| Summary: | The study of outsourcing disclosure is a growing area of research, but all previous studies have focused on developed markets. This study bridges this gap in the literature, making a unique contribution to the knowledge of outsourcing disclosure practices in developing or emerging markets. It investigates the managerial determinants of outsourcing disclosure through formal channels in Saudi Arabia, the consequences of disclosure and non-disclosure for different stakeholder parties, and the disclosure practices used. Two research methods were used: 50 interviews with company managers, accountants and auditors; and content analysis of 985 annual reports of all 175 companies listed on the Saudi stock market, the Tadawul, over the six-year period from 2011 to 2016 inclusive. This twin approach enabled the research to fully explore the extent and trend of outsourcing disclosure in formal channels; the changes in practice over time; the types of outsourced activities disclosed; and the disclosure methods used. The study developed and employed an integrated theoretical framework based on six disclosure theories (agency theory, signalling theory, stakeholder theory, legitimacy theory, preparation costs theory and proprietary costs theory) to interpret the empirical findings. The study revealed significant variations in outsourcing disclosure practices in the Saudi market, and a fluctuating trend of disclosures. Saudi-listed companies were found to disclose three types of outsourced activities in their annual reports: internal auditing, information technology and customer services; and to not disclose two types: marketing activities and operational activities. The study found six managerial determinants of disclosure, and four of non-disclosure. It also identified the implications of disclosure and non-disclosure for managers, outsourced service providers, other stakeholders, and the company itself.
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