Internet Financial Reporting Practices Research Articles

The Role of Corporate Governance in Shaping IFR Practices of Listed Companies in Sri Lanka

Objective – This study investigates the relationship between corporate governance characteristics and Internet Financial Reporting (IFR) in the context of listed companies in the Colombo Stock Exchange (CSE).Design/Methodology – The key metrics for assessing corporate governance characteristics include board size, independence, CEO duality, women in the board, audit committee independence, and ownership concentration. These data were derived from the published annual reports. Employing content analysis, the study measures IFR disclosure using secondary data from the published annual reports of 201 listed companies in Sri Lanka.Results – The mean value of listed companies' IFR disclosure is 50.66% in Sri Lanka. Regression results show that audit committee independence and ownership concentration significantly impact the IFR. However, no statistical evidence supports other variables' significant impact on IFR.Research limitations/implications – This study relies upon only 201 listed firms’ data for a financial year in Sri Lanka and the statistical model includes only five corporate governance-related variables. The study's findings contribute to the reform of corporate governance practices, corporate governance literature, and information asymmetry theory. Moreover, results have practical implications for the composition of the board and audit committee.Novelty/Originality – This study contributes to the existing literature and lays the groundwork for future research by providing new insights into the adoption of IFR practices in Sri Lanka and other similar nations. Examining the impact of corporate governance on IFR practices in listed firms within a developing country sheds light on the significance of corporate governance and IFR.

Measuring Qualitative Characteristics of Internet Financial Reporting: Evidence from Malaysia

As the world economy undergoes a rapid digital transformation, Internet financial reporting (IFR) has evolved into an important platform for the dissemination of information to investors. It has also been a central topic of discussion among practitioners and researchers due to the lack of rigorous regulations to govern IFR practices, resulting in disclosures of financial reports varying across listed companies. This study aims to assess the level of compliance with the qualitative characteristics of IFR for companies listed on Bursa Malaysia. This study involves adopting 34 constructed index items based on prior literature and the use of a 5-point Likert scoring scale anchored from "very poor" (1) to "excellence" (5) to measure the fundamentals and enhance the qualitative characteristics of IFR, which is also in line with the "Revised Conceptual Framework for Financial Reporting" issued by the Malaysian Accounting Standards Board (MASB) in 2018. Non-probability purposive sampling was employed to select the companies from 11 relevant industries, comprising 160 listed companies from the main market of Bursa Malaysia. Annual reports and corporate governance statements were extracted from corporate websites for 2018. Findings suggest that most corporations that are listed in the main market of Bursa Malaysia have yet to fully comply with the MASB’s financial reporting framework, notably timeliness, which requires urgent improvement. Without strict IFR regulations, managers may also be free to act opportunistically by planning their IFR disclosure in a way that benefits both the company's reputation and their interests. This research enriches the body of literature on IFR and provides a measuring mechanism that can gauge the level of compliance with the qualitative characteristics of IFR. It acknowledges the importance of collective efforts from regulatory bodies to implement accounting reforms and the best IFR governance practices to harness information's usefulness in the Industrial Revolution era. 4.0.

The impact of internet financial reporting on Egyptian company’s performance

Purpose This study aims to examine the impact of internet financial reporting (IFR) on companies’ performances as measured by three performance indicators, namely, stock price, stock returns and company value. Design/methodology/approach A sample of 139 non-financial companies listed in the Egyptian stock exchange is used and classified as 108 IFR companies and 31 non-IFR companies. To test the research hypotheses, an independent t-test and multiple linear regression analyses are used. Findings The results indicate that there are no significant differences between IFR companies and non-IFR companies for both stock price and stock return variables. Conversely, there is a significant difference between IFR companies and non-IFR companies in the company value variable. These results imply rejecting hypotheses H1 and H4 and accepting the hypothesis of H7 that the presence of IFR has an impact on company value. The multiple regression analyses results indicate a significant relation between the scope of IFR and stock price. Likewise, between the degree of IFR and company value. Both degree and scope of IFR have an insignificant impact on stock return, which infer that applying different performance measures can reveal different conclusions. Research limitations/implications This research is a snapshot of IFR limited to a cross-sectional study and could not study the longitudinal data of internet reporting. Second, Marston and Polei (2004) contend that “weights contain an element of subjectivity, which cannot be completely avoided in the composition of such a score” (p. 297) and a variation in the disclosure index can lead to a modification in the results (Kaur and Kaur, 2020). This research applied a weighted index to measure the degree of IFR, which may affect the results and may change it if other indexes are applied. Moreover, the scores of the degree and scope of information disclosure are assumed to be similar every year due to the lack of information regarding the variations in content and presentation in the companies’ websites. Finally, the absence of a complete data set and stock prices for some companies in the sample. Practical implications To enhance the quantity and quality of IFR could be implemented through setting regulations and standards to govern IFR practices companies in Egypt. Moreover, the trade-off of the requirement of the Egyptian Financial Supervisory Authority for Egyptian companies make information available online and the secrecy culture profound in the Egyptian society (Ahmed et al., 2015) involve assigning a regulatory body for monitoring the IFR practices to ensure disseminating timely and accurate information that helps investors make rational decisions. Social implications The researchers recommend the suggestion to have an external assurance conducted by external auditors to enhance the accuracy and credibility of the IFR information. Originality/value Based on prior literature, no studies in Egypt compare between IFR companies and non-IFR companies concerning stock price and company value as measured by Tobin’s Q. Moreover, few research studies in Egypt covered the degree of IFR disclosure whilst not addressing the impact on the stock price. In addition, no prior study examined the scope of IFR disclosure in Egypt. Therefore, the research findings attribute to literature.

Internet Financial Reporting Practices in Saudi Arabia

This paper examines the firm characteristic and corporate governance determinants of Internet Financial Reporting (IFR) practices in Saudi Arabia to help address the paucity of research for MENA region firms. The paper employs manual content and regression analyses of online annual report data for Saudi listed firms for the year 2018 using 28 IFR disclosure items. The results show that Saudi firm IFR has increased over time compared to previous studies to an average of 85% disclosure as a result of IFRS implementation and new corporate governance regulations. Firm size is a positive determinant of IFR disclosure, firm age and ownership concentration are negative drivers. Further, the extent of IFR disclosure varies by industry type, while profitability, liquidity, leverage, board size, board independence and role duality have no impact on IFR disclosure. Employing agency and signalling theories, the paper determines the influence of firm characteristics and corporate governance on IFR, identifying implications for stakeholders, and providing some evidence on the impact of IFRSs and corporate governance regulation on such disclosure. Further, the paper provides additional insight into progress towards Saudi’s Vision 2030.

Country- specific characteristics influencing Websites based information disclosure practices

This paper aims to examine and explain the Websites- based financial disclosure practices differences between developed European countries. The development of Internet financial reporting (IFR), as a new corporate reporting practice, was rapidly exploited by large listed companies in the world. A number of accounting research was analyzed the development of online reporting in various countries and they showed that firm specific incentives are the most important factors explaining the IFR practices, however, there was ignored the importance from the politico-socio conditions, as others factors influencing the IFR practices differences (as a accounting practices). As a refinement of Gray (1988)’ framework and an extension of Debrency et al. (2002) model, this study explore an empirical investigation validating the influence of culture, institutional factors on the financial disclosure level through corporate Websites in France, Germany, Italy, Netherlands, Spain and UK. It reveals the importance of technological and media presentation format as Web- based communication index component. The findings showed that environmental factors were significantly related to Websites technology index and economic development is an important factor determining the Websites financial disclosure practices differences.

Exploring government internet financial reporting in Indonesia

Government financial reporting as public accountability and transparency is important. Previous research show that almost all local government in Indonesia have their official website, which is active use as presenting news, local potentials, and local government services. Unfortunately, there are still limited local governments which are disclose their financial information as well as budgeting reports and financial statements on their websites. This research aims to explore whether political competition, local asset, local dependency, population density, and information openness award have influenced IFR practice in government in Indonesia. We investigate financial report and budget report as of internet financial reporting (IFR) data of 32 provincial government websites. Indonesia consists of 34 provinces, which are 32 provincial websites consistently accessible and use as sample in this research. The empirical results show that local dependency toward central government and Information Openness Award positively significant influence IFR practices in provincial level in Indonesia. There is no significant influenced of political competition, local asset and population density to IFR in Indonesia Provinces website. Our research contribution is to extend previous research by concerning Information Openness Award as independent variable which influenced to IFR practice in local government.

Internet Financial Reporting dan Faktor-Faktor yang Mempengaruhinya Pada Pemerintah Kota dan Kabupaten Di Indonesia

This research identifies factors affecting the publication of financial reports in the internet or known as internet financial reporting (IFR) after the issuance of Home Minister Instruction No. 188.52/1797/SJ year 2012 on Improving Transparency of Local Budget Management. One hundred and seventy five cities and regencies were selected as samples based on purposive sampling and analysed by using multiple regression. The result shows that political competition and size of local government asset has positive influence on the IFR. This indicates that Heads of local government whose political party is not majority and Heads of local government with greater asset size, had used IFR as media to show their performance to the public. This is consistence with stewardships theory that asymmetric information between local government (stewards) with the public (principals) can be reduced through accountability and transparency of financial management whereby the pressure and ability to do it appeared significantly in local governments with high political competition and with relatively greater asset. In this research, some other potential factors such as leverage, own-source revenue, type of local government (city or regency) and audit opinion are not proven to influence the IFR practices in the local governments.

Determinants of internet financial reporting in African markets: the case of Mauritius

The Internet has revolutionized the way individuals and companies access and share information. Companies can now disseminate more information on a timely manner to stakeholders. Using mixed theoretical perspectives on corporate reporting including legitimacy, stakeholder, and signalling theories, this study investigates the extent and determinants of corporate reporting on the Internet by firms listed on the official market of the Stock Exchange of Mauritius (SEM). We use content analysis to examine information disclosed on firms’ websites. Data is collected from 34 companies’ websites including includes companies on the Official Market of the SEM. A disclosure index consisting of 52 items (mandatory and voluntary items) is constructed based on previous studies and adapted to the Mauritian context is used to measure the extent of Internet Financial Reporting (IFR). The results indicate that company size, board size, and liquidity are significant explanatory variables for the level of IFR. However, we find no significant relationship between other variables (leverage, profitability, and audit quality) and the level of IFR. To the best of our knowledge, no prior studies on drivers of IFR in Mauritius is available. Therefore this study contributes to the scarce literature on IFR in the African region and Mauritius. The findings of this study are expected to benefit several stakeholders including firms, legislators, and investors. It provides a broader picture of the characteristics of firms which use the Internet to report financial and non-financial information. Firms subject to the study can benchmark their IFR practices with the average of all firms and take appropriate actions to enhance their visibility to investors. Regulators and legislators can compare the IFR performance of Mauritian listed companies with emerging stock markets to issue guidelines for enhancing disclosure on the Internet. Investors require information to make informed investment decisions. The findings of this study can guide them as to which corporate characteristics are associated with higher Internet disclosures, thus saving them time in screening investment options.

A Survey of Internet Financial Reporting in Egypt

Internet financial reporting (IFR) is fast becoming the norm in most western countries, however little is known about IFR practices in developing countries. This paper investigates the extent and variety of practices of internet financial reporting (IFR) by companies listed in the Egyptian Stock Market (CASE). This paper attempts to add to the literature on IFR by providing evidence of IFR practices in Egypt. Out of 213 companies which is the number of companies listed in 2010 the 100 companies in index EGX 100 were investigated to ascertain whether they maintain websites and/or if these sites are being used for communicating financial information. Only 36 of the listed companies on EGX 100 were found to operate websites, with even less (only twenty nine) engaging in IFR. However, IFR is not restricted to the publication of annual financial statements only as the companies also disclose financial highlights through their websites. The results of this study indicate that IFR is still at an embryonic stage in Egypt and there are lots of opportunities and challenges for all stakeholder parties in corporate reporting.

Determinants of Internet Financial Reporting Practices: Evidence from the UAE

The objective of this paper is to undertake an in-depth study of the Internet financial reporting (IFR) practices of UAE-listed companies. The survey is aimed at identifying IFR versus non-IFR companies, and the nature and extent of their IFR practices. Logistic regression analysis was undertaken to establish the determinants of IFR by the companies.The findings of this study identify the size, the leverage, industry sector, and profitability as the most important predictors of IFR adoption by UAE listed-companies. Larger companies with greater leverage are more likely to set up a website and use it for IFR than smaller less leveraged ones. It was noticed that 62% of IFR companies is from banking, investment & finance sector and from insurance sector as well.This study is expected to inform monetary authorities on this subject and give more support to these two industries, as they were peers for other sectors in the UAE. Furthermore, the outcome of this paper will provide policy-makers with insight into the factors that motivate IFR among corporate organizations.

Benefits of internet financial reporting in a developing countries: Evidence from Malaysia

The use of the internet as a new platform for dissemination of corporate information is a recent, fast growing phenomenon and is expanding rapidly. Corporate information includes records of historical and financial data, descriptions of activities, information of the company, exposition of current situation and future plans, etc., that can be in multiple formats via website. Most early Internet Financial Reporting (IFR) research are either descriptive studies and exploratory in nature, or association studies addressing the determinants of IFR. IFR is known as new medium and technology which has been introduced in the area of financial reporting or disclosure. However, little attention has been given to investigate the attitudes and preferences of preparers of financial information especially in the Malaysian context. Therefore, this paper focuses on investigating the perceptions of preparers of financial information by using a survey mailed questionnaire. The findings of this study suggested three main benefits to companies that engage in IFR: attract foreign investors, promote company to the public, and attract local investors. The findings also revealed that three main benefits to the users who collect financial information of companies via their website are: increases timeliness and efficiency in obtaining financial information, helps users in the decision making process and provides another medium of disclosure. In conclusion, this study makes a positive contribution to enhancing our knowledge of IFR and disclosure practices in emerging capital markets, and provides a basis for the conduct of future research. Key words: Benefit, preparers, financial statements, internet financial reporting, Malaysia.

Voluntary internet financial reporting practices of listed companies in the United Arab Emirates

PurposeThe purpose of this paper is to investigate the use of the internet as a channel for voluntary communication of financial information by companies listed on two stock exchanges in the United Arab Emirates (UAE). It aims to focus on the extent and variety of internet financial reporting (IFR) by these companies. While IFR has become standard practice, rather than the exception, in most western countries, empirical evidence of the phenomenon in the Middle East region is only just emerging. This paper seeks to contribute to the literature by providing evidence of voluntary use of IFR for communication of financial information by UAE‐listed companies.Design/methodology/approachThe 132 companies listed on the Abu Dhabi Securities Exchange (67) and the Dubai Financial Market (65) in the UAE were investigated to ascertain whether they maintain websites; and if so, whether these sites are being used as a channel for voluntary communication of corporate financial information.FindingsWhile about 87 percent of UAE‐listed companies were found to operate websites, only 88 of these companies (about 67 percent) use their websites to communicate financial information. However, IFR is not restricted to the publication of annual financial statements only as the companies also disclose financial highlights through their websites using a variety of formats including PDF, flash and html.Practical implicationsThe results of this study indicate that, similar to other Middle Eastern countries, IFR is still at an embryonic stage in the UAE and there are considerable opportunities and challenges for all stakeholder parties in corporate communication and reporting. Regulatory authorities may need, at this early stage of development of IFR practices, to develop and establish effective strategies to ensure standard and consistent use of this channel of financial information communication for the benefit of all stakeholders.Originality/valueThe study highlights the challenges and opportunities for IFR in the Middle East Region, where it has been sparsely studied. In particular, it focused on the UAE, where literature on IFR practices is, to the best of the authors’ knowledge, not yet available.

The voluntary disclosure of internet financial reporting (IFR) in an emerging economy: a case of digital Bangladesh

PurposeThe present study seeks to paint the current state of voluntary disclosure of internet financial reporting (IFR) in Bangladesh as an example of an emerging economy and to investigate empirically some company characteristics as determinants of such practice.Design/methodology/approachUsing a sample of 83 listed companies in Bangladesh in the year 2009 and the disclosure index of Deller et al., Marston, Xiao et al. and Marston and Polei and comments from the users and investors of Bangladesh, the study employs statistical analysis to investigate the association between a number of company characteristics and the extent of voluntary disclosure of IFR.FindingsThe findings revealed that only 29.12 percent (83) companies had web sites out of the 285 listed companies and only 33.34 percent (28) companies' provided financial information. Out of seven variables, only big audit firms and non‐family ownership variables were significantly associated with the levels of voluntary disclosure. Another important result revealed that despite the mandatory requirements of having audit committee in Bangladesh, the companies without the audit committee were disclosing voluntary information more and it raised the question on the lack of regulatory enforcement in Bangladesh.Research limitations/implicationsThe scope of this study is limited to a single country; it would be interesting to replicate this study to a group of emerging countries which have many similarities to the Bangladesh environment.Originality/valueTo the best of the authors' knowledge, no studies have been conducted on IFR in a South Asian emerging country, in particular Bangladesh. The study also is the first of its kind to examine the whole population of a period in any country which enhances contribution to IFR literature. Unlike the prior studies conducted in emerging countries, the study contributes not only to the present state of IFR by the listed companies in Bangladesh but also the connectivity problem between the dream and reality of the digital Bangladesh concept. The study also finds that the companies' IFR practices are not influenced by “Digital Bangladesh” concept.

Users’ Perceptions on Internet Financial Reporting Practices in Emerging Markets: Evidence from Jordan

This study seeks to explore the perceptions of users regarding Internet financial reporting (IFR) practices in Jordan. A questionnaire survey of 200 possible participants of four different user-groups was conducted to investigate their perceptions regarding the usefulness and usability of IFR as a source of information in Jordan. 114 received responses were analysed using the Kruskal-Wallis test, and the analysis revealed that there is a strong agreement among the respondents on IFR being useable, accessible and available any time and from anywhere as a source of information for users’ decision making in Jordan. However, users’ perceptions regarding usefulness of IFR in decision making significantly differed. They addressed economic factors such as the cost of having Internet access and the cost of printing accounting information as two concerns regarding the future of IFR in Jordan. They also clarified that the traditional copy of the annual report is still the preferable source of accounting information for Jordanian users.

Is E-Government Promoting Convergence Towards More Accountable Local Governments?

ABSTRACT This article analyzes how extensively European Union local governments are using their websites to disseminate financial information in order to evaluate whether electronic-government (e-government) is promoting convergence towards more accountable local governments. We also posit and test various hypotheses about the influence of internal and contextual factors on Internet financial reporting (IFR) practices. Results show that the public administration style, the size of the city, and the audit of financial information by private firms are significant explanatory factors of IFR practices. Our findings also suggest that multilateral organizations are overly optimistic about the possible convergence in transparency and financial accountability through the use of common modes of IFR. That is, the introduction of information and communication technologies without the corresponding institutional reform is leading to limited success of IFR.

Internet Financial Reporting (IFR) in the GCC: extent and practices

Internet Financial Reporting (IFR) is fast becoming the norm in most western countries; however, little is known about IFR practices in developing countries. This paper investigates the extent and variety of practices of IFR by companies listed on the Muscat Securities Market (MSM) in Oman and the Bahrain Stock Exchange (BSE) in Bahrain. This paper attempts to add to the literature on IFR by providing evidence of IFR practices in Oman and Bahrain. The 142 companies listed on the MSM and 51 companies listed on the BSE are investigated to ascertain whether they maintain websites and/or if these sites are being used for communicating financial information. Only 124 of the listed companies on both markets are found to operate websites, with even less (only 63) engaging in IFR. However, IFR is not restricted to the publication of annual financial statements only as the companies also disclose financial highlights through their websites. The results of this study indicate that IFR is still at an embryonic stage in Oman and Bahrain, and there are lots of opportunities and challenges for all stakeholder parties in corporate reporting.

A survey of Internet Financial Reporting in Qatar

Research reveals that there is little empirical evidence of the internet financial reporting (IFR) phenomenon in the Gulf Co‐operation Council (GCC) region. This paper attempts to fill some of the gap in our knowledge of IFR practices in Qatar. Specifically, the purpose of this paper is two‐fold. First, it documents the extent and variety of practices of IFR by the 43 companies listed on the Doha Securities Market (DSM). Second, it seeks to examine the key factors that affect the engagement of IFR by the DSM‐listed companies. The findings of the descriptive analysis indicate that 39 of the 43 listed companies operate websites, of which only 28 provide financial information on their websites. Of these 28 companies, 25 provide a complete set of financial statements (including footnotes and the auditor’s report) for two‐year periods or more. The results also show that the majority of the Qatari companies (25 out of 28) use the PDF format to disclose their financial information, and few companies choose to use the internet to provide additional financial highlights, in the form of HTML and MS PowerPoint. The empirical analysis also finds a significant relationship between the engagement of IFR and company size, profitability, and ownership structure. The overall conclusion is that there is a seemingly limited use of the internet for IFR purpose and that IFR is still at an embryonic stage in Qatar, with many opportunities and challenges for all stakeholder parties in corporate reporting. The applicability and implications of the underlying research findings should be of value to the accounting regulators and standard‐setters in the region, particularly the Gulf Co‐operation Council Accounting and Auditing Organization (GCCAAO). The overall findings justify, in the very least, a wider and more detailed study by GCCAAO of important issues such as the major audit implications of IFR and the state of regulation on IFR in the GCC region.

A survey of internet financial reporting in Oman

PurposeThe purpose of this paper is to investigate the extent and variety of practices of internet financial reporting (IFR) by companies listed on the Muscat Securities Market (MSM) in Oman. While IFR is fast becoming the norm in most western countries, there is little empirical evidence of the phenomenon in the Middle East region. This paper attempts to fill some of the gap in the literature by providing evidence of IFR practices in Oman.Design/methodology/approachThe 142 companies listed on the MSM were investigated to ascertain whether they maintain websites and/or if these sites are being used for communicating financial information.FindingsOnly 84 of the listed companies were found to operate websites, with even less (only 31) engaging in IFR. However, IFR is not restricted to the publication of annual financial statements only as the companies also disclose financial highlights through their websites.Practical implicationsThe results of this study indicate that IFR is still at an embryonic stage in Oman and there are lots of opportunities and challenges for all stakeholder parties in corporate reporting.Originality/valueThe study highlights the challenges and opportunities for IFR in the Middle East Region, as well as a number of areas for further study.

A Survey of Internet Financial Reporting in Bahrain

This paper investigates the extent and variety of internet financial reporting (IFR) by companies listed on the Bahrain Stock Exchange (BSE). While IFR is fast becoming the norm in western countries, there is little empirical evidence of the phenomenon in the Middle East. This paper attempts to fill some of the gap in the literature by providing evidence of IFR practices in Bahrain. The 49 companies listed on the BSE were investigated to ascertain whether they maintain websites and/or if these sites are being used for communicating financial information. Only 40 companies were found to operate websites, with only 27 engaging in IFR. The results indicate that IFR is spreading in Bahrain and there are many opportunities and challenges for all stakeholders in corporate reporting. The study highlights the challenge si opportunities for IFR in the Middle East, as well as a number of areas for further study.

Corporate Reporting on the Internet

In this paper, we examine firms' use of the Internet to enhance the relevance of their financial reporting. We define a firm as practicing Internet Financial Reporting (IFR) when it provides in its web site either (1) a comprehensive set of financial statements (including footnotes and the auditors' report), (2) a link to its annual report elsewhere on the Internet or (3) a link to the U.S. Security and Exchange Commission's (SEC) Electronic Data Gathering, Analysis and Retrieval (EDGAR) system. While 70 percent of the firms in our sample engage in IFR, we find substantial variation in the quality of firms' IFR practices. Specifically, the variations in quality pertain to the timeliness and therefore, the usefulness of firms' financial reporting on the Internet. We find that some firms provide more timely financial disclosures via the Internet (e.g., monthly sales) while other firms report outdated financial data (e.g., two-year old annual reports). We also observe that the usefulness of firms' financial reporting on the Internet depends on how easy it is to access that data, the amount of data disclosed and/or whether users can download or analyze the data. To substantiate firms' incentives for engaging in IFR, we sent surveys to firms with web sites in our sample and asked them to report their perceived costs and benefits related to establishing an Internet presence. Firms responded to our questions about why they established an Internet presence by indicating that they perceive their web sites to be an important vehicle to disseminate information to shareholders. After documenting how and why firms use the Internet to voluntarily disclose financial information, we develop the implications of such practices for consumers who demand financial information, firms that supply financial data, auditors and market regulators.