Corporate Reporting on the Internet

Abstract

In this paper, we examine firms' use of the Internet to enhance the relevance of their financial reporting. We define a firm as practicing Internet Financial Reporting (IFR) when it provides in its web site either (1) a comprehensive set of financial statements (including footnotes and the auditors' report), (2) a link to its annual report elsewhere on the Internet or (3) a link to the U.S. Security and Exchange Commission's (SEC) Electronic Data Gathering, Analysis and Retrieval (EDGAR) system. While 70 percent of the firms in our sample engage in IFR, we find substantial variation in the quality of firms' IFR practices. Specifically, the variations in quality pertain to the timeliness and therefore, the usefulness of firms' financial reporting on the Internet. We find that some firms provide more timely financial disclosures via the Internet (e.g., monthly sales) while other firms report outdated financial data (e.g., two-year old annual reports). We also observe that the usefulness of firms' financial reporting on the Internet depends on how easy it is to access that data, the amount of data disclosed and/or whether users can download or analyze the data. To substantiate firms' incentives for engaging in IFR, we sent surveys to firms with web sites in our sample and asked them to report their perceived costs and benefits related to establishing an Internet presence. Firms responded to our questions about why they established an Internet presence by indicating that they perceive their web sites to be an important vehicle to disseminate information to shareholders. After documenting how and why firms use the Internet to voluntarily disclose financial information, we develop the implications of such practices for consumers who demand financial information, firms that supply financial data, auditors and market regulators.

Environmental reporting on the internet by America's Toxic 100: Legitimacy and self-presentation

“…For example, studies have examined IFR in countries including the US (see, e.g., Ashbaugh et al, 1999;Ettredge et al, 2001;Patten, 2002b), Germany (see, e.g., Marston and Polei, 2004), Spain (see, e.g., Gowthorpe and Amat, 1999), and Sweden (see, e.g., Hedlin, 1999), as well as in companies across different countries (see, e.g., Flynn and Gowthorpe, 1997;Debreceny et al, 2002).…”

An exploration of the potential for studying the usage of investor relations information through the analysis of Web server logs

“…Several national and international studies have documented increases in the number of companies reporting corporate information via the Internet, and have reported increases in the volume of information disclosed via this medium (see Lymer et al (1999), Trites (1999), Deller et al (1999, Ashbaugh et al (1999Ashbaugh et al ( ), F.A.S.B. (2000, Geerings et al, (2003)).…”

“…A survey by Ashbaugh et al (1999) found that those firms engaged in online corporate reporting placed greater emphasis on communications with potential and existing shareholders. Interviews conducted by Ettredge et al (2001) found that IR directors do see the Web site as a means of reducing administrative costs and that online disclosure helps provide a common level of disclosure to all stakeholders.…”

“…Although several authors have considered the usefulness of online IR against that distributed in more traditional formats (e.g. Ashbaugh et al, 1999, Jones et al, 2001, Dull et al, 2003, no study provides data on what is actually accessed by users. Previously, it has proven difficult to observe the use IR information by the various constituents who have access to this information.…”

Lease Accounting Reform and Economic Consequences: The Views of Preparers and Users

“…Response rates obtained for preparers/finance directors in the UK have been: 18% (Bebbington et al, 1994); 6% and 35% (Nixon, 1997); 32% (Arnold and Hatzopoulos, 2000); 30% (Manson and Zaman, 2001). Studies in other countries report the following: US: 12% (Trahan and Gitman, 1995); 27% (Ashbaugh et al, 1999); 9% (Graham and Harvey, 2001); Australia: 25% (Deegan and Rankin, 1999); New Zealand: 25% (Milne and Chan, 1999). Illustrative response rates for expert users/investment analysts have been UK: 22% (Solomon, 1999); 20% (Clatworthy, 2000); 23% (Manson and Zaman, 2001); Australia: 35% (Yap, 1997); 25% (Deegan and Rankin, 1999); New Zealand: 21% (Milne and Chan, 1999).…”