Abstract
This paper investigates whether the internet financial disclosure can be explained by a company’s characteristics and the dominant personalities in board committees of the Malaysian listed companies. Ten hypotheses were tested using data collected from 194 Malaysian listed companies’ websites. Specifically, this paper examines the relationship between the internet financial disclosures (IFD) and the variables, namely internationality, leverage, foreign shareholders, level of technology, firm age, number of shareholders, listing status, dominant personalities in the audit committee, and chairmen of audit and nomination committees. It is found that the level of technology, firm age, number of shareholders and listing status significantly affect the level of IFD. However, the dominant personalities in the audit and nomination committees affect negatively the level of IFD in Malaysia. The study provides some evidence to support the signaling theory and the cost and benefit hypothesis in relation to internet disclosure.
Highlights
Since the 90s, companies have been utilizing the Internet as a medium to disclose their information
With the inconsistent results of firm age, this study aims to examine this variable by counting the number of operating years since the company was listed on the stock exchange
This paper examines the relationship between ten variables under two groups and the extent of internet financial disclosures (IFD) by Malaysian - listed companies
Summary
Since the 90s, companies have been utilizing the Internet as a medium to disclose their information. The level of Internet disclosure varies between companies worldwide. This phenomenon has attracted many academic researchers in the disclosure field. It is argued that Internet reporting is the efficient instrument to communicate information to external users at a minimum cost. Information on the Internet can be presented in different forms of dynamic presentations such as draws, multimedia, audio, video and others (Ettredge, Richardson & Scholz, 2002; Ashbagh, Johnstone & Warfield, 1999; Al-Htaybat, Von & Hutaibat,2011; Dâmaso & Lourenço, 2011). It has been argued that some company characteristics play a significant role on the level of internet financial reporting in different countries The board of directors has a significant impact on the level of financial reporting as they are the decision-makers
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