Financial Disclosure and Interpretation of Financial Results in Zimbabwe Stock Exchange Listed Companies

Abstract

This research investigates the influence of financial disclosure on performance of the Zimbabwe Stock Exchange listed companies. Most literature sources are available on developed countries with a few on developing countries. A pragmatic philosophical approach involving the use of the exploratory, descriptive and explanatory research design was adopted to fully understand the research questions. Quantitative results were complimented by qualitative data obtained   from interviews. In conducting the survey, a sample of 110 respondents was selected using the Krejice and Morgan (1970) sample estimation tables’. The targeted respondents included the Zimbabwe Stock Exchange listed companies. A scale structured questionnaire was used to collect data. Spearman coefficient and multiple regression analysis were used to analyse data with the aid of Social Package for Social Sciences (S.P.S.S). The Cronbach Alpha test was performed and all the values were greater than 0.7 and therefore accepted, (Nunnally and Beinstein, 1994). It was revealed that independent variables (level of disclosure and type of disclosure) have a positive influence on performance of listed companies according to the Spearman Correlation test which yielded a minimum correlation coefficient of 0.58 and a maximum of 0.78 leading to the rejection of proposed null hypothesis. Accordingly, this study concluded that the new International Financial Reporting Standards (IFRS), which are intended to promote greater disclosures, will contribute to the improvement of the companies' financial performance. Consequently, the government should make sure that additional disclosures are issued through the various regulatory bodies so that investors may make informed judgments about whether or not to invest. This paper also suggests that, in addition to the legally required disclosures, any listed company that wishes to expand and achieve sustainable financial performance should make every effort to disclose all relevant information to investors in the financial report. The study contributed not only to literature on financial disclosure but filling the gap in literature, providing immense usage for these techniques.