Voluntary Disclosure of Graphical Information in Annual Reports: A Case of Government-Linked Companies in Malaysia

Abstract

The disclosure of information in the annual report is one form of communications between management and stakeholders as a way to reduce information asymmetry. This information asymmetry would only be reduced if the information provided can be understood by the users. Thus, the graphical information is able to enhance the communication process accurately and effectively. This study investigates the use of graphs in presenting the selected information in the annual report by government-linked companies (GLCs). Specifically, this study examines the voluntary practice of GLCs in disclosing graphical information in the annual report. This graphical information is said to be much easier to digest as compared to the conventional way of presenting data. The selection of GLCs in this study was made on the basis that the accountability of these companies is higher as compared to other companies as they need to discharge their accountability to the public. The selected data were collected from the annual report for 3 years that were 2013, 2014 and 2015, and the instrument used has been developed in the previous study. There were 30 items or information had been considered in this study. The result shows that in the years 2013 and 2015, all companies in the sample disclosed at least one graphical information in the annual report. A bar chart is the most frequent type of graph used by GLCs. The study has made two important contributions in the areas of accounting research. First, this study provides insight into the practice of corporate reporting in respect of graphical information by GLCs in Malaysia. Second, the result of the study might be used by accounting regulatory bodies to provide a minimum guideline for the GLCs in disclosing graphical information in the annual report.