Impact of cost stickiness on financial disclosure quality: A study in the Saudi Arabian context

  • Received October 18, 2020;
    Accepted November 19, 2020;
    Published November 27, 2020
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  • Article Info
    Volume 17 2020, Issue #4, pp. 145-151
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    1 articles

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The study examines the association between the disclosure quality and cost stickiness in the Saudi Arabian context. The influence of accounting information on the decisions of different stakeholders gives a clear idea of the importance of this accounting information and its reporting. Annual accounting reports form the final stage of the disclosure process. Moreover, the recognition of different types of costs is an important issue in cost and management accounting. Submitting quality annual reports has always been an interesting concern to different stakeholders of a company. The study sample consists of 102 companies listed on the Saudi Stock Exchange Tadawul between 2009 and 2018. The study uses pooled OLS to investigate the association between financial disclosure and cost stickiness. The relationship of financial reporting quality with the cost of goods sold is negative, positive with the sales cost, and positive and insignificant with administrative costs. The study concludes that variables related to sticky costs affect financial quality disclosures. The impact of sticky cost variables on the quality of disclosures is different due to the transition policies adopted by the Saudi Arabian economy.

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    • Table 1. Descriptive statistics
    • Table 2. Inferential statistics
    • Table 3. Results of the estimated pooled regression model
    • Conceptualization
      Abdulwahid Ahmed Hashed Abdullah
    • Data curation
      Abdulwahid Ahmed Hashed Abdullah
    • Formal Analysis
      Abdulwahid Ahmed Hashed Abdullah
    • Investigation
      Abdulwahid Ahmed Hashed Abdullah
    • Methodology
      Abdulwahid Ahmed Hashed Abdullah
    • Project administration
      Abdulwahid Ahmed Hashed Abdullah
    • Supervision
      Abdulwahid Ahmed Hashed Abdullah
    • Validation
      Abdulwahid Ahmed Hashed Abdullah
    • Visualization
      Abdulwahid Ahmed Hashed Abdullah
    • Writing – original draft
      Abdulwahid Ahmed Hashed Abdullah
    • Writing – review & editing
      Abdulwahid Ahmed Hashed Abdullah