Abstract
This study examines the perceptions of preparers of financial reports towards the issues surrounding corporate quarterly financial reporting in Malaysia. Questionnaires were mailed to chief financial officers of the Kuala Lumpur Stock Exchange (KLSE)1 listed companies, from whom 106 usable responses were gathered. The findings provide evidence that some preparers are not keen of the idea of quarterly reporting, despite the enforcement of the requirement. However, a majority of preparers are content with the current allowable reporting lag of two months, satisfied with the current content of the quarterly reports, and agree that management should at least discuss the quarterly results with the auditors. With respect to other matters, preparers expressed the view that the quarterly reports are reliable. However, there is also evidence that the first three quarterly reports are perceived to be less reliable than the fourth quarterly reports. The findings serve as an avenue for more research on quarterly financial reporting in Malaysia and other jurisdictions.
Highlights
In line with the increasing complexity of business operations, investors are making greater demands for relevant and timely information
The findings provide evidence that preparers are about divided between the idea of quarterly reporting and a less frequent reporting
As far as the contents of the quarterly reports are concerned, a majority of the preparers are satisfied with the current content of the quarterly reports, that is, as prescribed under the Kuala Lumpur Stock Exchange (KLSE) Listing Requirements before the 2002 amendments
Summary
In line with the increasing complexity of business operations, investors are making greater demands for relevant and timely information. Today we see that interim financial reporting has been required by various stock exchanges throughout the world, with the objective of providing users with timely and high quality financial information in making informed financing and investing decisions. Interim financial reporting was claimed by the financial analysts worldwide to be an important source of information in making decisions (Deppe 1994, Razani 2000). It is argued that forecasts of earnings and share prices would be more accurate when interim reports are produced in addition to the annual reports (IASC 1998). Such timely information would enhance investors’ confidence in the capital market, reduce uncertainties and help improve users’ decisions (Capulong et al 2000)
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