Main Determinants of Financial Reporting Quality in the Lebanese Banking Sector

Rasha Mahboub
European Research Studies Journal, Volume XX, Issue 4B, 706-726, 2017
DOI: 10.35808/ersj/922


The study aims to investigate the potential determinants that may influence the quality of financial reporting of 88 annual reports of a sample of 22 Lebanese banks for the period 2012-2015.Financial reporting quality index with 40 items was used as the dependent variable, while bank specific characteristics of leverage, size, and profitability as well as corporate governance features of board independence, ownership structure, and board size constitute the independent variables.Using multivariate OLS model, the results indicate that financial leverage, ownership structure and board size has significant and positive relationship with financial reporting quality. On the other hand, bank size, profitability and board independence were found to be not statistically significant in explaining the quality of financial reporting of banking sector in Lebanon.The results reveal that better financial reporting quality of the annual reports in banking sector can be achieved by having higher proportion of debts, higher ownership by the shareholders, and higher board size. These findings could be of interest to potential investors, management and regulators in the process of financial reporting quality enhancement.

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