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Disclosure of Voluntary Accounting Ratios by Malaysian Listed Companies

Author

Listed:
  • Azrul Bin Abdullah
  • Ku Nor Izah Ku Ismail

Abstract

Accounting ratios are believed to be of fundamental importance in financial analysis, and therefore are useful addition to financial reports. This paper examines the reporting of voluntary accounting ratio by Malaysian companies in corporate annual reports. Drawing on agency and signaling theories, this paper explores whether associations exist between company performance and voluntary disclosure of accounting ratios. In particular, associations are tested between the extent of ratio disclosure and company performance (nmaely profitability, liqudity, leverage, and company effiency), size and industry. Six hypotheses are tested using data collected from 2003 annual reports of 100 Malaysian listed companies. This paper provides evidence that the extent of voluntary ratio disclosure is low; and size, industry as well as liquidity significantly influence the reporting of ratios in corporate annual reports. The implications of these findings are discussed.

Suggested Citation

  • Azrul Bin Abdullah & Ku Nor Izah Ku Ismail, 2008. "Disclosure of Voluntary Accounting Ratios by Malaysian Listed Companies," Journal of Financial Reporting and Accounting, Emerald Group Publishing, vol. 6(1), pages 1-20, January.
  • Handle: RePEc:eme:jfrapp:v:6:y:2008:i:1:p:1-20
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    References listed on IDEAS

    as
    1. Stewart C. Myers & Nicholas S. Majluf, 1984. "Corporate Financing and Investment Decisions When Firms Have InformationThat Investors Do Not Have," NBER Working Papers 1396, National Bureau of Economic Research, Inc.
    2. Myers, Stewart C. & Majluf, Nicholas S., 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Journal of Financial Economics, Elsevier, vol. 13(2), pages 187-221, June.
    3. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    4. Edward I. Altman, 1968. "Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy," Journal of Finance, American Finance Association, vol. 23(4), pages 589-609, September.
    5. repec:bla:joares:v:13:y:1975:i:1:p:16-37 is not listed on IDEAS
    6. Myers, Stewart C. & Majluf, Nicolás S., 1945-, 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Working papers 1523-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    7. Chau, Gerald K. & Gray, Sidney J., 2002. "Ownership structure and corporate voluntary disclosure in Hong Kong and Singapore," The International Journal of Accounting, Elsevier, vol. 37(2), pages 247-265.
    8. Bernard Raffournier, 1995. "The determinants of voluntary financial disclosure by Swiss listed companies," European Accounting Review, Taylor & Francis Journals, vol. 4(2), pages 261-280.
    9. repec:bla:joares:v:4:y:1966:i::p:71-111 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Abdullah, Azrul & Ku Ismail, Ku Nor Izah, 2015. "Hedging Activities Information and Risk Management Committee Effectiveness: Malaysian evidence," MPRA Paper 85026, University Library of Munich, Germany.
    2. Abdullah, Azrul & Ku Ismail, Ku Nor Izah & Mat Isa, Norshamshina, 2015. "Risk Management Committee and Disclosure of Hedging Activities Information among Malaysian Listed Companies," MPRA Paper 77962, University Library of Munich, Germany.
    3. repec:eee:advacc:v:29:y:2013:i:2:p:267-277 is not listed on IDEAS
    4. Azrul Abdullah & Ku Nor Izah Ku Ismail & Norshamshina Mat Isa, 2015. "Risikomanagement-Ausschuss und Offenlegung von Hedging-Aktivitäten Informationen unter Malaysian gelisteten Unternehmen
      [Risk Management Committee and Disclosure of Hedging Activities Information A
      ," Post-Print halshs-01509153, HAL.

    More about this item

    Keywords

    Accounting ratios; Disclosure; Financial report; Malaysia;

    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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