Full Length Research Paper

Factors that drive forward looking information in annual reports of Pakistan’s energy sector companies

¹*Bilal, ¹Sumaira Tufail and ²Javaria Khan

¹Hailey College of Commerce, University of the Punjab Lahore, Pakistan
²University of Central Punjab, Lahore

*Corresponding Author E-mail: bilalsharif313@gmail.com

Accepted May 08, 2013

Abstract

The main purpose of this study is that investigates the factors that drive forward looking information of Pakistan’s energy sector companies. Empirical exploration of factor, which drives forward looking information apply on cross-sectional data of 2012 on energy sector companies of Pakistan, is done through multiple regression analysis. The regression diagnostic tests are applied in order to check the multicollnierty and heteroskdasticity in the model. The outcomes of study advocate that debt ratio, age of the firm, firm size and liquidity are significant determinates of the forward looking information. Alternatively, auditor size and profitability are not significant determinants of forward looking information. These outcomes are not in-line with the studies in developed countries and even with Middle East countries studies. This research has provided an initial foundation to ascertain the factors influencing decisions of stakeholders of Pakistan energy sector and it can be a preliminary base for more methodical investigation. Moreover, this can be also helpful for the managers in making decisions about forward looking information in annual reports. This study, to the author’s knowledge, is conducted first time in Pakistan for investigating the determinants of forward looking information and their implications on energy sector companies of Pakistan.

Keywords: Forward Looking Information, Energy Sector, Pakistan