The extent and determinates of internet corporate reporting by Malaysian listed companies

Abstract: In response to the wave of well-publicized corporate scandals, firms in the US, New Zealand, Singapore and other countries have enhanced its transparency via adoption of Internet technology that provides a new way for firm to make continuous disclosure of corporate information. This is an important and emerging financial reporting issue worldwide as more public listed firms now executive their transaction and events online and prepared online and real-time financial reports. The thesis use online research and content analysis of Internet Corporate Reporting (ICR) for a sample of 100 large public listed firms in Malaysia. Results suggest that the slight majority (59 percent) of these firms have developed and implemented a high-quality ICR whereas highest disclosures and scores for ICR are achieved for accounting and financial attributes and lowest for technology related attributes. The increasing use of ICR creates new challenges to management, regulators, and investors as there is no evidence guidance on thissubject. The finding may also propose that new regulatory guidance in corporate governance lead to improved disclosure via ICR. The thesis also find that no firms use the eXtensible Business Reporting Language (XBRL) platform, thus Malaysian public listed firms should start using the XBRL for their counterparts in the United States will be required to adopt for their financial reporting by 2014. This thesis includes the five papers. In the first paper, agency and signaling theories were used to generate hypotheses regarding the determinants of Internet corporate reporting (ICR). The results of univariate analysis and multiple regressions indicated that among firm characteristics variables only profitability (proxy by return of equity), and among corporate governance mechanisms variables only board size (proxy by number of directors) are significantly associated with the extent of Internet corporate reporting. In the second paper, the result indicates that more than 59 percent of Malaysian public listed firms published reasonably well-developed Internet-based reporting and achieved a quality score for ICR. On average, the frequency of the identified items disclosed by the firms for the content of the Web site was higher than for the presentation of information. In the third paper, examine the level of corporate governance disclosure using the internet as a communication tool in improving Corporate Governance. The results show that the maximum raw score for corporate governance obtained by the firms amounted to 17 (71 percent) of the total possible 24 points. The minimum raw score obtained by the firms is 10 (42 percent). The mean score for the 24 items representing corporate governance disclosure is 13.68 (58 percent). The results indicate that most Malaysian firms recognise the importance of practicing good corporate governance and they fully support the initiatives taken by the regulators to promote good corporate governance in Malaysia. In the fourth paper, examine the level of Corporate Social Responsibility disclosure. The maximum raw score for corporate social responsibility obtained by the firms was 7 (or 88% of the total possible 8 points). The minimum score was 0. The average, corporate social responsibility raw score was 4.79 (or 63%). The finding may also propose that new regulatory guidance in Corporate Social Responsibility lead to improved disclosure via Internet Corporate Reporting. In the fifth paper, the study seeks to determine the important factors that drive Malaysian public listed firms to adopt XBRL by conducting open-ended interviews. The result of this study indicates that the most influential factor is the peer adoption of XBRL imposed by the government and its regulators. At the same time, trading partners too pose as an important factor in the adoption of the XBRL reporting format. This study therefore has implications on the policy-makers, regulators, audit firms, and investors encouraging the adoption of XBRL in Malaysian public listed firms.