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

Ehab K. A. Mohamed
Sultan Qaboos University

Tarek I. Eldomiaty
United Arab Emirates University

Mohamed H Azim
United Arab Emirates University

Peter B. Oyelere
Sultan Qaboos University Oman

Abstract: This study examines the extent of financial information transparency included in the financial reports. Three types of financial information are examined: balance sheet, income statement, and financial ratios as co-integrated financial information. The later is classified into the most common types of financial ratios: Solvency, Assets Efficiency, Expense Control, Debt capacity, Profitability, and Dividends information. The determinants of transparency are examined through carrying out stepwise regression of the three types of financial information on firms’ market-to-book (MB) ratios being taken as a proxy for shareholders interests. The sample firms are classified into three levels of MB ratios: high, medium and low. The results provide evidence that the fundamental financial analysis is transparent to corporate shareholder to the extent that it discloses the fundamental financial aspects of firms’ performance and many aspects of financial governance of corporate performance.

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