3 The hypotheses of the questionnaire survey

No Hypothesis Expected

sign Previous studies

Hq1

There are no significant differences among the respondent groups regarding their perceptions of the importance they attach to sources of corporate information. _?

Abu-Nassar and Rutherford (1996); Desoky, (2002); Mirshekary & Saudagaran, (2005); Alzarouni et al., (2011).

Hq1.1

There are no significant differences between the user groups as a whole and the preparers regarding their perceptions of the importance they attach to sources of corporate information.

?

Abu-Nassar and Rutherford (1996); Desoky, (2002); Mirshekary & Saudagaran, (2005); Alzarouni et al., (2011).

Hq2

There are no significant differences among the respondent groups regarding the importance they attach to sections of CARs.

?

Abu-Nassar and Rutherford (1996); Desoky, (2002); Mirshekary & Saudagaran, (2005); Anura & Kathy, (2010); Alzarouni et al., (2011).

Hq2.1

There are no significant differences between the user groups as a whole and the preparers regarding the importance they attach to sections of CARs.

?

Abu-Nassar and Rutherford (1996); Desoky, (2002); Mirshekary & Saudagaran, (2005); Anura & Kathy, (2010); Alzarouni et al., (2011).

Hq3

There are no significant differences among respondent groups regarding their reading of various sections of CARs.

?

Desoky, (2002); Mirshekary & Saudagaran, (2005).

Hq3.1

There are no significant differences between the user groups as a whole and the preparers regarding their reading of various sections of CARs.

?

Desoky, (2002); Mirshekary & Saudagaran, (2005).

Hq4

There are no significant differences among respondent groups regarding their perceptions of the

understandability of various sections of CARs.

?

Desoky, (2002); Mirshekary & Saudagaran, (2005).

Hq4.1

There are no significant differences between the user groups as whole and the preparers regarding their

perceptions of the understandability of various sections of CARs.

?

Desoky, (2002); Mirshekary & Saudagaran, (2005).

Hq5

There are no significant differences among respondent groups regarding their perceptions of the usefulness of the information included in CARs.

?

Desoky, (2002); Mirshekary & Saudagaran, (2005).

Hq5.1

There are no significant differences between the user groups as a whole and the preparers regarding their perceptions of the usefulness of the information included in CARs.

?

Desoky, (2002); Mirshekary & Saudagaran, (2005).

Hq6

There are no significant differences among respondent groups regarding their perceptions of the issues influencing the use of CARs.

?

Desoky, (2002); Mirshekary & Saudagaran, (2005).

Hq6.1

There are no significant differences between the user groups as a whole and the preparers regarding their perceptions of the issues influencing the use of CARs.

?

Desoky, (2002); Mirshekary & Saudagaran, (2005).

Hq7

There are no significant differences among respondent groups regarding their perceptions of the suitability of the selected set of QCOAI to evaluate the usefulness of financial information provided in CARs.

?

Abu-Nassar and Rutherford (1996); Desoky, (2002); Mirshekary & Saudagaran, (2005); Lennard (2007).

Hq7.1

There are no significant differences between the user groups as a whole and the preparers regarding their perceptions of the suitability of the selected set of QCOAI to evaluate the usefulness of financial information provided in CARs.

?

Abu-Nassar and Rutherford (1996); Desoky, (2002); Mirshekary & Saudagaran, (2005); Lennard (2007).

Hq8

There are no significant differences among respondent groups regarding their perceptions of the extent to which the current available information meets each qualitative characteristic when evaluating the usefulness of information appearing in CARs.

?

Abu-Nassar and Rutherford (1996); Desoky, (2002); Lennard (2007); Mirshekary & Saudagaran, (2005); Lennard (2007).

Hq8.1

There are no significant differences between the user groups as a whole and the preparers regarding their perceptions of the extent to which the current available information meet each qualitative characteristic when evaluating the usefulness of information appearing in CARs.

?

Abu-Nassar and Rutherford (1996); Desoky, (2002); Mirshekary & Saudagaran, (2005).

Hq9

There are no significant differences among respondent groups regarding their perceptions of the factors

influencing corporate reporting practices. ?

Desoky, (2002); Ho & Wong, (2003); Mirshekary & Saudagaran, (2005); Anura & Kathy, (2010).

Hq9.1

There are no significant differences between the user groups as a whole and the preparers regarding their perceptions of the factors influencing corporate reporting practices.

?

Desoky, (2002); Ho & Wong, (2003); Mirshekary & Saudagaran, (2005); Anura & Kathy, (2010).

Hq10

There are no significant differences among respondent groups regarding their perceptions of the obstacles

restricting the disclosure level in CARs. ?

Desoky, (2002); Ho & Wong, (2003); Mirshekary & Saudagaran, (2005); Anura & Kathy, (2010).

Hq10.1

There are no significant differences between the user groups as a whole and the preparers regarding their perceptions of the obstacles restricting the disclosure level in CARs.

?

Desoky, (2002); Ho & Wong, (2003); Mirshekary & Saudagaran, (2005); Anura & Kathy, (2010).

Hq11

There are no significant differences among respondent groups regarding their perceptions of the need for

additional information in CARs. ?

Abu-Nassar and Rutherford (1996); Desoky, (2002); Mirshekary & Saudagaran, (2005).

Hq11.1

There are no significant differences between the user groups as a whole and the preparers regarding their perceptions of the need for additional information in CARs.

?

Abu-Nassar and Rutherford (1996); Desoky, (2002); Mirshekary & Saudagaran, (2005).

5.4.2Disclosure Related Hypotheses

As discussed in the hypotheses development in Chapter Four (section 4.5), the hypotheses listed below are formulated based on theoretical and empirical evidence with reference to the Libyan context. Table 5-4 summarises each of the hypotheses developed for the current study.

Table 5-4 The hypotheses of the disclosure content analysis

No Hypothesis Expected

sign Previous studies

Hd1

There is a significant association between board size and the level of disclosure in the annual reports of Libyan companies.

?

Barako et al., (2006); Laksmana, (2008); Samaha et al., (2012); Wang & Hussainey, (2013); Ebrahim & Fattah, (2015); Samaha et al., (2015). Hd2

There is a significant positive association between the number of meetings and the level of disclosure in the annual reports of Libyan companies.

+

Kelton & Yang, (2008) Barros et al., (2013); Alhazaimeh et al., (2014); Othman et al., (2014).

Hd3

There is a significant positive association between the existence of an audit committee and the level of disclosure in the annual reports of Libyan companies.

+

Mangena & Pike, (2005); Barako et al., (2006); Samaha et al., (2012); Allegrini & Greco, (2013); Samaha et al., (2015).

Hd4

There is a significant association between ownership structure and the level of disclosure in the annual reports of Libyan companies.

?

Ferguson et al. (2002); Eng & Mak (2003); Xiao et al., (2004); Collett & Hrasky, (2005); Ghazali & Weetman, (2006); Hossain & Taylor (2007); Ntim, Opong & Danbolt, (2012); Khan et al., (2013); Ntim &

Soobaroyen, (2013a); Alhazaimeh et al., (2014); Ebrahim & Fattah, (2015).

In document An Evaluation of Comprehensiveness of Corporate Reporting Practices in a Developing Country: Empirical Evidence From Listed and Non-Listed Libyan Companies (Page 120-123)