The Role of Accounting Disclosure in Rationalizing Investment Decisions in Commercial Banks: A Field Study of Al-Wahda Bank and the Bank of Commerce and Development in Benghazi

Abstract

The purpose of the current study is to determine the role of accounting disclosure in rationalizing investment decisions in commercial banks in Benghazi. The sample was limited to the employees of the Accounting Department, Investment Projects Department, Risk Management Department, and Shareholder Management Department at Wahda Bank and Bank of Commerce and Development in Benghazi. In order to obtain data on the independent variable (accounting disclosure) and data on the dependent variable (investment decisions) “Miller model” was used, and (80) questionnaire forms were distributed. To achieve the aims of the study, the descriptive analytical approach was applied. It includes frequency tables and percentages, in addition to means and standard deviations. Inferential statistics was also used to test the study hypotheses using the Wilcoxon Signed Rank test and the Kruska Wallis Test to evaluate the significant differences between participants’ answers. Moreover, Spearman’s rank correlation coefficient was utilized to examine the relationship between accounting disclosure and rationalization of investment decisions in commercial banks in Benghazi. The data was analyzed using the statistical program (SPSS). The study finds out that Benghazi's commercial banks provide information obtained from financial statements to investors and assist them in rationalizing their decisions. The current study recommends that efforts should be made to raise investor awareness of the significance of the disclosed financial statements in rationalizing investment decisions.