Academic journal article The Journal of Developing Areas

Determinants of Internet Financial Reporting in African Markets: The Case of Mauritius

Academic journal article The Journal of Developing Areas

Determinants of Internet Financial Reporting in African Markets: The Case of Mauritius

Article excerpt

INTRODUCTION

The massive use of the internet has prompted companies to set up websites to disseminate financial and non-financial information. This initiative is mainly undertaken to meet stakeholders' demand for timely information, in more effective ways (Willis et al. 2003). Mauritius is among the top five countries in Africa in terms of Internet penetration rate (Internet World Stats 2012). This suggests that there is an increasing demand by Mauritians for information on the internet. Foreign investors account for more than 40 percent of the daily trading activities on the Stock Exchange of Mauritius Access to both financial and non-financial information about Mauritian leading firms and its accessibility at a simple click of the mouse are therefore of utmost importance for investors.

Most of the studies undertaken in the field of IFR have concentrated on developed countries. Boubaker et al. (2011) study the determinants of IFR in France. Abd- Elsalam and Street (2007), Xiao et al. (2004), and Martson (2003) undertake similar studies in UK, USA, and Japan respectively. Haniffa and Cooke (2005) guards against the evaluation of voluntary disclosures using norms prevalent in developed countries. A few studies have been conducted in developing countries such as GCC countries (Mohamed and Basuony 2014), Indonesia (Puspitaningrum and Atmini 2012), Egypt (Aly et al. 2010), Moroccan and Tunisian (Henchiri 2011), and Saudi Arabia (Hussainey and Al-Nodel 2008). Thus our paper bridges the gap in the literature to provide evidence of the determinants of IFR in a developing African market and in the case of small island developing state.

The rest of the paper is organized as follows. Section 2 provides a literature review of the IFR. Section 3 covers the theory and research hypotheses. Followed by variable measurement in Section 4. Section 5 provides the methodology used for this study. Section 6 presents the results of the study. The Final section provides the conclusions of the study and avenues for further research.

LITERATURE REVIEW

There are many benefits of web-based reporting including ease of access, cost savings associated with printing and sending paper based reports, widespread diffusion, and the rapid comparison and analysis of data (Boubaker et al. 2011). The IFR is mainly undertaken to meet stakeholders' demand for timely information, in more effective ways (Willis et al. 2003). In most instances this type of disclosure is voluntary and unregulated (Martson 2003). Research on IFR has focused on Corporate Social Responsibility (CSR) and environmental disclosure (Dutta and Bose 2008; Cho and Roberts 2010).

Studies on IFR can be traced back to 1996-1997, only one year after the start of commercial interest in the Internet (Allam and Lymer 2003). The first set of studies mainly focused on the existence of a corporate website and the type of information disclosed (Debreceny and Gray 1999; Lymer 1999). The focus changed at the beginning of the twenty first century. Researchers concentrated on the extent of IFR and the modes of financial information disclosed on the Internet (Bonson and Escobar 2006; Abd-El Salam and El-Masry 2008).

A number of empirical studies have investigated the link between corporate characteristics (for instance, firm size, auditor quality, ownership dispersion, firm performance, and cross listing) and IFR (Boubaker et al. 2011; Puspitaningrum and Atmini 2012). However, these studies neglect one important element, which relates to the responsibility of the information being published. Firms provide a vast amount of information online ranging from description of products/ services to financial statements and CSR information. The question, which arises, is: who bears the responsibility for the credibility of the information disclosed? Consequently, we include in our set of explanatory variables, board size, as the board is ultimately accountable for information disclosed on the Internet. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.