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.
This study investigated the impact of environmental, social and governance (ESG) disclosures on financial performance as captured by firms' value of public listed companies (PLCs) in Malaysia due to the growing interest in ESG disclosure practices. The sample consisted of 114 PLCs in Malaysia selected from Datastream. All the selected companies had a complete ESG for 2019. Using the ESG score index, the mean score for each disclosure was computed. Both correlation and regression analyses were carried out to investigate possible links between ESG and accounting measures of financial performance as a proxy by the Weighted Average Cost of Capital (WACC). Based on a regression analysis, ESG was discovered to have a significant relationship with WACC. In addition, further analysis revealed that out of the three dimensions of ESG, social disclosure had a significant impact on financial performance compared to environmental and governance disclosure. This study provides empirical evidence concerning the dominant impact of social disclosure for firms' financial information. It also provides environmental and governance disclosures that are important for stakeholders. The results offer stakeholders more transparent and useful information on corporate social responsibility reporting which provides for a more visible reporting in order to gain trust from stakeholders.
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