An index of best practice performance reporting for Malaysian local authorities

Abstract

Purpose -The purpose of this paper is to identify stakeholders' expectations of information to be conveyed in local authorities' annual reports and to develop an index of best practice performance reporting. Design/methodology/approach -The paper describes the development of a disclosure index emphasizing the public interest aspect of reporting and the need to provide relevant and meaningful information to stakeholders. The index was crafted from a public accountability perspective and based on the expectations of stakeholders as reconciled and validated by a Delphi panel of experts. Findings -The wide scope of information that was identified as being important for disclosure by local authorities is consistent with the public accountability paradigm which requires the reporting of comprehensive information (both financial and non financial), about the condition, performance, activities and progress of the entity. Originality/value -The research posits a model of best practice performance reporting for Malaysian, and other, local authorities to meet the need for greater accountability by these entities.

Expectations of Stakeholders on the Information Disclosure from the Malaysian State Islamic Religious Councils (SIRCs) Reporting

“…The importance of comprehensive report (others call it as performance reporting) which consists of financial and non-financial information has been highlighted by Hooks et al (2012). Government performance reporting to the public is essential as a medium to show the transparency and accountability of the government (Grosso & Van Ryzin, 2012).…”

Keperluan Pemegang Kepentingan Institusi Zakat Terhadap Item Maklumat Pelaporan Prestasi

“…Selain maklumat kewangan, institusi zakat juga dilihat perlu mengkomunikasikan prestasinya dalam bentuk maklumat bukan kewangan terutama aktiviti kutipan dan agihan zakat bagi membolehkan pemegang kepentingan mengetahui ke mana dan bagaimana dana zakat disalurkan. Pelaporan prestasi dilihat sebagai satu mekanisma untuk mendedahkan maklumat kewangan dan bukan kewangan institusi zakat kepada semua pemegang kepentingannya termasuk pembayar zakat selari dengan pengiktirafan kajian-kajian lepas (Tooley, Hooks & Norida, 2010;Hooks, Tooley & Norida, 2012;Hyndman & Anderson, 1995;Lapsley, 1992;Stoetzer & Hilger, 2011) terhadap pelaporan prestasi sebagai mekanisma penting bagi sesebuah organisasi menjelaskan akauntabilitinya kepada pelbagai pemegang kepentingan.…”

Towards Developing a Disclosure Index for Malaysian Zakat Institutions

“…A group of 116 middle and top level of staff management of the university was involved in the survey and generally most of them perceive the AI as a good initiative for a basis of measuring performance and benefit the university in future. Apart from that Hooks et al (2012), have put initiative by suggesting a best practice reporting performance for local government in Malaysia via disclosure index. As the assumption of the annual reports prepared are the main mechanism for discharging accountability as well as grants relevant and meaningful information to the stakeholders, the paper portrays that the best practice reporting performance demands more comprehensive on performance information which cover both financial and non-financial elements.…”

“…In order to be an index, a single number that represents total scores for all information needs to be created, which means a weight for each disclosure item would be developed by referring to the level of importance of all information. To calculate the disclosure index, the items are measured based on a five-point scale (0: not at all important to 5: extremely important), which in line with the study done by (Hooks et al, 2012) which focuses on disclosure index for local authorities in Malaysia. Furthermore, some of the disclosure items might be identified more important than others by stakeholders (Saunah et al, 2012).…”

“…Hence, one of the methods that can be used to measure information disclosed by organizations is via disclosure index (Saunah et al 2012). Many past studies have developed and used index to measure the annual report and reporting practices of variety of organizations specifically non-profit type; such as Coy & Dixon (2004), , Hooks et al (2012), Wei et al (2008) and so forth. Marston & Shrives (1991) described "disclosures indices are extensive lists of selected item which may be disclosed in company report".…”