Does SAK Online Enhance The Quality of Financial Reporting?

Eliza, Any; Rifan, Dinda Fali; Ramdani, Rahmat Fajar

doi:10.33312/ijar.615

Cited by 2 publications

(1 citation statement)

References 9 publications

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“…However, some studies favor a small board size as a small board is more effective in controlling the activities of the managers and quick decision-making. Also, the small board size does not cause as much conflict as compared to the big one (Eliza et al, 2022;Nicolo et al, 2022). The association between board size and business performance is ambiguous and contradictory based on prior studies.…”

Section: The Size Of the Board And Mdanda Disclosuresmentioning

confidence: 99%

Voluntary Disclosures and their Drivers: A Study of MDA Reports in India

Singla,

Singh

2024

OMEE

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The aim of this study is to examine the impact of corporate characteristics on voluntary disclosures of management discussion and analysis (MD&A) reports in India. Using a formal tone, the data was extracted from the annual reports of the top 100 listed firms available on the CMIE Prowess database for seven years (2016–2022). After excluding 23 companies from the financial and insurance sector, a panel regression method with the assistance of Gretl software was employed to investigate the relationship between the Management Discussion and Analysis Disclosure Index (MDADI) for voluntary aspects and various corporate attributes, with a total of 490 firm years of balanced observations. In India, firms follow the mandatory compliance of the MD&A reports, but voluntary disclosures are somehow those which are not much emphasized but are a good indication of firm performance and their accountability towards their stakeholders (Mayew et al., 2015). Our empirical findings reveal that profitability as a proxy to firm performance has a significant positive relationship with MD&A voluntary disclosures. Further, an insignificant association between VDS (Voluntary Disclosure Score) and the board size, presence of independent directors and firm size was found. This indicates that firm performance plays a significant role in adding more voluntary disclosures in MD&A reports. The possible reason for this could be the use of “Management Impression Strategy” in the MD&A reports, which means managers disclose more only when the firm has earned more and use impressive language to attract stakeholders. The outcomes of this research offer valuable insights for regulators, policymakers, and listed companies in India, aiding in the enhancement of MD&A reporting quality. Additionally, this study provides a roadmap for future research on MD&A reporting quality and corporate attributes in other emerging countries that have similar regulatory frameworks. This paper makes a timely and pertinent contribution to the scholarly discourse by shedding light on the relationship between MD&A disclosures and firm attributes. Its findings provide valuable insights for both academia and industry.

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Section: The Size Of the Board And Mdanda Disclosuresmentioning

confidence: 99%

Voluntary Disclosures and their Drivers: A Study of MDA Reports in India

Singla,

Singh

2024

OMEE

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The effect of MD&A disclosures on corporate performance: a panel quantile regression analysis

Singh,

Singla

2024

AJAR

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PurposeThe study aims to examine how the information disclosed by the managers in the management discussion and analysis (MD&A) reports varies at the different levels of corporate performance.Design/methodology/approachTo understand this quantile effect, first OLS technique was adopted and then, the quantile regression method was applied to explore the impact of MD&A disclosures on the firm performance across the lower and upper quantiles. The sample size for the study is 490 firms’ year observations for the period 2016–2022.FindingsThe results of the study demonstrate the negative but significant relationship between MD&A disclosures and corporate performance, supporting the two management strategies of “competitive disadvantage” in case of good performance and “management impression strategy” in case of poor performance. Furthermore, with other corporate governance variables, both the size of the board and the number of independent directors on the board are positively significant only in the case of the upper quantile indicating the heterogeneity in the relationship between the performance and the MD&A disclosures. Therefore, the overall findings of the study support that these results contradict the agency theory and the stakeholders’ theory as managers are not acting well as agents on behalf of the investors and work well only when they are controlled by the large board having more independent directors.Originality/valueTo the best of the authors’ knowledge, no study so far has incorporated quantile regression to assess the effect of MD&A disclosures on company performance at various levels of the firm performance, which gives more robust insights about the viewpoint of the managers on the different level of the firm performance. In other words, this study highlights the important information as to how the information provided in the MD&A reports varies as per the good or poor performance of the companies.

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Does SAK Online Enhance The Quality of Financial Reporting?

Cited by 2 publications

References 9 publications

Voluntary Disclosures and their Drivers: A Study of MDA Reports in India

Voluntary Disclosures and their Drivers: A Study of MDA Reports in India

The effect of MD&A disclosures on corporate performance: a panel quantile regression analysis

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