An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

Greg Tower
Curtin University of Technology

Grace Zhu
Curtin University of Technology

Abstract: This study empirically examined the influence of firm characteristics, governance attributes and ownership structures on the Chinese manufacturing companies’ asset impairment disclosure levels in their 2004 annual reports. The results indicate that the only effective corporate governance mechanism (the Board leadership structure) has a highly significant negative association with the extent of disclosure, however, in a direction opposite to that documented in prior literature. This suggests that manufacturing companies with unitary leadership structure are more transparent than those with the two crucial positions (CEO and Chairman) held by different people. Company-specific characteristics, i.e. company size, leverage level and profitability, also influence Chinese listed manufacturing companies’ disclosure level in terms of asset impairment disclosures. The findings may accelerate Chinese government corporate reforms.

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