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Assessment of Quality of Internet Financial Disclosures Using a Scoring System. A Case of Polish Stock Issuers

Author

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  • Joanna Dyczkowska

    (Wroc³aw University of Economics, Poland)

Abstract

Due to investor relations sections placed on corporate websites shareholders have an access to current information on stock issuers’ activities. This enables investors to participate in discussions on decisions met by a board of a company. Transparent and comprehensible information should become, therefore, a key element of stock issuers’ information policies. The paper aims at evaluating quality of Internet financial disclosures, comprising: completeness, accuracy, relevance and transparency. With a scoring method applied and with a use of appropriate weights in reference to particular criteria, a ranking of stock issuers, according to a level of disclosures, was established. The examined group consisted of 143 publicly traded Polish companies which were listed on the Warsaw Stock Exchange. Although all of them run corporate websites, almost one third did not provide any information coming directly from financial statements, whereas almost half did not disclose any financial ratios using Internet investor relations sections. The research findings indicated that few companies only could be labeled as those representing a high level of financial disclosures. Most of the examined objects were characterized by a low level of disclosures. That situation proves that despite the existence of recommended practices in a discussed area, only a small number of companies perceived corporate websites as an important communication channel with their investors. Almost one third of the research sample did not consider that way of presentation as necessary to build confidence among shareowners. The second objective of the paper was to investigate whether there existed relations between a company size, profitability or an industrial affiliation and the quality of Internet financial disclosures. Respecting results of the correlation analysis the author claims that a company size is weakly but positively correlated with the quality of financial reporting disclosures and with the total quality of Internet financial disclosures. Profitability of the examined companies was found, in turn, to be weakly but negatively correlated with the quality of financial reporting disclosures. Research findings indicated also that there were statistically valid differences in sizes of companies respecting the quality of Internet financial disclosures. Disclosures of financial reporting information, financial ratios and total Internet financial disclosures did not differ for various industries, though.

Suggested Citation

  • Joanna Dyczkowska, 2014. "Assessment of Quality of Internet Financial Disclosures Using a Scoring System. A Case of Polish Stock Issuers," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 13(1), pages 50-81, March.
    • Handle: RePEc:ami:journl:v:13:y:2014:i:1:p:50-81
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    References listed on IDEAS

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    1. Yosr Trabelsi & Pascal Dumontier & . Labelle, 2008. "Incremental Voluntary Disclosure on Corporate Web Sites, Determinants and Consequences," Post-Print halshs-00366378, HAL.
    2. Trabelsi, Samir & Labelle, Réal & Dumontier, Pascal, 2008. "Incremental Voluntary Disclosure on Corporate Websites, Determinants and Consequences," Journal of Contemporary Accounting and Economics, Elsevier, vol. 4(2), pages 120-155.
    3. Xiao, Jason Zezhong & Yang, He & Chow, Chee W., 2004. "The determinants and characteristics of voluntary Internet-based disclosures by listed Chinese companies," Journal of Accounting and Public Policy, Elsevier, vol. 23(3), pages 191-225.
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    Cited by:

    1. Yousef Alwardat, 2019. "Disclosure Quality and its Impact on Financial Reporting Quality, Audit Quality, and Investors’ Perceptions of the Quality of Financial Reporting: A Literature Review," Accounting and Finance Research, Sciedu Press, vol. 8(3), pages 201-201, August.
    2. Nadia Albu & Ruxandra Adriana Mateescu, 2015. "The Relationship between Entrepreneurship and Corporate Governance The Case of Romanian listed Companies," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(38), pages 1-44, February.
    3. Helmi A. Boshnak, 2021. "Internet Financial Reporting Practices in Saudi Arabia," International Journal of Business and Management, Canadian Center of Science and Education, vol. 15(9), pages 1-15, July.
    4. Dolinšek Tatjana, 2020. "Application of statistical methods in Internet financial information analysis," Croatian Review of Economic, Business and Social Statistics, Sciendo, vol. 6(1), pages 43-55, May.
    5. Mohammed Ali Ahmed Al-Sharafi & Shu Tong & Abdullah Aloqab, 2021. "The Effective Role of Internal Factors on Reconstructing Telecom Companies: The Case of Yemen Telecom," Sustainability, MDPI, vol. 13(3), pages 1-23, February.
    6. Yousef Ali Alwardat, 2020. "Internet Financial Reporting Disclosure in the Saudi Listed Manufacturing Companies," Business and Management Research, Business and Management Research, Sciedu Press, vol. 9(3), pages 1-13, September.
    7. Dolinšek Tatjana & Tominc Polona & Skerbinjek Andreja Lutar, 2014. "Users’ Perceptions on Internet Financial Reporting," Organizacija, Sciendo, vol. 47(4), pages 254-266.
    8. David Čevela, 2016. "Quality of Information Disclosed in Annual Reports of Listed Companies in the Czech Republic," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2016(2), pages 21-36.
    9. Mateusz Mogilski, 2018. "Internet Reporting Index of Companies Listed in the Alternative Trading System New Connect Organized by the Warsaw Stock Exchange (Indeks Raportowania Internetowego spolek notowanych w alternatywnym s," Research Reports, University of Warsaw, Faculty of Management, vol. 1(27), pages 105-117.

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    More about this item

    Keywords

    investor relations; internet financial reporting; financial disclosures;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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