| Pub. Date | : Jan, 2024 |
|---|---|
| Product Name | : The IUP Journal of Accounting Research and Audit Practices |
| Product Type | : Article |
| Product Code | : IJARAP030124 |
| Author Name | :Sanjoy Ghosh and Ahmed Hussain |
| Availability | : YES |
| Subject/Domain | : Finance |
| Download Format | : PDF Format |
| No. of Pages | : 11 |
The paper examines the extent of corporate disclosure in the Management Discussion and Analysis (MD&A) reports of companies listed on the Bombay Stock Exchange. A sample of 55 companies is taken, and based on the disclosure checklist containing 52 information items, the extent of disclosure is measured both at the aggregate level and with respect to different reporting areas of the MD&A report. It is found that average level of aggregate disclosure is 64.8%, which is moderately high. The maximum disclosure score is 90% and minimum 25%. The variation in the extent of disclosure among the sample companies is measured by range and standard deviation, which are 65% and 11.2%, respectively. As far as disclosure in specific areas of the MD&A report is concerned, a few companies have made 100% disclosure in respect of industry structure and development, risk and concern, and segment reporting, while some have made no disclosure about outlook information. The overall results suggest that there exists scope for improving the quality of disclosure in MD&A reports of Indian companies.
The annual report is considered to be one of the main sources of communication of entity-specific information to the stakeholders for their economic decision. But the present business reporting model does not fully satisfy the information needs of the stakeholders as it provides information that is mainly of financial, quantitative and historical in nature. Consequently, the stakeholders do get an insight relating to core business and strategies, key performance indicators, risk of the entity as a whole, etc. which are not contained in financial statements.