A study on the factors affecting the litigation contingency disclosure of the publicly listed companies in the Philippines

• Main Authors: Dee, Andrea Hilarry L., Fajardo, Vincent Rafael E., Go, Sally L., Vidal, Colleen Grace O.
• Format: text
• Language: English
• Published: Animo Repository 2015
• Subjects: Contingencies in finance > Accounting
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/7118
• Institution: De La Salle University

Litigation-type contingency is considered as one of the most often and most significant uncertainties faced by the companies in the world of business. Thus, this paper focused on two aspects of litigation contingencies: the level of litigation contingency of the publicly listed companies in the Philippines from the year 2009-2013, and the relationship between the factors such as size, capital structure, ownership structure, profitability, age and industry. The researchers used 164 companies as a sample for the study. Disclosure scores are first analyzed based on the nine litigation contingency disclosure items. Moreover, panel regression analysis is used to analyze the association of the factors such as size, capital structure, ownership structure, profitability, age and industry towards the level of litigation contingency disclosure. The findings indicate that the disclosure level of the publicly listed companies is low because there are 83 companies that is below the overall mean of 40% while there are only 81 companies that have a higher mean than 40%. Further, the findings infer that the variables size, age and the financial and property industry are statistically significant in relation with the level of litigation contingency disclosure. This study is vital since it will mainly assist the auditors in the Philippines in auditing companies, especially the ones with larger size and/or the younger ones.