The Effect Of Audit Committee Characteristics On Corporate Social Responsibility Disclosure: Evidence From Gulf Countries Banks

Abstract

The objective of this study is to determine the level of corporate social responsibility disclosure for listed banks in securities markets of Gulf countries (Saudi, Emirates, Qatar, Kuwait, Bahrain, and Oman). In addition the study examines the effect of audit committee characteristics (audit committee size, independence, and meeting) on corporate social responsibility disclosure. The sample of study has been selected based on 20 banks which have higher market value of listed banks in Gulf countries securities market. The total number of banks that available in the securities markets in the end of 2018 was 160 banks for three bank types (Islamic, trading, and specialized). Moreover, the study uses a time series data for three years during 2016-2018 with total 60 observations. The descriptive results of this study show that the level of disclosure to the corporate social responsibility in the financial reporting for the banks was uneven during period of the study. The regression result reveals that there is a significant positive relationship between audit committee size, committee meeting and corporate social responsibility disclosure. In addition, the result finds that there is a significant negative relationship between audit committee independence and corporate social responsibility disclosure. Findings of this study have potential implications to all financial reporting users by knowing the importance of corporate social responsibility disclosure in the financial reporting, and the importance of audit committee as one of corporate governance mechanisms to improving the disclosure level and quality in the financial reporting