Determinants of corporate reporting on the internet

Abstract

PurposeThe primary objective of this study is to investigate the utilization of the internet by the Turkish companies listed on the Istanbul Stock Exchange (ISE) for corporate reporting; to determine the company characteristics that influence the information disclosure level on the internet; and to investigate whether there is a significant difference between the firms listed in the Corporate Governance Index of the ISE and those that are not, in terms of level of disclosure on the corporate web sites.Design/methodology/approachThe methodology of the study was content analysis of corporate web sites of corporations listed on the ISE.FindingsFirms, which are listed in the ISE Corporate Governance Index (XCORP), disclose significantly more information on corporate web sites compared to the firms that are not listed in the XCORP. In addition, the results indicate that firm size and being listed in the XCORP are significant explanatory variables for the total disclosure score on the corporate web sites, while industry and profitability are not.Research limitations/implicationsSince the study was conducted on a sample of listed companies on the ISE, the findings are not necessarily representative of non‐listed companies.Originality/valueThe study contributes to the scarce literature on internet reporting in developing countries and it incorporates the XCORP in the predictors of information disclosure level on corporate web sites.

Key Performance Indicator Disclosures Through the Internet: Towards an Integrated Scoreboard

“…Those companies are obliged to publicly communicate financial information and produce quarterly management reports, make announcements to investors, disclose important events by press releases, and inform stakeholders about social and environmental responsibility activities through their corporate websites. As evidenced by Uyar (2012), companies utilise the internet actively as a communication tool for investor relations by disclosing financial and non-financial information. However, some items are not disclosed as much as others that require additional developments to increase the transparency of the companies.…”

“…According to FASB (2000), six key motives can drive the level of financial information disclosure: (1) reducing the cost and time to distribute information; (2) communicating with previously unidentified consumers of information; (3) supplementing traditional disclosure practices; (4) increasing the amount and type of data disclosed; (5) improving access to potential investors form small companies; and (6) up-to-date information through regular maintenance of websites. However, other practical issues should be considered, such as reliability and selective reporting (Uyar, 2012). Basuony and Mohamed (2014) and Aly et al (2010) have found that large companies tend to disclose more financial information in order to reduce information asymmetry and also reduce agent costs.…”

“…The Internet has emerged as key electronic performance in the information disclosure process (Asbaugh et al, 1999;Gowthorpe, 2004;Khadaroo, 2005;Hunter and Smith, 2009;Aly et al, 2010;Oyelere and Karuppu, 2012;Uyar, 2012;Basuony and Mohamed, 2014), putting organisations and stakeholders in an immediate networked environment. Electronic businesses models (Tapscott et al, 2000), and information and communication technologies have introduced several changes in the society in individuals' behaviour and in organisational rules and procedures (Khadaroo, 2005).…”

“…In this asymmetrical dialogue (Gowthorpe, 2004), many factors determine the type, timing and intensity with which that information is disseminated. Electronic platforms have assumed critical importance in this dissemination process and have changed the boundaries of businesses (Tapscott et al, 2000), including legal requirements and standards (Asbaugh et al, 1999;Hunter and Smith, 2009;Aly et al, 2010;Uyar, 2012;Basuony and Mohamed, 2014).…”

“…Several factors exist that explain the intensity in the information process, in particular through electronic platforms (Asbaugh et al, 1999;Gowthorpe, 2004;Aly et al, 2010;Uyar, 2012;Oyelere and Karuppu, 2012;Basuony and Mohamed, 2014). Thus, evidence shows that information disclosures are significantly associated with company size, which means that large companies provide more mandatory and even voluntary disclosures than SMEs (Wallace and Naser, 1995;Al-Shammari et al, 2008;Mutawaa and Hewaidi, 2010;Dragu and Tudor, 2011;Arvidsson, 2011).…”