Determinants of Internet Financial Disclosure in GCC Countries

Abstract

The purpose of this paper is to examine the determinants and characteristics of voluntary internet disclosures by listed companies in Saudi Arabia and Oman. This paper uses archival data from listed companies on Tadawul Stock Exchange and Muscat Securities Market. Binary Logistic Regression analysis is used to examine the determinants of internet financial reporting. Mann-Whitney test is used to examine the differences in disclosure characteristics between the two countries. The results of this study reveal that firm size is the major influencing factor that impacts internet financial reporting. The results reveal that a number of disclosure characteristics that differ significantly between the two countries. The paper provides insights into corporate internet disclosures in the GCC countries that will benefit all stakeholders with an interest in corporate reporting in this important region of the world.

Key Performance Indicator Disclosures Through the Internet: Towards an Integrated Scoreboard

“…However, other practical issues should be considered, such as reliability and selective reporting (Uyar, 2012). Basuony and Mohamed (2014) and Aly et al (2010) have found that large companies tend to disclose more financial information in order to reduce information asymmetry and also reduce agent costs. Being subjected to more exposure, the firms come under higher pressure, such as listed companies.…”

“…The Internet has emerged as key electronic performance in the information disclosure process (Asbaugh et al, 1999;Gowthorpe, 2004;Khadaroo, 2005;Hunter and Smith, 2009;Aly et al, 2010;Oyelere and Karuppu, 2012;Uyar, 2012;Basuony and Mohamed, 2014), putting organisations and stakeholders in an immediate networked environment. Electronic businesses models (Tapscott et al, 2000), and information and communication technologies have introduced several changes in the society in individuals' behaviour and in organisational rules and procedures (Khadaroo, 2005).…”

“…Several factors exist that explain the intensity in the information process, in particular through electronic platforms (Asbaugh et al, 1999;Gowthorpe, 2004;Aly et al, 2010;Uyar, 2012;Oyelere and Karuppu, 2012;Basuony and Mohamed, 2014). Thus, evidence shows that information disclosures are significantly associated with company size, which means that large companies provide more mandatory and even voluntary disclosures than SMEs (Wallace and Naser, 1995;Al-Shammari et al, 2008;Mutawaa and Hewaidi, 2010;Dragu and Tudor, 2011;Arvidsson, 2011).…”

“…In this asymmetrical dialogue (Gowthorpe, 2004), many factors determine the type, timing and intensity with which that information is disseminated. Electronic platforms have assumed critical importance in this dissemination process and have changed the boundaries of businesses (Tapscott et al, 2000), including legal requirements and standards (Asbaugh et al, 1999;Hunter and Smith, 2009;Aly et al, 2010;Uyar, 2012;Basuony and Mohamed, 2014).…”

“…Thus, each of those theories find their basis in the social contract established between the company and its stakeholders, creating internal mechanisms to respond to changes occurring in the environment. Listed companies influenced by participants in the market tend to reduce agency costs by disclosing large flow of corporate information (Jensen and Meckling, 1976;Basuony and Mohamed, 2014).…”