The usefulness of quarterly financial reports to Kuwaiti financial users in the Kuwait Stock Exchange

This thesis contributes to the literature on financial reporting in less developed countries, with special reference to the Kuwait Stock Exchange (KSE) and the Gulf Co-Operated Countries GCC area in particular. The study aims to examine the usefulness of quarterly financial reports (QFRs) to investors in Kuwait. It draws attention to the importance of quarterly accounting information and emphasises the critical theoretical and practical roles that quarterly accountings tatementsc an play in helping financial usersm ake financial decisions. The main findings indicate that quarterly financial reports in the Kuwait Stock Exchange are useful to Kuwaiti investors; however, such reports need further refinement and closer regulation in order to increase their usefulness, especially in relation to companies' expected performance and the future expectations of companies. In addition, the study shows that QFRs increase investor confidence when making and subsequently monitoring investments, evaluating management performance, making predictions about the future performance of companies, and predicting the future values of dividends and share prices. The findings also revealed that respondents believed that the prices and volumes of shares traded on the KSE are sensitive to financial information contained in QFRs. Specifically, the results indicate that company earnings, dividends payments, annual reports, quarterly reports and management experience were the most influential factors affecting purchasing attitudes and share prices. With regard to QFRs the majority of respondentsb elieved that auditor involvement in QFRs improved their reliability; however, most of the users expressed dissatisfaction with the current reporting lag of 45 days and would ideally like to see this reduced to less than 30 days. Respondents were also generally dissatisfied with current disclosures and wanted more information relating to the financial position of companies incorporated in to QFRs. Finally, the results indicate that information on the financial and capital leverage (or gearing) of the company, the risk exposure of the firm and an information on the type of industry in which the businesso perates,w ere the most likely factorst o increaset he demandf or QFRs.