




































Indian Journal of Finance and Banking 

 Vol. 5, No. 1; 2021 

                                       ISSN 2574-6081   E-ISSN 2574-609X 

Published by CRIBFB, USA 

 

10 

EXAMINATION OF RELATED PARTY DISCLOSURE AND 

COMPLIANCE AMONG LISTED GHANAIAN BANKS 

 

 

Dr. John Kwaku Mensah Mawutor 

Dean 

 School of Graduate Studies 

University of Professional Studies, Accra 

P.O. Box 149 Legon, Ghana 

E-mail: john.mensah@upsamail.edu.gh 

 

 

ABSTRACT 

This study examined the compliance level of IAS 24, “Related Party Disclosures” of banks in 

Ghana and determined some firm specific characteristic that influence the level of disclosure. 

Using the quantitative research approach, the study was conducted on thirteen banks in Ghana 

constituting 56% of the entire population. Secondary data was obtained from annual reports of 

the banks and related published articles. The study again identified the most common type of 

related party transactions done by Banks in Ghana. Findings revealed that the level of 

compliance with IAS 24 among Banks in Ghana is relatively low. The study again found that 

Board Size, Company Size, Type of Auditor, Listing, and profitability has a positive influence on 

the level of disclosure. Findings also revealed that only Company Size is statistically significant 

with the level of compliance of IAS 24 among Banks in Ghana.  

 

Keywords: Compliance, Related Party, Transactions, Banks, IAS 24, Disclosures, Failures. 

 

JEL Classification Codes: A19, B10, B25, C10, C53. 

 

INTRODUCTION 

Background 

The failure of several firms across the world has been attributed to the unavailability and non-

disclosure of information regarding related party transactions (RPTs) (Rahman, 2018).  Firms 

such as Enron were found to have used special purpose entities to manipulate income and 

transfer cash, guaranteed related party debt and provided extensive loans to its executive 

(Mayhew & Kohlbeck, 2004). In the case of several failed financial institutions in Ghana, a 

recent assessment conducted by the Bank of Ghana in the banking sector found that 85% of these 

institutions used depositors’ funds to finance personal and related party business on non-

commercial basis which led to the collapse of these financial institutions (Bank of Ghana, 2019). 

According to Cheung, Rau, & Stouraitis (2009), Non-disclosure of related party transactions can 

affect the assessment of a company’s operation and eventually encourage possible conflict of 

interest among stakeholders of organizations. 

To address these possible conflicts of interests, the International Accounting Standards 

Board (IASB) formulated standards (Related party transactions IAS 24) to provide vital 

information and data regarding entity’s outstanding balances and different transactions related to 

mailto:john.mensah@upsamail.edu.gh


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several parties (Rahman, 2018). According to Abdul (2015), though all listed firms in Ghana 

were mandated to adopt IFRS in 2007, not all the listed firms after the adoption have wholly 

complied. A recent report by the Bank of Ghana (BoG) into the collapse of some commercial 

banks in Ghana has revealed some directors of the collapsed banks used a carefully spun web of 

related party transactions to grant huge loans to themselves and their associates without 

disclosing such transactions (Mustapha, 2018). This could be possibly attributed to the lack of 

inadequacy of comprehensive IAS compliance mechanisms in the country. Evidence on the level 

and extent of compliance of IAS 24 in Ghana remains limited despite its adoption several years 

ago (Appiah, Vitor, Mireku, & Ahiagbah, 2016). 

Studies on compliance with IFRS in Ghana are mostly focused on general compliance 

without comprehensively assessing individual IFRS standards compliance and the few studies on 

RPTs in Ghana tends to identify the factors and determinants of RPTs, not assessing their 

Disclosures. No prior study has conducted a comprehensive examination on the extent of 

compliance with IAS 24, Related Party Disclosure by banks in Ghana. In view of this 

phenomenon, this study assessed the extent to which Banks in Ghana comply with the disclosure 

requirements of International Accounting Standards (IAS 24), Related Party Disclosures. 

This study has been composed into five main sections. The first section introduced the 

background of the study whiles the second section reviewed scholarly articles on the topic into 

empirically and theoretically theories. The third section of the study discussed the methodology, 

data analysis and the findings. Finally, the last segment of this study presented the summary of 

findings, recommendations and drew conclusions from the findings. 

 

LITERATURE REVIEW 

Over the decades, there have been studies on the level of compliance to IAS/IFRS, particularly 

on IAS 24 Related Party Disclosures. Several articles on related party transactions have been 

published in academic journals, however only few focused on the feature if related party 

transactions are properly disclosed. Some prior studies also tend to focus on the nature and extent 

of related party transaction based on the supposition that the disclosure on related party 

transactions capture the full extent of the transactions. Those studies examine either 

comprehensive related party transactions, for instance, the number of related party transactions 

(Gordon, Henry, & Palia, 2004). Specific related party transactions such as transfer of assets, 

related party sales, purchases and payments. These studies did not focus on related party 

disclosures and level of compliance of the standard. 

Gordon et al. (2004), investigated 112 firms that are publicly listed on the US stock 

market that disclose related transactions for the period 2000 to 2001. Those firms operate in the 

manufacturing, wholesale and retail industries. Their finding indicated that on average, each firm 

discloses 3.9 RP transactions. The natures of these transactions are commonly real estate 

transactions, RP loans and RP sales. 

Mayhew and Kohlbeck (2004) conducted a study on the assessment of firms that disclose 

related party transactions. They expressed on the view that RP transactions disclosures provide 

information needed by investors to discipline insider’s opportunistic behavior. Following RP 

disclosures, they identified that investor’s ability is limited to selling or refusing to buy the 

stocks firms that do not disclose RP transactions, or prompting ex-pose litigation against 

opportunistic behavior. 

Barokah (2013) assessed and discussed the institutional factors that hypothetically 

influence RP disclosures and the extent of IAS 24 adoption in selected Asian- pacific countries, a 



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sample of 582 listed companies were used for this study. She found that RP transactions are 

common across Asian- Pacific countries, with RP loans been the common type of transaction. 

She also found that other factors such as strength of enforcement by accounting regulatory 

bodies, the control for corruption, the protection of minority shareholders against self – dealing 

actions impacts RP disclosure transparency. Adequate disclosure of sensitive information in a 

financial statement is paramount to the protection of investors’ interest (Tanwar, Vaish, & Rao, 

2020; Waleru & Beauty, 2018; Bidabad, 2019). 

Arshad, Darus, and Othman (2009), investigated the effects of IFRS adopted standard, 

board members with accounting profession affiliations, board interlocks, family members, 

government- ownership and the independent non-executive directors on the extent of RP 

transactions in two disclosure periods 2002 and 2007. They used the annual reports of 144 

Malaysian listed companies to conduct the study. They measured related party disclosure as the 

set/aggregate number of words related to RP disclosures in the annual reports. Their findings 

indicated that the extent of RP discloses has a positive relationship with professional affiliation 

and company size, but they did not find any influence of the other variables (i.e. Family 

ownership and independent of non-executive directors) on the extent of RP disclosures. In his 

study Rahman (2018), he assessed the present status of related party disclosure and practice level 

of IAS 24, Related Party Disclosures in annual reports by 10 listed banks in Bangladesh. He 

found that there is poor application and compliance of IAS 24 among listed banks in Bangladesh. 

Agyei-Mensah (2012), also conducted a study to investigate the influence of firm- 

specific characteristics such as firm size, profitability, debt equity ratio, liquidity and audit firm 

size on voluntary disclosures of financial information and found that profitability is positively 

related to the disclosure level, while debt equity ratio, liquidity, firm size and audit firm size 

were insignificantly related to disclosure level of the banks. Bakkeri & Ali (2020) also found 

other regulatory variables as critical factors that determine the profitability of banks. According 

to Bidabad and Allahyarifard (2019), adequate disclosure of firms’ financial statement has 

positive impact on the profitability of firms. 

From the above reviews it is evidenced that much of the studies on IAS 24 were done in 

foreign countries. Little has been done in Ghana concerning Related Party Disclosures, most of 

which focused on the implications of related party transactions but not their Disclosures or the 

compliance level of Related Party Disclosures (IAS 24). It is therefore prudent for the 

researchers to assess the compliance level of this standard. 

 

METHODOLOGY 

The study adopted the quantitative research approach to examine the relationship between 

dependent and independent variables. Data required for this study were collected from secondary 

sources. The targeted population for the study was Banking Financial Institutions in Ghana. 

There are currently twenty-three (23) banking institutions in Ghana.  

The sampling technique used for this study was judgmental sampling. Judgmental 

sampling is the sampling technique use by a researcher to exercise judgment to select cases that 

enable the researcher achieves the objectives of the study and more so to answer the research 

questions. Out of the twenty Banks in, thirteen of them were used for the study which constitutes 

56.5% of the targeted population. The researchers decided to conduct the study on thirteen out of 

the twenty-three banks in Ghana due to limited time factor, availability of data and also because 

of the researchers believe that thirteen out of twenty-three is illustrative enough. 

3.2 Dependent and Independent variables 



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The dependent variable used for this study is the extent of compliance to IAS 24, Related 

party Disclosures by Banks in Ghana. On the other hand, the independent variables used to 

explain the dependent variable are Board size, Company size, Type of Auditor, Profitability, 

listing status and ownership concentration. Choosing these variables is informed by prior 

disclosure literature as they were identified to be related to disclosure. The relationship between 

the independent variable and dependent variable is the basis of most statistical test, which 

establishes whether there is a significant relationship between the two types of variables. The 

results of these tests allow the researcher to accept or reject the null hypothesis, and draw 

conclusions (Shuttleworth, 2008). 

To assess the influence of the independent variables on dependent variable the following 

hypothesis was developed. 

 

Ho: Board size is not significantly associated with the level of RP disclosures of banks in Ghana. 

Ho: Company size is not statistically significant with the level of RP disclosures of banks in 

Ghana.  

Ho: Type of auditor does not have a significant influence on the level of RP disclosures of banks 

in Ghana. 

Ho: Profitability does not have a significant influence with the level of RP disclosures of banks 

in Ghana. 

Ho: listing status does not have a significant influence on the level of RP disclosures of banks in 

Ghana. 

Ho: Ownership concentrations do not significantly influence the level of RP disclosures of banks 

in Ghana. 

 

DATA ANALYSIS 

To assess the extent of compliance of IAS 24, Related Party Disclosures by listed banks, a self-

structured compliance checklist was developed by the researchers in accordance to the disclosure 

requirements mandated by IAS 24. To validate the checklist, it was presented to a proficient 

auditor to crisscross the comprehensiveness and applicability to IAS 24. In order to measure the 

relationship between variables; Correlation, Regression Analysis Model and Descriptive 

Analysis was employed. In describing the association between two or more variables in terms of 

magnitude and direction, correlation was used. The regression analysis allowed modeling the 

relationship between a dependent variable and one or more independent variables of numerical 

data (Stuart & Headlam). 

MODELS DEVELOPMENT 

In order to measure the level of disclosure of IAS 24, a disclosure index was employed. This was 

used as the dependent variable and the firm specific characteristics (board size, company size, 

type of auditor, profitability, Listing status and Ownership concentration) as independent 

variables. The disclosure index is in the functional formula: 

DI = 
Number of items disclosed in the Annual Reports

Total Number of disclosed items
 

Where, 

 DI = Disclosure Index 



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 DI = di 
 d = 1 if item is disclosed 

 i = 1   0= if item is not disclosed 

 n = number of items 

To estimate the relationship between the dependent variable and the independent 

variables the following regression model and equation was applied. 

DI = f (Board Size, Company Size, Type of Auditor, Profitability (ROE),                                                                                                                                                        

Listing status and Ownership concentration) 

To measure the relationship between variables the following equation was developed. 

DIit = β0 + β1 BSIZEit + β2 CSIZE+ β3 AUDit + β4 ROEit + β5 LISTit + β5 OWNit +ҿ 

Where,  

 DI = Disclosure index 

 β0 = the intercept 

 BSIZE = Board Size (the number of directors on the board) 

 CSIZE = Company Size (the banks total asset at year end) 

 AUD = Type of Auditor (dummy variable 1 if bank is audited by Big 4 (KPMG, Deloitte, 

PWC, Ernst and Young) and 0 if otherwise) 

 ROE = Profitability of Bank Measured in Return to Equity (Net profit/ Total 

shareholders’ equity)  

 LIST = Listing Status: dummy variable 1 if bank is listed on GSE and 0 if not listed) 

 OWN = Largest Shareholder percentage    

 E=the error term 

 

ANALYSIS AND DISCLOSURE REQUIREMENTS OF IAS 24, RELATED PARTY 

DISCLOSURES. 

Inference to research question one (RQ1) captured in chapter 2, on the disclosure requirements 

of IAS 24, Table 1 identified these requirements as per stated by the IASB.  Data obtained after 

surveying the annual reports of thirteen banks in Ghana for the period of ten years indicated the 

following status of IAS 24, Related Party Disclosures by banks in Ghana. 

 

1. A reporting entity shall disclose the name of its parent company; referring to Table 1, the 

study found that 66% of the sample banks disclosed the name of their parent company. 

2. The entity shall disclose the name of its ultimate controlling party if different to its parent; it 

can be seen from Table 1 that 17% of the sample banks the name of its ultimate controlling party 

different to its parents.  

3. Disclose the name of the next most senior parent (where neither the entity’s parent nor the 

ultimate controlling party produces consolidated financial statements available for public use); 

from the Table 1, none (0%) of the sample banks disclosed the name of the most senior parent 

that is neither the entity parent nor the ultimate controlling party produces consolidated financial 

statement available for public use. 



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 4. Disclose key management personnel compensation in total for each of the following 

categories:  

(a) Short-term employee benefits; the Table 1 below indicated that 72% of the sample banks 

disclosed the key management compensation for short- term employee benefit. 

(b) Post-employment benefits; it can be seen in the Table 1 that 61% of the selected banks 

disclosed post- employment benefits for key management compensation. 

(c) Other long term benefits; from the Table 1, this item has been disclosed by 3% of the selected 

banks. 

(d) Termination benefit; has been disclosed by 26% of the sample banks. 

(e) Share based payment; referring to Table 1, this item was disclosed by 26% of the selected 

banks. 

 

5. Disclose the nature, amount, and outstanding balances of related party transactions by separate 

categories for each of the following: 

(a) Parent company: referring to the Table 1, 37% of the sample banks disclosed transactions 

with parent companies. 

(b) Entities with joint control or significant influence over the entity; none of the sample banks 

disclosed this item 

(c) Subsidiaries; 44% of the sample banks disclosed transactions with subsidiaries (Table 1) 

(d) Associates; 42% of the selected banks disclosed transactions with associates. 

(e) Joint venture in with the entity is a venture; none of the selected banks over the ten years 

period disclosed transactions with joint ventures. 

(f) Key management personnel of the entity or its parent; 92% of the selected banks disclosed 

transactions with key management personnel. 

(g) Other related parties; 53% of the sample banks disclosed transactions with other related 

parties (Table 1) 

 

6. Government-related entity taken exemption where the government related entity applies the 

exemption in paragraph 25 of IAS 24 (2009) 

 

(a) The reporting entity shall disclose the name of the government; from Table 1, on average 

17% of the selected banks for the ten years period disclosed information on government related 

parties. 

(b) Disclose the nature of its relationship with the reporting entity (i.e. control, joint control or 

significant influence); in reference to Table 1, 17% of the selected banks disclosed the nature of 

government related relationships. 

c) Disclose the nature of and amount of each individually significant transaction in sufficient 

detail to enable users of the entity’s statements to understand the effect of related party 

transactions on its financial statement; from Table 1, 13% of the selected banks disclosed 

transactions with government related parties. 

d) Disclose other transactions that are collectively, but not individually, significant a qualitative 

or quantitative indication of their extent; none of the banks disclosed this item (Table 1) 

 

 



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Table 1.  Frequency of disclosure of IAS 24, Related party Disclosures 

 Disclosure requirement under IAS 24 Sample 

observation  

Disclosure 

level 

Disclosure 

percentage 

1 A reporting entity shall disclose the 

name of its parent company 

119 79 66% 

2 The entity shall disclose the name of its 

ultimate controlling party if different to 

its parent 

119 20 17% 

3 Disclose the name of the next most 

senior parent (where neither the entity’s 

parent nor the ultimate controlling 

party produces consolidated financial 

statements available for public use). 

119 0 0% 

4 Disclose key management personnel 

compensation in total for each of the 

following categories: 

   

 (i) short-term employee benefits; 119 86 72% 

 (ii) post-employment benefits 119 72 61% 

 (iii)other long-term benefit 119 3 3% 

 (iv)termination benefit 119 31 26% 

 (v)share base payment 119 31 26% 

5 Disclose the nature, amount and 

outstanding balances of related party 

transactions by separate categories for 

each of the following: 

   

 (a) The parent 119 44 37% 

 (b) entities with joint control or 

significant influence over the entity 

119 0 0% 

 (c) subsidiaries 119 52 44% 

 (d) associates 119 50 42% 

 (e) (e) joint ventures in which the 

entity is a venture 

119 0 0% 

 (f) key management personnel of the 

entity or its parent; and 

119 105 92% 

 (g) ) other related parties 119 63 53% 

6 Government-related entity taken 

exemption where the government 

related entity applies the exemption in 

paragraph 25 of IAS 24 (2009); 

   

 (a) The reporting entity shall disclose 

the name of the government. 

119 17 14% 



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 (b) ) Disclose the nature of its 

relationship with the reporting entity 

(i.e. control, joint control or significant 

influence); 

119 17 14% 

 c) Disclose the nature of and amount of 

each individually significant 

transaction in sufficient detail to enable 

users of the entity’s statements to 

understand the effect of related party 

transactions on its financial statement. 

119 13 11% 

 d) Disclose other transactions that are 

collectively, but not individually, 

significant a qualitative or quantitative 

indication of their extent. 

119 0 0% 

Source: Research results 
 

The Nature and Extent of Related Party Transactions by Banks in Ghana 

Answering the second research question (RQ2), findings from the survey of yearly annual 

reports of the banks and other published related articles indicated that the most common related 

party transactions by banks in Ghana are related party loans. These related party loans include 

loans to directors, executives and other employees other than directors. Lending to insiders may 

become a significant source of financial risk to the banks as most of these loans are granted at 

interest rates different from market rates.  

 

Dependent Variable 
To the research question (RQ3), what is the disclosure level of IAS 24 in banks in Ghana; data 

collected from yearly annual reports of thirteen banks for a period of ten years, inference to 

Table 2 indicated that the dependent variable; the extent of compliance with IAS 24, Related 

Party Disclosures had an average score of 30.5%. This implies that the extent of IAS 24 

disclosures among banks in Ghana is moderately low. The findings also indicated a maximum 

compliance level of 63% among some banks and a minimum compliance level of 5%. 

 

Table 2.  Descriptive analysis of disclosure compliance of IAS 24 

Mean  Standard deviation Maximum  Minimum  
30.5% 13% 63% 5% 

Source: Research results 

 

Disclosure Compliance of IAS 24 by Banks 

From the survey of yearly annual reports of the selected banks, compliance on bank basis found 

the following results, inference from Figure 1 shows that Standard Chartered Bank had the 

highest disclosure score of 49% followed by CAL Bank with a score of 48% and Ghana 

Commercial Bank (46%). National Investment Bank had the minimum score of 18%.  



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Figure 1. Disclosure compliance of IAS 24 by banks 

Source: Research results 

 

Table 3. Range of disclosure items with IAS 24, Related Party Disclosures 

 
 CA

L 

GBC EC

B 

AD

B 

AC

B 

SC

B 

RB FB PB SG ZB NI

B 

AT

B 

Total 

TDR per yr 19 19 19 19 19 19 19 19 19 19 19 19 19  

OBS(yrs) 10 10 10 10 8 10 10 10 10 10 10 5 5 118 

TDR (10yrs) 190 190 190 190 152 190 190 190 190 190 190 95 95 2242 

Total 

Disclosed 

items 

91 90 43 50 32 94 46 35 47 66 52 17 22 685 

Disclosure 

index 

0.48 0.46 0.2

3 

0.26 0.21 0.49 0.2

4 

0.1

8 

0.2

5 

0.3

5 

0.2

7 

0.1

8 

0.23 0.305 

Source: Research results 

Independent Variables  

This section answers the research question (RQ4) and discusses the descriptive analysis of the 

firm specific characteristics that influence disclosure compliance of IAS 24; represented as the 

independent variables: Board size, company size, profitability (ROE), Ownership concentration, 

Listing Status and Type of auditor. 

 

Table 4.  Descriptive analysis of independent variables  

 N Mean Maximum Minimum Std. deviation 

BSIZE 118 9.39 15 6 1.612 
CSIZE 118 2.46E+10 1.06E+10 1324350 2.13E+09 

ROE 118 0.22 0.57 -0.27 0.129 
OWN 103 0.48 0.93 0.21 0.189 

Source: Research results 

Regression Analysis and Hypothesis Testing 

The last research question (RQ5) aims to investigate the influence of the firm specific 

characteristics on the level of compliance. This section discusses the regression results of the 

model developed in chapter 3 to test the study hypothesis. Random effect estimation was used to 

generate the regression results after a Hausman test conducted indicated a P>0.05, which implies 

that Random effect regression model is the appropriate method for generating the regression 

results. Table 4 shows the results of the model using the independent variables to explain the 

48% 46%

23% 26%
21%

49%

24%
18%

25%
35%

27%
18%

23%

CAL GCB ECB ADB ACB SCB RB FB PB SG ZB NIB ATB



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level of compliance. The results also indicated that the model used for the analysis is statistically 

significant (Prob (F-stat) = 0.00 < Alpha = 0.05). It can be seen from Table 5 that the R-squared 

is 0.16 and the Adjusted R-squared of is 0.1, this implies that 10% of the variations in the 

dependent variable is explained by the dependent variables. 

 

         Table 5. Regression results 

Dependent Variable: DI 

Method: Panel EGLS (Cross-section random effects) 

Variable Coefficient Std. 

Error 

t-

Statistic 

Prob.   

C 0.088877 0.113592 0.78242 0.4359 

BSIZE 0.011252 0.007254 1.551144 0.1242 

CSIZE 9.97E-12 4.57E-12 2.182805 0.0315 

AUD 0.056791 0.055437 1.024416 0.3082 

ROE 0.033755 0.077444 0.435864 0.6639 

LIST 0.057369 0.040402 1.419969 0.1589 

OWN -0.028606 0.089001 -0.32141 0.7486 

Observations: 103 

R-squared 0.16207 Mean dependent var 0.0655 

Adjusted R-squared 0.1097 S.D. dependent var 0.07236 

S.E. of regression 0.069029 Sum squared resid 0.45744 

F-statistic 3.094678 Durbin-Watson stat 1.18342 

Prob(F-statistic) 0.008174       

Source: E-views 

Hypothesis Testing  

The regression result generated the model shown below. 

 

DI = 0.88877+ 0.011252BSIZE+ 9.97E-12CSIZE+ 0.056791AUD +0.033755ROE 

+0.057369LIST – 0.028606OWN.  

Hypothesis one (H1) predicts that Board size is not significantly associated with the level of RP 

disclosures, in reference to Table 5 Board size coefficient shows a positive relationship with the 

level of RP but does not support at a significant level of 0.05 (P value 0.12 > alpha 0.05), in view 

of this the hypothesis one (H1) is accepted. 

Hypothesis two (H2) predicts that Company size is not significantly associated with the 

compliance level of  RP disclosures, contrary to Table 5 Company size has a positive statistically 

significant relationship with the level of RP disclosures (P=0.03 < Alpha 0.05). This implies that 

a unit increase in the size of the company will increase compliance level by 9.9.  In view of this, 

hypothesis two (H2) is rejected. 

Hypothesis three (H3) predicts that Type of auditor do not have a significant influence on the 

level of RP disclosures, Table 5 indicates that Type of auditor has a positive relationship with the 

level of compliance but proves statistically insignificant, hence hypothesis three (H3) is 

accepted. 



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Hypothesis four (H4) predicts that profitability (ROE) do not have a significant relationship with 

the level of compliance, in reference to Table 5, ROE shows a positive relationship with the level 

of compliance but is statistically insignificant (P=0.30 > Alpha=0.05), hence the null hypothesis 

four (H4) is accepted. 

Hypothesis five (H5) states that Listing Status is not significantly associated with the level of 

disclosure compliance, it can be seen in Table 5 that it is statistically insignificant (P=0.15 > 

Alpha= 0.05), hence hypothesis five (H5) is accepted. 

Hypothesis six (H6) predicts that Ownership concentration do not have a significant  relationship 

with the level of IAS 24 compliance, in reference to Table 5, Ownership concentration is 

negatively associated with the level of compliance and does not support at a significant level (P= 

0.74 > Alpha=0.05). Hence hypothesis six (H3) is accepted. 

 

SUMMARY OF FINDINGS 
The main objective of this research is to assess the level of compliance of Related Party 

Disclosure (IAS 24) by Banks in Ghana. The main objective came along with five specific 

objectives, research questions and hypothesis. The study employed descriptive analysis to 

capture the mean, maximum, minimum and standard deviation of the dependent and 

independents variables. The findings were presented in tables and figures to provide clarity to the 

findings. A panel data regression was conducted using E-views software which enabled the 

hypothesis testing of the study. The study surveyed on 118 annual reports of banks for a period 

of ten years. 

            On the main objective of the study, findings revealed that compliance level of IAS 24, 

Related Party Disclosures had an average score of 30.5% which implies a low level of 

compliance by the selected banks in Ghana. The results also indicate a maximum compliance 

level of 58% and a minimum compliance level of 5%. The study also revealed that Standard 

Chartered Bank Limited had the highest compliance level of 49%, followed by CAL Bank 

Limited (48%) and Ghana Commercial Bank Limited with a score of 46%. Furthermore, the 

study again identified that Fidelity Bank Ghana and National Investment Bank had the lowest 

compliance level of 18%.  

            In relation to the nature and extent of RP transactions in Ghana, findings revealed that the 

most common related party transactions conducted by banks in Ghana is related party loans. 

Thus loans to directors, executives and others staffs other than directors. 

            Results from the self-contracted contracted checklist indicated that the most frequent 

disclosures of IAS 24 by banks in Ghana are transactions with key management personnel 

followed by short term compensation to key management personnel and the disclosure of 

company parent name. Transactions with joint ventures are the least disclosed item. 

            The panel data regression conducted to identify the relationship between the dependent 

and independent variable found that Board size, Type of auditor, Listing status and ROE has a 

positive insignificant relationship with the level of compliance while Company size had 

statistically significant positive relationship with the level of disclosure compliance. Moreover 

Ownership concentration had a negative relationship with the level of IAS 24 compliance and 

was insignificant. 

CONCLUSION 

It can be deduced from the findings of study that compliance level of IAS 24 by banks is poor in 

Ghana. Related party transactions if not properly disclosed can lead to fraudulent activities and if 



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it continues can pose a financial risk to the company. Due to the desire to satisfy statutory rules 

and regulations, the banks do not comprehensively provide adequate information as prescribed 

by the standard IAS 24 and therefore completely ignoring the detailed requirement of the 

standard. Out of the six firm specific characteristics that were identified to influence compliance 

level of the standard (IAS 24), only Company size had a statistically significant impact on the 

level of compliance. The study also identified that all the firm specific characteristics has a 

positive relationship with the level of RP disclosures except Ownership concentration that has a 

negative relationship with RP disclosures. Based on the data collected from the selected banks 

for the study, it can be concluded that Banks in Ghana over the ten year period had an average 

score of 30.5% approximately 31% compliance with IAS 24, Related Party Disclosures.  

            Even though the findings addressed the research questions, the study had some 

limitations. The study initially targeted 130 annual reports from thirteen banks but due to the 

failure of some banks to consistently publish their annual reports, the researchers obtained only 

118 annual reports.  One of the independent variables used for the study; ownership 

concentration were not included at all in the annual reports of one of the selected banks over the 

entire period of study. This same variable was inconsistently disclosed in the annual reports of 

some banks included in the sample. These left the researchers with no other choice than to run 

the analysis of the research on unbalanced data.  

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