Voluntary internet financial reporting practices of listed companies in the United Arab Emirates

Abstract

PurposeThe purpose of this paper is to investigate the use of the internet as a channel for voluntary communication of financial information by companies listed on two stock exchanges in the United Arab Emirates (UAE). It aims to focus on the extent and variety of internet financial reporting (IFR) by these companies. While IFR has become standard practice, rather than the exception, in most western countries, empirical evidence of the phenomenon in the Middle East region is only just emerging. This paper seeks to contribute to the literature by providing evidence of voluntary use of IFR for communication of financial information by UAE‐listed companies.Design/methodology/approachThe 132 companies listed on the Abu Dhabi Securities Exchange (67) and the Dubai Financial Market (65) in the UAE were investigated to ascertain whether they maintain websites; and if so, whether these sites are being used as a channel for voluntary communication of corporate financial information.FindingsWhile about 87 percent of UAE‐listed companies were found to operate websites, only 88 of these companies (about 67 percent) use their websites to communicate financial information. However, IFR is not restricted to the publication of annual financial statements only as the companies also disclose financial highlights through their websites using a variety of formats including PDF, flash and html.Practical implicationsThe results of this study indicate that, similar to other Middle Eastern countries, IFR is still at an embryonic stage in the UAE and there are considerable opportunities and challenges for all stakeholder parties in corporate communication and reporting. Regulatory authorities may need, at this early stage of development of IFR practices, to develop and establish effective strategies to ensure standard and consistent use of this channel of financial information communication for the benefit of all stakeholders.Originality/valueThe study highlights the challenges and opportunities for IFR in the Middle East Region, where it has been sparsely studied. In particular, it focused on the UAE, where literature on IFR practices is, to the best of the authors’ knowledge, not yet available.

Structure de propriété et divulgation volontaire sur internet : cas des entreprises tunisiennes cotées non financières

“…La divulgation financière sur Internet est devenue une pratique courante d'un nombre croissant de sociétés dans le monde (Hindi and Rich (2010), Oyelere et Kuruppu (2012)). Comparativement au support papier, l'internet garantit une diffusion financière plus rapide et en temps opportun, un accès très facile à la documentation des firmes, et à un moindre coût.…”

Corporate Ownership, Internet Penetration and Internet Financial Reporting: Evidence from the Gulf Cooperation Council Countries

“…Despite the growing importance of the IFR and the advantages it offers to the financial markets, the IFR is still in its infancy stage in the GCC countries (Oyelere & Kuruppu, 2012;. Many factors impede the utilisation of the Internet for financial reporting in the GCC countries and this encompass the social, cultural, institutional, and legal factors (Moradi, Salehi, & Arianpoor, 2011).…”

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

“…This platform has created a new mechanism by which individuals and groups can provide a wide range of heterogeneous information to decision makers (Ashbaugh et al, 1999). Indeed, the possibilities offered by the internet for more genuine, timely and symmetrical dialogue between organisations and stakeholders have been flagged many times, even today, when dialogue remains limited and asymmetrical and the disseminators of information manage the flow of information (Gowthorpe, 2004), in particular voluntary internet financial reporting practices (Oyelere and Kuruppu, 2012). According to agency theory, principal leads the flow of information disclosed through internet, selecting and manipulating access, in particular to mandatory information.…”

“…Thus, website efficiency also depends on the facilities available to access and download useful information for each stakeholder's category. As evidenced by Oyelere and Kuruppu (2012), the majority of companies maintain corporate websites to disseminate diversified information, primarily information about the company, and the products and services they offer. Thus, internet is seen as the opportunity to promote themselves and their products and services, with disclosure of financial information being secondary.…”