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An empirical study on the determinants of information disclosure of Malaysian non-profit organizations

Author

Listed:
  • S. Zainon
  • R. Atan
  • Y. Bee Wah

Abstract

Purpose - – The purpose of this paper is to examine the determinants of the extent of disclosure by non-profit organizations (NPOs) in Malaysia due to the growing interest in the disclosure practice studies of NPOs and given the importance of disclosure to ensure accountability and transparency. Design/methodology/approach - – This study involves three phases. First, the paper identifies information items NPOs need to disclose. Second, the paper conducts an online survey to determine the ratings of importance for the disclosure items. Third, the paper measures the extent of disclosure from the annual returns of 101 Malaysian NPOs for the year 2009. The paper uses hierarchical regression analysis to determine the significant determinants of information disclosure. Findings - – The key determinants are establishment of an external audit, financial performance and government support in terms of grants. The results show that the presence of external auditors promotes better reporting practice. Malaysian NPOs that receive funding and those with better financial standing disclose more information. Research limitations/implications - – The sample only covers NPOs with tax-exempt status in the state of Selangor and Wilayah Persekutuan in Malaysia. The sample size of 101 registered NPOs limits the generalization of the results. Inclusion and analyses of additional NPOs may offer generalizable results. Practical implications - – This study provides empirical evidence concerning the establishment of external audit for better information disclosure. It also provides 88 items that are important and required by stakeholders. Originality/value - – The study is based on 88 items of information according to the needs of stakeholders for information. The NPOs reporting index can assist the preparers of charity reporting in fulfilling the stakeholders’ requirements. The reporting index can also be used to assess the information disclosure of NPOs in Malaysia.

Suggested Citation

  • S. Zainon & R. Atan & Y. Bee Wah, 2014. "An empirical study on the determinants of information disclosure of Malaysian non-profit organizations," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 22(1), pages 35-55, April.
    • Handle: RePEc:eme:arapps:v:22:y:2014:i:1:p:35-55
    DOI: 10.1108/ARA-04-2013-0026
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    Citations

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    Cited by:

    1. Rosane Maria Seibert & Clea Beatriz Macagnan & Robert Dixon & Davi Souza Simon, 2019. "Social responsibility indicators: perspective of stakeholders in Brazil and in the UK," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 16(2), pages 128-144, July.
    2. Elka Johansson & Peter Carey & George Tanewski & Iliyas Yusoff, 2022. "The effect of members on charities’ annual reporting: evidence from companies limited by guarantee in Australia," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(S1), pages 1851-1886, April.
    3. Saunah Zainon & Rina Fadhilah Ismail & Soo Kum Yoke & Haryati Ahmad & Nurulzulaiha Sa¡¯udah @ Suhadak, 2020. "A Social Entrepreneurship Case Study of the ¡°Pertubuhan Kebajikan Anak Yatim Islam Segamat¡± Orphanage in Malaysia," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(3), pages 162-167, June.
    4. Guillaume Plaisance, 2023. "Accountability in French non-profit organizations: between paradox and complexity," Post-Print hal-04430976, HAL.
    5. Nur Hayati Binti Ab Samad & Noreena Md Yusoff & Rina Fadhilah Ismail, 2019. "Effectiveness of Social Enterprise in Managing Intellectual Capital," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(3), pages 280-290, May.
    6. Sehrish Ilyas & Mattiullah Butt & Fouzia Ashfaq & Daniela Acquadro Maran, 2020. "Drivers for Non-Profits’ Success: Volunteer Engagement and Financial Sustainability Practices through the Resource Dependence Theory," Economies, MDPI, vol. 8(4), pages 1-17, November.

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