The IUP Journal of Accounting Research and Audit Practices:
Board Efficiency and Internet Reporting Quality: An Empirical Study of Indian Public Sector Giants

Article Details
Pub. Date : Oct, 2018
Product Name : The IUP Journal of Accounting Research and Audit Practices
Product Type : Article
Product Code : IJARAP31810
Author Name : Harmandeep Singh and Arwinder Singh
Availability : YES
Subject/Domain : Finance
Download Format : PDF Format
No. of Pages : 16

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Abstract

The purpose of this paper is to examine the potential board efficiency factors that may affect the quality of internet reporting of the Indian public sector companies. The paper applies content analysis on 81 listed public sector Indian companies to examine the information disclosed on their websites. To test the efficiency of the board, board size, independence of the board, board meetings, and CEO-duality are included while controlling some firm-specific factors like size of the company, profitability, liquidity and industry sector. The regression analysis indicates that the board independence ratio, size, profitability, and industry sector have a significant influence on the total quality of internet reporting of Indian public sector companies. Whereas other variables such as board size, board meetings, CEO-duality and leverage of the companies do not affect the total internet reporting quality. Another notable finding of this study is that board meetings and leverage have a significant adverse impact on content disclosure quality of reporting. The findings indicate that public sector companies with small board size and lower debt are meant to disclose more information on their web pages. The results of the study are helpful for the government-owned companies while deciding the board structure, as the results suggest that board monitoring affects the quality of internet reporting.


Description

Over the past decade, research in finance and accounting insisted that internal and external reporting have been serving various stakeholders of the companies in meeting their decision-making needs and achieving transparency (Singhvi and Desai, 1971; Firer and Meth, 1986; and Cooke, 1989). The recent advancement in information technology has fascinated companies to report their activities in digital format on the internet (Louwers et al., 1996; Lymer, 1997; Lymer, 1999; Debreceny et al., 2002; Bonson and Escobar, 2006; Garg and Verma, 2010; and Botti et al., 2014). Botti et al. (2014) report that disclosure quality reduces information asymmetry between companies and stakeholders. Dyczkowska (2012) emphasized providing high-quality information by the regulating environment that would build confidence between the stock issuer and the investors. Garay et al. (2013) report that providing high level of quality corporate information on the internet reduces the information asymmetries between the corporation and their stakeholders. Overall, internet reporting provides various benefits to the source company such as low cost, broader reach, mass communication, easily accessible, integrated reporting and quick reach (Craven and Marston, 1999; Ettredge et al., 2000; and Xiao et al., 2004).


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