Prabandhan: Indian Journal of Management

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Drivers of Mandatory and Non-Mandatory Internet Corporate Reporting in Public and Private Sector Indian Companies


Affiliations
1 Department of Commerce, School of Commerce, Finance and Accountancy, Christ (Deemed to be University), Bangalore - 560 029, India
     

   Subscribe/Renew Journal


The paper’s objective was to measure the drivers of mandatory and non-mandatory internet corporate reporting by public and private sector companies following the internet disclosure compliance of listing and obligation requirement of SEBI under Clause 46. Several drivers, namely firm size, profitability, leverage, liquidity, board size, independence of board, and CEO duality, were used to measure the effectiveness of mandatory and non-mandatory disclosure. A multiple regression model was applied to test the present paper’s hypotheses. The results of multiple regression revealed that the firm’s size was exceptionally important for both sectors. In contrast, public sector disclosure was largely impacted by leverage, liquidity, board size, and board independence. In comparison, the private sector disclosure scores were mainly impacted by leverage and board size, although there is no relationship between ICR and firm profitability and CEO duality. In performing separate multivariate regression between the two sectors, many disparities emerged. This disparity showed that public and private sector corporations had quite different firm and governance characteristics of the disclosure. As the first exploratory research to assess the mandate internet disclosure of public and private sector companies in India, it is very informational, specifically for those working on Indian companies’ regulation, compliance, and research.

Keywords

Internet Corporate Reporting, Disclosure, Regulation, SEBI.

JEL Classification Codes : M41, M48, L33

Paper Submission Date : June 9, 2022 ; Paper sent back for Revision : November 25, 2022 ; Paper Acceptance Date : November 30, 2022 ; Paper Published Online : December 15, 2022

User
Subscription Login to verify subscription
Notifications
Font Size

  • Ahmed, A. H., Burton, B. M., & Dunne, T. M. (2017). The determinants of corporate internet reporting in Egypt: An exploratory analysis. Journal of Accounting in Emerging Economies, 7(1), 35–60. https://doi.org/10.1108/JAEE-04-2015-0024

  • Alnabsha, A., Abdou, H. A., Ntim, C. G., & Elamer, A. A. (2018). Corporate boards, ownership structures and corporate disclosures: Evidence from a developing country. Journal of Applied Accounting Research, 19(1), 20–41. https://doi.org/10.1108/JAAR-01-2016-0001

  • Aly, D., Simon, J., & Hussainey, K. (2010). Determinants of corporate internet reporting: Evidence from Egypt. Managerial Auditing Journal, 25(2), 182–202. https://doi.org/10.1108/02686901011008972

  • Arora, A. K., & Rathi, P. (2019). Determinants for the adoption of digitalization by manufacturing SMEs in India: An empirical study. Prabandhan: Indian Journal of Management, 12(8), 7–21. https://doi.org/10.17010/pijom/2019/v12i8/146410

  • Arul, P. G. (2010). Corporate governance in India: Is an independent director a guardian or a burden? Prabandhan: Indian Journal of Management, 3(8), 16–24, https://doi.org/10.17010/pijom/2010/v3i8/60956

  • Ashbaugh, H., Johnstone, K. M., & Warfield, T. D. (1999). Corporate reporting on the Internet. Accounting Horizons, 13(3), 241–257. https://doi.org/10.2308/acch.1999.13.3.241

  • Boubaker, S., Lakhal, F., & Nekhili, M. (2012). The determinants of web?based corporate reporting in France. Managerial Auditing Journal, 27(2), 126–155. https://doi.org/10.1108/02686901211189835

  • Bowrin, A. R. (2015). Comprehensiveness of internet reporting by Caribbean companies. Journal of Accounting in Emerging Economies, 5(1), 2–34. https://doi.org/10.1108/jaee-08-2011-0028

  • Cooke, T. E. (1989). Voluntary corporate disclosure by Swedish companies. Journal of International Financial Management & Accounting, 1(2), 171–195. https://doi.org/10.1111/j.1467-646x.1989.tb00009.x

  • Cormier, D., Ledoux, M.-J., & Magnan, M. (2009). The use of web sites as a disclosure platform for corporate performance. International Journal of Accounting Information Systems, 10(1), 1–24. https://doi.org/10.1016/j.accinf.2008.04.002

  • Debreceny, R., Gray, G. L., & Rahman, A. (2002). The determinants of internet financial reporting. Journal of Accounting and Public Policy, 21(4–5), 371–394. https://doi.org/10.1016/s0278-4254(02)00067-4

  • Deloitte. (2019). Crunch time 7 : Reporting in a digital world. https://www2.deloitte.com/za/en/pages/financial-services/articles/digital-technologies-to-improve-reporting-process.html

  • Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. The Journal of Law & Economics, 26(2), 301–325. https://doi.org/10.1086/467037

  • Gandía, J. L. (2008). Determinants of internet-based corporate governance disclosure by Spanish listed companies. Online Information Review, 32(6), 791–817. https://doi.org/10.1108/14684520810923944

  • Giannarakis, G. (2014). The determinants influencing the extent of CSR disclosure. International Journal of Law and Management, 56(5), 393–416. https://doi.org/10.1108/ijlma-05-2013-0021

  • Haniffa, R. M., & Cooke, T. E. (2002). Culture, corporate governance and disclosure in Malaysian corporations. Abacus, 38(3), 317–349. https://doi.org/10.1111/1467-6281.00112

  • Jensen, M. C. (1993). The modern industrial revolution, exit, and the failure of internal control systems. The Journal of Finance, 48(3), 831–880. https://doi.org/10.2307/2329018

  • Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm : Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X

  • Kamalluarifin, W. F. (2016). The influence of corporate governance and firm characteristics on the timeliness of corporate internet reporting by top 95 companies in Malaysia. Procedia Economics and Finance, 35, 156–165. https://doi.org/10.1016/s2212-5671(16)00020-4

  • Kaur, N., & Arora, R. S. (2013). An empirical investigation of the association between company attributes and disclosure score of Indian companies. Indian Journal of Finance, 7(9), 44–54. https://www.indianjournaloffinance.co.in/index.php/IJF/article/view/72093

  • Kelton, A. S., & Yang, Y.-W. (2008). The impact of corporate governance on internet financial reporting. Journal of Accounting and Public Policy, 27(1), 62–87. https://doi.org/10.1016/j.jaccpubpol.2007.11.001

  • Khlifi, F. (2022). Re-examination of the internet financial reporting determinants. EuroMed Journal of Business, 17(4), 519–549. https://doi.org/10.1108/EMJB-10-2020-0115

  • Kim, K., & Nofsinger, J. (2007). Corporate governance (2nd ed). Pearson Education.

  • Masum, M. H., Latiff, A. R., & Osman, M. N. (2020). Determinants of corporate voluntary disclosure in a transition economy. Problems and Perspectives in Management, 18(4), 130–141. http://dx.doi.org/10.21511/ppm.18(4).2020.12

  • Morris, R. D. (1987). Signalling, agency theory and accounting policy choice. Accounting and Business Research, 18(69), 47–56. https://doi.org/10.1080/00014788.1987.9729347

  • Patel, S. A., Balic, A., & Bwakira, L. (2002). Measuring transparency and disclosure at firm-level in emerging markets. Emerging Markets Review, 3(4), 325–337. https://doi.org/10.1016/s1566-0141(02)00040-7

  • PwC. (2017). Global investor survey. https://www.pwc.com/gx/en/ceo-survey/2017/industries/pwc-global-investor-survey-feb2017.pdf

  • Rajpurohit, P. D., & Rijwani, P. R. (2020). Financial reporting practices and internal corporate governance mechanisms in emerging markets. Prabandhan: Indian Journal of Management, 13(8–9), 8–27. https://doi.org/10.17010/pijom/2020/v13i8-9/155230

  • Samaha, K., & Abdallah, S. (2012). Further evidence on web-based corporate disclosures in developed versus developing countries: A comparative analysis of nature and determinants in Egypt and the United Kingdom. International Journal of Disclosure and Governance, 9, 148–180. https://doi.org/10.1057/jdg.2011.17

  • Samanta, P., & Dugal, M. (2016). Basel disclosure by private and public sector banks in India: Assessment and implications. Journal of Financial Regulation and Compliance, 24(4), 453–472. https://doi.org/10.1108/jfrc-12-2015-0065

  • Sandhu, A., & Singh, B. (2019). Board composition and corporate reporting on internet: Indian evidence. Journal of Financial Reporting and Accounting, 17(2), 292–319. https://doi.org/10.1108/JFRA-05-2017-0031

  • Schuster, P., & O'Connell, V. (2006). The trend toward voluntary corporate disclosures. Management Accounting Quarterly, 7(2), 1 – 9.

  • Securities and Exchange Board of India. (2015). Securities and Exchange Board of India (Listing obligations and disclosure requirements) regulations, 2015. https://www.sebi.gov.in/sebi_data/attachdocs/1441284401427.pdf

  • Serrano-Cinca, C., Fuertes-Callén, Y., & Gutiérrez-Nieto, B. (2007). Online reporting by banks: A structural modelling approach. Online Information Review, 31(3), 310–332. https://doi.org/10.1108/14684520710764096

  • Sharma, N. (2013). Theoretical framework for corporate disclosure research. Asian Journal of Finance & Accounting, 5(1). https://doi.org/10.5296/ajfa.v5i1.3210

  • Shukla, A., & Gekara, M. G. (2010). Corporate reporting in modern era: A comparative study of Indian and Chinese companies. Indian Journal of Finance, 4(10), 8–16. https://www.indianjournaloffinance.co.in/index.php/IJF/article/view/72561

  • Singh, H., & Singh, A. (2018). Board efficiency and internet reporting quality: An empirical study of Indian public sector giants. IUP Journal of Accounting Research & Audit Practices, 17(4), 35–50.

  • Singh, M. (2011). Corporate reporting on the internet: A study of selected Indian companies. International Journal of Marketing and Management Research, 2(8), 19–36.

  • Uyar, A. (2012). Determinants of corporate reporting on the internet: An analysis of companies listed on the Istanbul Stock Exchange (ISE). Managerial Auditing Journal, 27(1), 87–104. https://doi.org/10.1108/02686901211186117

  • Wallace, R. S., & Naser, K. (1995). Firm-specific determinants of the comprehensiveness of mandatory disclosure in the corporate annual reports of firms listed on the stock exchange of Hong Kong. Journal of Accounting and Public Policy, 14(4), 311–368. https://doi.org/10.1016/0278-4254(95)00042-9

  • Xiao, J. Z., Yang, H., & Chow, C. W. (2004). The determinants and characteristics of voluntary Internet-based disclosures by listed Chinese companies. Journal of Accounting and Public Policy, 23(3), 191–225. https://doi.org/10.1016/j.jaccpubpol.2004.04.002

  • Zimmerman, J. L. (1977). The municipal accounting maze: An analysis of political incentives. Journal of Accounting Research, 15, 107–144. https://doi.org/10.2307/2490636


Abstract Views: 171

PDF Views: 0




  • Drivers of Mandatory and Non-Mandatory Internet Corporate Reporting in Public and Private Sector Indian Companies

Abstract Views: 171  |  PDF Views: 0

Authors

Harmandeep Singh
Department of Commerce, School of Commerce, Finance and Accountancy, Christ (Deemed to be University), Bangalore - 560 029, India

Abstract


The paper’s objective was to measure the drivers of mandatory and non-mandatory internet corporate reporting by public and private sector companies following the internet disclosure compliance of listing and obligation requirement of SEBI under Clause 46. Several drivers, namely firm size, profitability, leverage, liquidity, board size, independence of board, and CEO duality, were used to measure the effectiveness of mandatory and non-mandatory disclosure. A multiple regression model was applied to test the present paper’s hypotheses. The results of multiple regression revealed that the firm’s size was exceptionally important for both sectors. In contrast, public sector disclosure was largely impacted by leverage, liquidity, board size, and board independence. In comparison, the private sector disclosure scores were mainly impacted by leverage and board size, although there is no relationship between ICR and firm profitability and CEO duality. In performing separate multivariate regression between the two sectors, many disparities emerged. This disparity showed that public and private sector corporations had quite different firm and governance characteristics of the disclosure. As the first exploratory research to assess the mandate internet disclosure of public and private sector companies in India, it is very informational, specifically for those working on Indian companies’ regulation, compliance, and research.

Keywords


Internet Corporate Reporting, Disclosure, Regulation, SEBI.

JEL Classification Codes : M41, M48, L33

Paper Submission Date : June 9, 2022 ; Paper sent back for Revision : November 25, 2022 ; Paper Acceptance Date : November 30, 2022 ; Paper Published Online : December 15, 2022


References





DOI: https://doi.org/10.17010/pijom%2F2022%2Fv15i12%2F172600