NOU FB Internet Disclosure CEE

Digital reporting in Eastern Europe: An empirical study
Enrique Bonsn
, Toms Escobar
University of Huelva, Plaza of the Merced, s/n., 21002 Huelva, Spain
Received 14 May 2004; received in revised form 14 September 2006; accepted 28 September 2006
Abstract
In the recent years, the European Union (EU) has developed a series of norms with the objective of
increasing the transparency of both companies and the financial markets, as well, through the diffusion of
company information via the Internet. The incorporation of countries of Eastern Europe into the EU raises
the need to determine the impact of their incorporation on the transparency of the markets. In effect,
incorporation into the EU implies the need for companies from those countries to adopt the practices of
transparency promoted by the EU.
The objective of this article is to determine the distance or differences existing between the information
currently supplied by the companies of Eastern Europe that have recently joined the EU or are now in the
process of joining and the information required according to the initiatives of the EU. Furthermore, it
attempts empirically to identify the variables that could have some influence on the amount of information
disclosed.
To this end, data from companies of each of the following countries have been collected: Bulgaria,
Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia, Slovenia
and Turkey. Results show a statistically significant relationship between the extent of information
disclosure on the Internet and a) company size, b) the company's activity being in the financial sector, and
c) the fact of employing one of the world's Big Four accountancy firms for auditing the company's books.
2006 Elsevier Inc. All rights reserved.
Keywords: Digital reporting; Voluntary disclosure; Internet
1. Introduction
During recent decades, the developments taking place in the information and communication
technologies have changed the ways that companies relate to their shareholders, clients, suppliers,
International Journal of Accounting Information Systems
7 (2006) 299318
Corresponding author.
E-mail addresses: bonson@uhu.es (E. Bonsn), tescobar@uhu.es (T. Escobar).
1467-0895/$ - see front matter 2006 Elsevier Inc. All rights reserved.
doi:10.1016/j.accinf.2006.09.001
institutions, etc. In this respect, the accounting function has been called upon to play a key role in
the use of the new technologies in general, and of the Internet in particular, to keep the external
users informed of such information.
Greater requirements have been imposed on accounting information systems through the increased
transparency of the financial markets, and these are motivating companies to increase voluntarily both
the quantity and quality of information provided by their corporate servers. In addition, there are other
reasons for this trend, associated with the need to offer an image of modernity, that are driving
companies to provide information via the Internet as a way of establishing their own identity in the face
of all the other economic agents in the current technological environment.
Using the Internet allows a company to provide on-line a large volume of information which users
can access on demand, in function of their particular area of interest. Some of the companies that first
created their Web pages mainly for reasons of corporate image are coming to realise the possibilities of
obtaining competitive advantages from their use, and this is reflected in the continuous growth in the
number of companies world-wide that are beginning to utilize their Web pages to distribute accounting
information, thus appreciably improving both the quantity and quality of the information provided.
In the recent years, the EU has developed a series of norms with the object of increasing the
transparency of companies, and therefore that of the financial markets also, through the diffusion
of company information by Internet. The incorporation of countries of Eastern Europe to the EU
raises the need to determine the impact of their incorporation on the transparency of the markets.
In effect, the incorporation of those countries into the EU implies the need for their companies to
adopt the practices of transparency promoted by the EU.
This study has two main objectives. The first is to determine the distance existing between the
information currently supplied by companies of the countries of Eastern Europe that have recently
joined the EU or are now in the process of joining, and the information required by initiatives of
the EU. To this end, we establish the current level of utilization of Internet for the voluntary
disclosure of information by the principal companies based in the countries of Eastern Europe, by
analyzing the content of their Web pages. The second is to identify empirically the factors that
explain the different attitudes of companies toward using the Internet for investor relationships.
2. Corporate disclosure by internet
The disclosure of corporate information by Internet is attracting the attention not only of the various
accounting bodies but also of researchers. In recent years the principal accountancy bodies have
published several studies analyzing the possible repercussions of this practice of corporate reporting on
the accounting profession. Some of these studies represent a first attempt towards establishing
standards to harmonize both the content and the format of such digital information. In the following
paragraphs the principal studies conducted are briefly outlined, in order of date of publication.
In 1997, the Institute of Chartered Accountants in England and Wales (ICAEW) published a
report (Spaul, 1997) analyzing the principal implications that the new technologies may have on
the distribution of accounting information, and indicating the changes that must be made to the
current system of reporting in the light of the challenges presented by the digital economy. In a
second report, the ICAEW (1998) made a proposal regarding the content and format that digital
information should have, so as to meet the needs of the capital markets.
The International Accounting Standards Committee (IASC), now the International Accounting
Standards Board (IASB), has published a study (Lymer et al., 1999) that identifies the reasons that
have encouraged the distribution of corporate information via the Internet, provides evidence of
the corresponding practices of 660 companies in 22 countries (Debreceny et al., 2002), suggests
300 E. Bonsn, T. Escobar / International Journal of Accounting Information Systems 7 (2006) 299318
the development of an integral approach to assist with the development of standards that would
ensure both the accuracy of reports and the flexibility necessary for future innovations, and at the
same the time discusses the opportunities, changes and implications of the digital distribution of
accounting information on the accounting profession and the IASC.
In 1999, the Canadian Institute of Chartered Accountants (CICA) published a report in which
reviewed and analyzed the existing literature and digital reporting practices of 370 companies
quoted on the New York, NASDAQ and Toronto stock exchanges. This report addresses a variety
of interesting topics including the convergence between Financial and Management accounting,
information overload, utilization of intelligent software agents, the integrity, security and con-
fidentiality of information, multimedia communications, corporate governance, the quality of
information, the democratization of corporate reporting, the utilization of international standards,
and corporate dialogue and the impact of on-line reporting on current accounting models.
Subsequently, the Financial Accounting Standards Board (FASB) introduced two reports. The
first report (FASB, 2000) indicates the advantages offered by the Internet for disclosing ac-
counting information, while drawing attention to certain aspects related to the homogeneity and
quality of digital information. The second (FASB, 2001) provides evidence of the current use of
the Internet for disclosing information, while giving some examples that companies could utilize
to improve the quality of the information provided on their corporate servers.
The International Federation of Accountants (IFAC) published Financial Reporting on the
Internet (2002) which presents, among other contributions, a series of considerations on the control
mechanisms that companies should implement when using the Internet to disclose information to
investors, analysts and other users. Recently, ICAEW (2004) published Digital Reporting: A
Progress Report that identifies two levels of digital reporting. Basically, Level 1 discusses
publication of company's existing reports on the Internet, so that these are disseminated more
widely. In turn, Level 2 involves standardization of the format in which the information is stored,
thereby facilitating and improving the process of analysis and exchange with other systems.
Further, the digital distribution of accounting information has also been studied intensively by
researchers in recent years. Gray and Debreceny (1997) studied the use of the Web by US
companies listed in the Fortune 50. Later, Debreceny et al. (1999) stated that approximately 80%
of the leading US corporations include financial information in their Web pages. The FASB
(2000) presented the results of the analysis made in January 1999 on the current status of the
digital distribution of financial accounting information by the 100 companies included in the
Fortune 100 index. The practices of voluntary dissemination of information via the Internet by
North American companies has also been analyzed more recently by Ettredge et al. (2002a,b),
who distinguish the information required by the U.S. Securities and Exchange Commission from
that which is not requested by that regulatory body.
There are many descriptive articles indicating the information that the principal companies of the
various European countries supply via the Internet. Researchers have concentrated their attention onthe
countries that comprise the EU. In June 1997, Lymer (1998) analyzed how the 50 most important
companies listed on the UK capital market utilized the Internet. Later, in July 1998, also in the United
Kingdom, Craven and Marston (1999) analyzed a sample of 206 companies obtained from the FTSE
100 index and the companies with the largest stock market capitalization in January 1998, according to
the Financial Times. In respect to Germany, Deller et al. (1998) analyzed a sample of 100 companies
obtained fromthe DAXindex. Recently, Marston and Polei (2004) examined the use of the Internet for
the disclosure of financial and investor-related information by German companies between two points
of time (2000 and 2003) and revealed that significant improvements in the amount and the presentation
of information at corporate Web sites have occurred.
Using the companies quoted on the Helsinki stock market, Lymer and Tallberg (1997)
analyzed the situation of Finnish companies. Hedlin (1999) studied a sample of 60 Swedish
companies compiled from the Stockholm Stock Exchange index. Several similar studies have also
been conducted in Spain. In 1998, Gowthorpe and Amat (1999) examined 379 companies quoted
on the Madrid market. Later, Larrn and Giner (2002) made a study of 144 companies on the
Spanish continuous market in October/November 2000.
Other studies have been undertaken that consider Europe as a whole. On this scale, Bonsn
et al. (2000) analyzed the digital reports of the 50 European companies that comprised the Dow
Jones Eurostoxx 50 Index. Later, Bonsn and Escobar (2002) conducted a study on a sample
comprising the 20 companies with the largest stock market capitalization in each of the member
countries of the EU.
As can be appreciated, the majority of these studies have been limited to the analysis of the
reporting practices via the Internet of companies located in the United States (US) and the
countries of the EU. On this point, Marston and Polei (2004: 307) state that in future research they
might extend the scope of their study by including comparative studies with other countries.
Although there are a few studies like those of Oyelere et al. (2003) or Lont (2003) who analyze the
determinants of Internet financial reporting by New Zealand companies or that of Xiao et al.
(2004) who analyze the factors behind Chinese listed companies' voluntary adoption of Internet-
based financial reporting, more studies are needed that examine companies that are located in
other countries to enable analyses of the information divulged using the Internet, together with the
determining factors.
Although interest in this topic of research has clearly increased in recent years, no evidence
exists on the situation of companies in countries that have recently joined the EU or are now in the
process of joining. In fact, a certain degree of maturity has nowbeen reached in research conducted
to date on the use of the Internet to disclose company information to external users; but little
attention has been given by researchers to the companies located in the East European countries.
One of the basic principles of the EU is the free movement of capital between the member
countries. In order to facilitate the movement of capital in the European financial market and
increase the security of such movement, the EU has developed a series of norms to increase the
transparency of companies and, consequently, of the financial markets. The incorporation of
Eastern European countries into the EU raises the need to determine the impact of their
incorporation on the transparency of the markets.
In effect, the incorporation of those countries into the EU implies the need for their companies
to adopt the practices of transparency promoted by the EU. The need to increase the transparency
of information has been given a dramatic boost by the financial scandals that rocked the financial
markets of North America and Europe from the end of 2001. In this context, the principal
European companies have for years taken advantage of the numerous possibilities offered by the
Internet in order to improve their corporate image and to report to their shareholders and other
investors.
In consequence, the resort to new technology, and in particular to the Internet, is not a novel
practice, since the quoted companies with informative policies that are more committed to
transparency have resorted to it since the second half of the 1990's. The novelty, in this case, is
that the regulators of the principal financial markets have incorporated these practices into their
regulations and are aware of the potential profits for investors.
In the US, after successive corporate scandals that reached their zenith with the Enron case, the
SarbanesOxley law was passed in July 2002. This law particularly addressed (1) auditor
independence, (2) creation of a regulator for audit firms and audit standards, (3) regulation of
companies' audit committees in order to improve corporate social responsibility, (4) certification
of the annual accounts, and (5) inclusion of special standards for improving financial information.
Normative development has also taken place in Europe. Diverse studies carried out in relation
to the transparency of companies were included in the Winter Report 2002, which provided the
inspiration for the EU Action Plan of Company Law. In Germany the Cromme Report was
approved, and Italy and France revised their codes of practice in 2002. The Higgs and Smith Report
of 2003 proposed modifications for the British Code, too. In 2004 the OECD's Principles of
Corporate Governance were approved. One of the countries that has taken this European initiative
and developed it in a more detailed form is Spain, where after the production of various reports, a
series of standards were approved that specify the information that Spanish companies should
include in their Web pages, as well as make it obligatory to simultaneously include in the Web
page, all the information provided to the National Commission for the Securities Market (CNMV).
The objective of this article is to determine the distance or differences existing between the
information currently supplied by the companies of Eastern Europe that have recently joined the
EU or are now in the process of joining, and the information required according to the initiatives
of the EU towards increasing the transparency of companies, and consequently of the financial
markets, by the diffusion of company information via the Internet. Furthermore, it attempts
empirically to identify the variables that could influence the amount of information disclosed.
To this end, we have studied the use of the Internet for the voluntary disclosure of information
made by Eastern European companies, by analyzing the content of their websites. Specifically, we
have concentrated our study on thirteen countries: Bulgaria, Cyprus, Czech Republic, Estonia,
Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia, Slovenia and Turkey. An
additional objective was to identify empirically the factors that explain the different attitudes of
companies toward using the Internet for purposes of investor relationships.
3. Hypotheses and theoretical background
3.1. Theories and hypotheses
Corporate use of the Internet has evolved rapidly during recent years. Three distinct strategies
can be identified regarding the use of this medium of communication. At first, the objective was
the colonization of the new medium by their presence on the Web. The need to present a modern
corporate image drove many companies to take an early position, but they developed corporate
sites that offered hardly any type of financial information. But once their corporate pages were
available, managers began to provide their annual accounts to enable access to basic financial
information. Currently, many companies are complementing the financial information provided
via the Internet with the diffusion of voluntary information.
The voluntary disclosure of information by companies is not a recent practice. Companies
have traditionally supplied information voluntarily, either through the printed Annual Report
(Lang and Lundholm, 1993) or at general meetings of shareholders (Frankel et al., 1999), with the
object of influencing the behavior of investors, consequently achieving a reduction of the
asymmetry of information existing between the managers and investors (Healy and Palepu, 1995,
2001).
One of the most frequent reasons why companies appear disposed voluntarily to offer
accounting information by Internet is their interest in showing the more favorable aspects of the
company to the market, indicating, for example, that its value has increased or that its costs of
capital have been reduced (Botosan, 1997; Frankel et al., 1999; Sengupta, 1998). When investors
have knowledge of information disclosed voluntarily by the company, combined with the
likelihood that they perceive the company to be more secure as a consequence of its greater
transparency, the company's costs of capital may decrease (Choi, 1974; Fishman and Hagerty,
1989; Healy and Palepu, 1993; Verrecchia, 1983) and stock market value may increase (Yeo and
Ziebart, 1995).
To obtain these beneficial effects, companies usually choose the most appropriate moment to
disclose their information in order to have the desired effect and impact (Abbody and Kasznik,
2000; Frankel et al., 1995; Kasznik, 1999); in most cases the effect sought is the improvement of
the apparent results of the company (Dye, 1990). There are studies showing that the share prices
react more sharply when the information provided voluntarily by the company is negative rather
than positive (Skinner, 1994), which is understandable considering the generally conservative
nature of the majority of investors. Knowing this relationship, a company will decide the best time
to release both good and bad news.
Among the factors that are traditionally considered by the company in deciding whether it
should provide more information than that legally required is the calculated cost-benefit ratio of
the information (Kelly, 1983). This ratio is subjected to increasingly rapid modification with the
arrival of new communication and information technologies. In respect to the potential benefits,
the application of these new technologies to the corporate reporting systems allows companies to
have access to many more potential users, to personalize the information provided taking into
account different profiles, to facilitate its understanding for those users who may not be trained to
interpret accounting information, to increase its quantity and quality (comparability, relevance,
completeness, clarity, etc.), and to incorporate in their organizational structures elements of
modernity, so that the company can legitimately claim to be in the forefront of current technology
applications. In this context, the systems of digital reporting give companies a real opportunity to
change and modernize outdated and inefficient financial accounting methods. Furthermore, the
high costs of producing and distributing information paper format are rapidly being reduced by
substituting the publication of information in digital format on their Web pages.
In addition to these economic-based theories, the use of interpretative approaches for
analyzing the reasons why companies adopt certain practices of transparency could help explain
the reporting practices of companies, especially in the more advanced stages of reporting by
Internet (Xiao et al., 2004: 198). From the institutional sociological perspective, attention shifts to
the institutional environment, which is seen as a source of cognitive and normative systems. Thus,
organizations exist immersed in a specific historic and cultural context (Scott and Meyer, 1985)
and thus tend to reflect models or forms originating from the environment, by means of a process
of institutionalization.
This implies that those organizations that have incorporated in their structure the key cultural
elements of their environment acquire more legitimacy than the rest (DiMaggio and Powell, 1983;
Meyer and Rowan, 1977; Zucker, 1977). The organization seeks a form of rationality that allows
it to acquire legitimacy within the social context that can be thought of as its host. It achieves
this by making a commitment to rationality, through the use of a language represented by its
accounts, which provide some techniques for controlling and organizing its activities, and offers a
vocabulary by means of which its organizational objectives, procedures and policies can be
established (Meyer, 1986; Miller, 1994).
Companies located in the Eastern European countries find themselves in a rather special
situation, because the entry of these countries into the EU means that they have to adapt to a new
cultural environment, and incorporate its symbols, rules, institutionalized beliefs and normative
systems. One of these is the need to adopt transparent reporting practices in consonance with the
stipulations laid down in the European Directive. However, although many companies are
increasingly making more effective use of the Internet for the voluntary release of information, it
is also possible to find great differences between companies in respect of the information content
of their Web pages. The purpose of this study is to analyze empirically the information provided
by the main companies of Eastern Europe via the Internet, in order to determine to what extent
they are adopting the same reporting practices as other companies of the EU and to identify the
reasons for the variation in the information that companies include in their systems of digital
corporate reporting. To do this, we employ the set of theories discussed here, and have postulated
four positively-directed hypotheses.
H1. There is an association between activity sector and the extent of information disclosure on
the Internet.
The relationship existing between the sector in which the company operates and the voluntary
provision of information by traditional mechanisms has been analyzed previously; and in some
cases, the existence of a certain dependence has been found (for example, Amernic and Maiocco,
1981; Bazley et al., 1985; Wagenhofer, 1990). In respect to Internet usage, Ettredge et al. (2001:
153) demonstrated that the presence of a company on the Internet, in other words, the fact that the
company has a corporate server, was related directly with its activity sector.
In accordance with institutional theory, this hypothesis is based on the view that different
sectors could have particular information practices (e.g. due to the need to present a particular
corporate image) and these practices could have a decisive influence on the information that
companies in that sector provide voluntarily. The need that companies have to acquire legitimacy
from their environment drives them to adopt similar practices of communicating information by
Internet to those existing in their activity sector.
From a more economic perspective, by means of signaling theory (Oyelere et al., 2003),
similar Internet reporting practices of companies belonging to the same economic grouping could
also be explained as a rational response; a company that did not provide similar information might
not be considered competitive or might be hiding unfavorable information. Firms from a
particular sector seem to adopt similar disclosure practices and, if a firm does not follow these
practices, it could be interpreted by market as a signal of bad news (Giner, 1997). On the other
hand, the theory of political costs suggests that the industrial affiliation could affect the political
vulnerability of companies (Craven and Marston, 1999). Companies operating in sectors that are
more vulnerable politically may utilize voluntary disclosure to minimize the political costs, such
as regulation, dissolution of the company/sector, etc.
With the object of identifying the activity sector to which the company belongs, the FTSE
Global Classification System has been employed. Thus, ten dichotomous variables have been
created to represent the different economic groupings covered by the FTSE Global Classification
Index; the variable takes the value 1 if the company belongs to that grouping and 0 if it does not.
These variables are the following:
EG0: basic resources
EG1: basic industries
EG2: general industry
EG3: cyclical consumer goods
EG4: non-cyclical consumer goods
EG5: cyclical services
EG6: non-cyclical services
EG7: energy, gas and water
EG8: financial
EG9: information technologies
H2. There is an association between the region of origin of the company and the extent of
information disclosure on the Internet.
The existence of differences in culture between countries has a direct influence on the amount
of information disclosed by companies (Baydoun and Willett, 1995; Fecher and Kilgore, 1994).
In this context, Hofstede (1991, 2001) analyzes the relationship between culture and accounting
and enunciates four dimensions or factors associated with national culture: distance from centre of
power, avoidance of uncertainty, individualism, and masculine predominance.
The differences in the information needs of investors in function of their nationality, the
reporting practices specific to certain countries (Saudagaran, 2001), etc., could all be factors to
take into account as possible conditions of the voluntary disclosure of information. In this respect,
earlier studies (for example, Craven and Otsmani, 1999; Gray, 1988; Gray et al., 1995) have
already considered this explanatory variable for the information provided voluntarily, and in some
instances, a positive association has been found.
However, for the case of Eastern European companies, others factors exist that could influence
any relationship between the region of origin of the company and the extent of information
disclosure on the Internet. The integration of these companies in a new economic environment
implies that the particular reporting practices of these countries take second place to the virtual
obligation of adopting the reporting practices established in the EU. In this respect, Eastern
European companies find themselves in a rather special situation, because the entry of these
countries into the EU means that they have to adapt to a new cultural environment, and
incorporate its symbols, rules, institutionalized beliefs and normative systems.
To identify the country to which the company belongs, thirteen dichotomous variable have
been created to represent the various countries studied (Bulgaria, Cyprus, Czech Republic,
Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia, Slovenia and Turkey).
The variables take the value 1 if the company belongs to that country and 0 if it does not.
H3. There is a positive association between the firm size and the extent of information disclosure
on the Internet.
The association between company size and the extent of financial disclosure has been widely
studied. The size of the company is a variable for which a significant association has been found
with respect to the information provided voluntarily (for example, Adams and Hossain, 1998;
Aitken et al., 1997; Chow and Wong-Boren, 1987; Craven and Marston, 1999; Craven and
Otsmani, 1999; Lang and Lundholm, 1993; Mckinnon and Dalimunthe, 1993). There are several
reasons that could be put forward for including this explanatory variable in our study. First, large
companies are under greater pressures to provide information as a consequence of more actual
and potential investors with interests in its evolution. Larger companies are more visible and,
consequently, have higher political costs (Watts and Zimmermann, 1978). Also, agency costs tend
to increase with the size of the company (Hossain et al., 1995). The disclosure of information
voluntarily can reduce the costs of monitoring. High agency costs can be borne more easily by
larger companies relative to those of smaller size (Oyelere et al., 2003, p.41). As a result, large
companies have stronger incentives to disseminate information by Internet if this is understood as
a way of trying to reduce their costs. Managers of larger companies are more likely to be aware of
the benefits of voluntary disclosure, such as greater facility in the financing of the company
through the issue of shares, bonds and other securities (Singhvi and Desai, 1971).
Further, the cost of preparing and producing information relative to company size and the
possibility of having access to more financial markets when seeking capital, etc., are other reasons
that may drive these companies to increase their degree of transparency. In this respect, as the
costs of producing and disclosing information increase, larger companies are able to meet the
costs of disclosure, and as a result, the benefits may increase in line with company size (Oyelere
et al., 2003). Against this, larger companies tend to be more complex, therefore their relative costs
of disclosure may be higher, but they may need to disclose more information due to their
complexity, to enable current and potential investors to take more efficient investment decisions
(Marston and Polei, 2004).
In the case of Eastern European companies, this motivation is reinforced because access to the
single market of the EU greatly increases the number of potential investors and stakeholders with
interests in their evolution, therefore increasing their political costs. In addition, the greater
number of potential users of the information reduces even further the relative costs of preparing
and disseminating the information.
Given that significant differences in accounting regulation exist between the different countries
analyzed, it is not considered appropriate to use accounting magnitudes as surrogate variables for the
business size. In addition, since the companies analyzed belong to diverse sectors of activity, each with
its particular characteristics, it was not thought advisable to use volume of assets or turnover as a
measure of size, since these are conditioned, at least in part, by the characteristics of the individual
sector. Consequently, stock market capitalization of the companies was used as surrogate variable for
company size. Thus, the variable LMVwas created by taking the natural logarithmnatural of the stock
market capitalization.
H4. There is an association between the auditor firm and the extent of information disclosure on
the Internet.
The relationship existing between the auditor firm and the extent of information disclosure on
the Internet can be explained by several different reasons. From an agency theory perspective, the
key purpose of auditing is to reduce the conflicts between the managers and owners (i.e. the
shareholders) of a company. Thus, companies that appoint one of the big international auditing
firms could have higher agency costs (Giner, 1997) and would therefore try to reduce these costs
by submitting them to the most rigorous auditing scrutiny (on the assumption that the big firms
provide better auditing) (Chow, 1982; Francis and Wilson, 1988; Jensen and Meckling, 1976).
On the other hand, these big auditing firms usually require clients to demonstrate greater
transparency, for the purposes of preserving their auditor's reputation. In effect, the Big Four audit firms
are interested in sending the market signals on the quality of their auditing procedures, through an
increase in the information provided by their clients; if they did not do so, the market might think that
the lack of information was associated with low quality auditing (DeAngelo, 1981). On this point,
Craswell and Taylor (1992) suggest that the choice of an auditor is related to the quantity of information
that the company intends to provide to the different groups of stakeholders.
As in the previous case, these motives are reinforced with the actual or prospective entry of
countries into the EU. The larger number of potential users together with greater visibility of these
companies combines to persuade those companies with higher agency costs to choose one of the
Big Four audit firm, which in turn will demand a greater degree of transparency from the
company. Thus, the existing literature indicates that companies audited by one of the Big Four
audit firms could divulge a greater quantity of information by means of the Internet. To identify
the audit firm used by these companies, we have created the dichotomous variable Big4, which
takes the value 1 if the company is audited by one of the Big Four and 0 if it is not.
3.2. Disclosure Index (DI) and sample
The evaluation of the relative quantities of information offered by companies can be made by
utilizing some type of index (Marston and Shrives, 1991). Thus, having defined the objective of this
study and the hypotheses that we wish to test, we shall move next to a description of the index of
transparency (henceforth, the DI) employed. In order to develop the index, the first step is to identify the
variables that will comprise the surrogate for business transparency utilized. The second step is to
define the formulation to be adopted in calculating the index employedin other words, determine the
values that the variables can take and whether these variables should be given some formof weighting.
The identification of the variables that will comprise the DI requires a prior process of
consideration to determine which aspects or characteristics of the information could be sufficiently
relevant for the users of accounting information and, therefore, configure the index employed.
Given that the object of this research is related to the transparency of Eastern European companies
from the point of view of their entry in the EU, we have considered that the DI employed must be
based on the framework established by the European directives. Therefore, given that this directive
has been developed relatively comprehensively in Spain, we shall utilize as the basic nucleus of the
DI, the information that Spanish companies should include in their Web pages.
In Spain, the first reference to the transparency of companies appears in the Olivencia Report
(1998), which emphasizes the responsibility of the management to the shareholders. This report
includes a series of recommendations for constituting a code of good governance, to be adopted
voluntarily by companies, on the hopeful assumption that the market would reward or punish
companies depending on how they complied with those standards of good behavior, under the
philosophy of ethical codes. The Law 44/2002 of Measures for the Reform of the Financial
System regulates the company's audit committee, the duty to communicate relevant facts,
transparency in the company's linked operations, and the use of privileged information (the Law
of the Securities Market was adapted to the Market Abuse Directive).
In January 2003 the Report of the Special Commission for the Promotion of Transparency and
Security in the Markets and Quoted Companies, better known as the Aldama Report, foresaw the
need for obligatory standards in three fundamental aspects: the duties to provide information and
transparency, the definition and regime of the duties of the managers, and the need to implement
rulings for the conduct of Boards of Directors and the General Meetings of shareholders. These
principles inspired the Law 26/2003, known as the Transparency Law, which incorporates, among
other matters, the consideration of para-social pacts and the obligatory status of the annual report
on corporate governance. From this same report, recommendations were implemented in more
depth in the Circular CNMV 1/2004 and Order ECO 3722/2003, which explicitly states what
information Spanish companies should include in their Web pages.
Thus, we developed a DI based on the Spanish regulation on corporate transparency as an
advanced example with further reference to the studies by AICPA (1994), Botosan (1997),
Debreceny et al. (2001), Ettredge et al. (2001) and Xiao et al. (2004). Spain was one of the first
European countries to apply the demands for transparency that the EU is in the process of requiring
of all its listed companies. The work of the AICPA (1994) demonstrates the information needs of
investors and lenders. Botosan (1997) uses a disclosure index based on the information firms provide
in their annual reports to shareholders to test the effect of disclosure level on the cost of equity capital.
Debreceny et al. (2001) conducted an empirical study to determine the informational attributes most
in demand by users of the information provided by companies through their corporate servers.
Ettredge et al. (2001) utilize a check list to evaluate the information provided by a group of
companies. Xiao et al. (2004) analyzes the factors behind Chinese listed companies' voluntary
adoption of Internet-based financial reporting, as well as their extent of disclosure. The 44 variables
taken into consideration are listed in Table 1.
Table 1
Variables comprising the disclosure index
V01 Balance sheet of current year
V02 Balance sheet of past years (at least, the last 2 years)
V03 Income statement of current year
V04 Income statement of past years (at least, the last 2 years)
V05 Cash flow statement of current year
V06 Cash flow statement of past years (at least, the last 2 years)
V07 Notes to financial statements of current year
V08 Notes to financial statements of past years (at least, the last 2 years)
V09 Quarterly report of current year
V10 Quarterly report of past years (at least, the last 2 years)
V11 Half-year report of current year
V12 Half-year report of past years (at least, the last 2 years)
V13 Financial ratios
V14 Audit report of current year
V15 Audit report of past years (at least, the last 2 years)
V16 Segmental reporting by line of business in current year
V17 Segmental reporting by line of business in past years (at least, the last 2 years)
V18 Annual report of current year
V19 Annual report of past years (at least, the last 2 years)
V20 Number of shares
V21 Classes of shares (if there are different types)
V22 Securities markets on which it is quoted
V23 Schematic chart with the evolution of the authorised capital
V24 Shareholder structure (composition)
V25 Communication channels used to reach shareholder/investor (e-mail, telephone, )
V26 Investor calendar (dates of main events)
V27 Information on dividends
V28 Section on relevant events
V29 Press releases updated information about the presence of the company in informative media
V30 Information about managers, at least the identity and curriculum vitae of executives
V31 Environmental information
V32 Information on intellectual capital
V33 Information on corporate strategy
V34 Corporate social responsibility
V35 Direct link to investor relations (specific item to access information for investors and shareholders)
V36 Management discussion and analysis (changes in financial figures)
V37 Projected information
V38 Frequently asked questions
V39 Link to the information of the company in data bases of supervisory bodies
V40 Financial data in processable format (such as Excel)
V41 Sitemap
V42 Internal search engine
V43 Mailing lists
V44 Date when site was last updated
With reference to the second question, each of these 44 variables may take a value of 1 or 0
depending on whether or not the company provides the class of information specified by the variable
(Giner, 1997). With respect to the possible weighting of the variables, we have discounted the use of
a weighted index because, in order to obtain the correct weighting coefficients, it would be necessary
first to identify the relative importance of each information category for each particular group of
usersin other words, different weightings would be required as a function of the user profile
considered. Thus, on the understanding that the information provided is going to be employed by
various types of users, each for different purposes, following Giner (1997) we have opted to
construct our index by simple aggregation, in such a way that the value of the index utilized is the
result of summing the scores assigned to each category of information. This type of non-weighted
index, with dichotomous variables (taking the value 1 or 0), has been utilized previously in studies
associated with the evaluation of information provided by companies via the Internet (e.g., Ettredge
et al., 2001; Larrn and Giner, 2002; Pirchegger et al., 1999).
Consequently, the DI that we have employed has a maximum value of 44 and a minimum
value of 0, in accordance with the following formulation:
DI
X
i44
i1
Vi
This DI will enable us to determine the distance existing between the information that the
companies currently provide via the Internet and the information that will be required by the EU
through the initiatives that are being developed. The greater the value of DI, the smaller the
distance that exists, providing evidence that the companies are complying more closely with the
transparency requirement through the Internet.
To achieve our objective and be able to determine first the current disclosure practices used in
the Eastern European countries and then the influencing factors, we analyzed the information
contained in the Web pages of a sample of companies located in those countries. To select the
sample, we first drew up a list of all the listed companies on the capital markets of each of the
thirteen countries. We found a total of 1543 companies, of which only 805 had a Web page. Next
we identified the Web pages that were available in the English language; this reduced the
population of the study to 630 companies.
1
From these companies, employing a maximum
admissible error of 5% and a confidence level of 95%, an optimum sample size of 266 companies
was obtained. To determine the optimum size of the sample, a stratified random sampling was
employed, taking the 13 different countries. Then having calculated the optimum size of the
sample to determine how many companies from each country to include in the sample, a
proportional sharing was made as a function of the number of companies that had a Web page in
English. Lastly, the specific companies from each country were randomly selected. The results
obtained are shown in Table 2.
To obtain the information required to test the hypotheses previously postulated, the Web page
of each company was visited and analyzed. To ensure the maximum degree of temporal
1
The use of the Internet by companies to disseminate information means that literally anyone may obtain that
information. Therefore, in addition to the medium employed, companies would have to divulge their information in a
language that does not limit the use of that information to those users whose language is that of the country of origin. This
fact is especially important for companies of those countries whose language is not well-known outside their borders. For
this reason, although it could be a limitation of the study, we consider that those companies that do not give the user the
possibility of obtaining the information in English are seriously limiting access to their information in the total European
context.
comparability, the collection of data was performed over a minimum period of time, from mid
February to mid March 2005. To find the Internet address of the different companies, the
following forms were initially entered: www.company_name.com or www.company_name.
country_indicator. In those cases where the Web page was not located by this method, it was
necessary to resort to the securities markets of the corresponding country or to general search
engines to obtain the Web address of the companies.
4. Results
4.1. Descriptive statistics
Table 3 gives a summary of the results with respect to the publication by Internet of the
information classified according to the 44 variables. The column Variable specifies the variable
analyzed; the column % of Companies gives the percentage of companies that provide that
category of information; and, lastly, in the column Order, the variables are ranked in order of
importance (from high to low) as a function of the number of companies that provide this
information.
Taking into account the results obtained in the published studies reviewed in part 2, in general
terms, the results obtained for the Eastern European companies are appreciably lower than those
obtained for the US companies or for those countries that already formed part of the EU. The best
results correspond to items related to the use of the Internet as a channel to facilitate the relationship
of the company with investors (V25, V35). The Annual Report (V18) is published by 34.5%of the
companies analyzed, which is a much better result than that for the Financial Statements
individually. Unlike the picture in other countries with a longer tradition in the use of the Internet as
a mediumfor disseminating financial information, financial information does not formthe nucleus
of digital reporting. In some cases, the balance sheet and the profit and loss account are
complemented by the cash flow statement and the audit report. Another relatively notable finding
is the use made of the Internet to communicate the general lines of company strategy (V33), and to
echo the coverage of the company appearing in the press and other news media (V29). However, it
is still fairly rare to find information provided in processable format (V40).
Table 2
Distribution of the sample by countries
Country No. of companies
Bulgaria 5
Cyprus 16
Czech Republic 13
Estonia 5
Hungary 13
Latvia 6
Lithuania 14
Malta 3
Poland 74
Rumania 23
Slovakia 15
Slovenia 8
Turkey 71
Total 266
Having identified the classes of information most frequently provided, the systems of digital
reporting used by the 266 companies analyzed have been scored, utilizing the proposed DI. The
values are shown in Tables 4 and 5.
The scores attributed to the companies are concentrated in the lower values of the index with a
large number of companies obtaining a score close to zero points. The zero score is because they
Table 3
Information variables corresponding to the companies analyzed
Variable % of companies Ranking Variable % of companies Ranking
V01 BSheet Current 16.28% 21 V23 Chart Cap. 12.40% 26
V02 BSheet Past 17.83% 17 V24 Share Struct. 31.78% 8
V03 Income St Current 17.44% 19 V25 Communication 86.43% 1
V04 Income St Past 18.60% 15 V26 Calendar 12.40% 27
V05 CashFlow Current 8.14% 32 V27 Dividend Info' 13.18% 25
V06 CashFlow Past 7.36% 34 V28 Events 26.74% 11
V07 Notes Current 6.20% 37 V29 Press releases 48.45% 4
V08 Notes Past 6.98% 35 V30 Managers 25.58% 12
V09 QR Current 11.63% 29 V31 Environ. Inf. 18.60% 16
V10 QR Past 10.85% 30 V32 Int. Capital 3.88% 42
V11 Half Yr Current 13.95% 23 V33 Corp. Strat. 64.73% 2
V12 Half Yr Past 13.18% 24 V34 Social Resp. 12.40% 28
V13 Ratios 5.81% 38 V35 Invest. Relations 55.81% 3
V14 Audit R. Current 6.59% 36 V36 Manag. Disc. 28.68% 9
V15 Audit R. Past 5.81% 39 V37 Proj. Inf. 7.75% 33
V16 Segment R Current 0.39% 43 V38 Questions 10.47% 31
V17 Segment R. Past 0.00% 44 V39 Link Sup. 5.04% 41
V18 Annual R. Current 34.50% 6 V40 Proc. Format 5.43% 40
V19 Annual R. Past 27.91% 10 V41 Sitemap 33.33% 7
V20 N. Shares 17.44% 20 V42 Search Engine 36.82% 5
V21 C. Shares 14.73% 22 V43 Mailing Lists 21.71% 14
V22 Markets 23.26% 13 V44 Updated 17.83% 18
Table 4
Distribution of the DI scores
Score % of Companies analyzed Score % of Companies analyzed
0 4.65% 17 1.16%
1 7.36% 18 5.04%
2 8.91% 19 1.16%
3 10.08% 20 1.55%
4 9.30% 21 0.78%
5 5.43% 22 0.78%
6 3.49% 23 0.78%
7 5.43% 24 1.94%
8 3.49% 25 0.39%
9 2.71% 26 0.39%
10 5.04% 27 0.78%
11 1.94% 28 0.39%
12 5.43% 29 0.78%
13 3.10% 30 0.00%
14 2.71% 31 0.00%
15 3.88% 32 0.39%
16 0.78%
do not provide any of the classes of information sought. The mean value of the DI for the
companies analyzed is relatively low. Despite some companies obtaining good results, the mean
value of the DI is of 8.66 points.
Table 6 gives the DI descriptive statistics for the different sectors. Significant differences
between the results obtained for different sectors can be seen. For example, economic groupings
like General Industry (6.21) and Cyclical Consumer Goods (6.10) obtain relatively low values in
the DI. On the other hand, sectors such as Non-cyclical Services (10.29), Energy, gas and water
(14.00) Financial (16.17) and Information technologies (11.27) show results that are in some
cases much higher than the mean.
The geographic location of the company seems to be another variable that could influence
the information provided via the Internet. Table 7 presents the descriptive statistics for the
companies located in the different countries. Attention is drawn to the large differences found
between the mean values of the DI for the different countries. There are countries whose
companies offer relatively complete information-Estonia (16), and Lithuania (14.14), in
contrast to others in which there is almost no disclosure of information-Romania (3.86),
Slovakia (5), and Cyprus (5.5).
4.2. Statistical analysis
For the joint testing of the hypotheses put forward, a multiple regression analysis by the
stepwise method was performed. This method was employed to evaluate the global dependence
of the DI variable with respect to a set of independent variables. The relationship between the
dependent variable DI and the set of independent variables that represent the economic
groupings or sectors (EG0, EG1, EG2, EG3, EG4, EG5, EG6, EG7, EG8, EG9), the various
Table 5
Statistics of the DI
No. of companies 266
Arithmetic mean 8.66
Standard deviation 7.10
Minimum value 0
Maximum value 32
Table 6
DI descriptive statistics by economic grouping
SECTOR Companies Mean DI Minimum DI Maximum DI S.D. DI
EG0: Basic resources 11 10.82 0 24 6.22
EG1: Basic industries 50 7.20 0 24 6.49
EG2: General industry 39 6.21 0 24 5.79
EG3: Cyclical consumer goods 29 6.10 0 29 6.89
EG4: Non-cyclical consumer goods 41 8.44 0 24 6.20
EG5: Cyclical services 46 7.89 1 27 6.42
EG6: Non-cyclical services 7 10.29 4 22 7.23
EG7: Energy, gas and water 8 14.00 3 26 7.46
EG8: Financial 24 16.17 3 32 7.93
EG9: Information technologies 11 11.27 3 25 6.76
Total 266 8.66 0 32 7.10
countries analyzed (Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania,
Malta, Poland, Romania, Slovakia, Slovenia and Turkey), the size measured as the natural
logarithm of the stock market capitalization (LVM), and the fact that the company is or is not
audited by one of the four large international auditing firms (Big4), is defined in the following
form:
DI a b
1
X
1
b
2
X
2
b
3
X
3
N N b
25
X
25
where
X
i
the independent variables
constant
i
coefficients of partial regression of each independent variable
In the multiple regression model, the coefficient of partial regression indicates the change that
the dependent variable undergoes with a unit change in the independent variable, taking into
consideration the effects produced by the rest of the independent variables. By utilizing the
stepwise method, the model selects one by one the independent variables that have a stronger
association with the dependent variable (DI), such that all the variables that meet the criterion
Table 7
DI descriptive statistics by country
Country Companies Mean DI Minimum DI Maximum DI S.D. DI
Bulgaria 5 6.2 2 11 4.54
Cyprus 16 5.5 0 16 4.50
Czech Republic 13 10.76 3 19 4.62
Estonia 5 16 4 24 7.61
Hungary 13 12.61 2 29 9.20
Latvia 6 7 0 12 5.05
Lithuania 14 14.14 3 27 7.97
Malta 3 11.33 7 15 4.04
Poland 74 10.81 0 32 7.68
Romania 23 3.86 0 11 3.50
Slovakia 15 5 1 18 4.88
Slovenia 8 9.13 2 15 5.14
Turkey 71 6.88 0 29 6.42
Total 266 8.66 0 32 7.10
Table 8
Regression model
Variable Coefficient Std. error t-statistic Prob.
(Constant) 1.462493 3.218284 4.544327 0.0000
BIG4 6.838265 1.069161 6.395919 0.0000
EG8 4.540015 1.643959 2.761635 0.0063
LOG_CAP 1.263648 0.202493 6.240442 0.0000
R-squared 0.507736 S.E. of regression 5.072773
Adjusted R-squared 0.500567 Sum squared resid. 5,301.004
F-statistic 70.82480 Prob (F-statistic) 0.000000
established (probability of F0.05) are included in the equation. By applying the stepwise
regression procedure to the 266 companies, utilizing the variable DI as dependent variable, the
results given in Table 8 are obtained.
The coefficient of determination of the model is 0.5, from which the variables EG8, LMVand
BIG4 explain 50% of the variance of the dependent variable (DI). The values of the t statistic
indicate that the four independent variables selected by the model are significant to 5%.
All the variables included in the model have a positive effect on the quantity of information
provided by the companies on their Web pages. Thus, the largest sized companies, those
belonging to EG8, and those that are audited by one of the Big Four auditing firms obtain a higher
score on the DI. In reference to the explanatory power, being audited by one the Big Four and
belonging to the financial sector are the variables with greater explanatory power. With respect to
the influence of the country, no relationship has been detected between the country in which the
company is located and the quantity of information provided.
5. Conclusions
The Internet is providing companies with a new medium of enormous potential through which
they can voluntarily issue information to the various groups of external users. Through their
corporate servers, companies are providing large quantities of information, both financial and
non-financial, which users can easily access. Eastern European companies are no exception and
are participating in the trend currently seen towards the increase of transparency in companies'
finances.
However, the results illustrated by the descriptive statistics show that the distance that exists
between the information currently provided by Eastern European companies that have recently
joined the EU (or are in the process of joining) and the information required by the initiatives of
the EU is still significant. To increase the transparencies of these companies, and consequently
that of the financial markets, it is necessary that the companies analyzed should devote much
more effort to the use of the Internet as a medium for the disclosure of corporate information. In
the process of doing so, they must abide by the ruling regulations of their home countries and
respect the guidelines of the EU concerning the public disclosure of company information.
Other key results of this work are that the following variables have a significant influence on
the quantity of information that the companies of Eastern Europe currently provide by Internet:
(1) having been audited by one of the Big Four accountancy firms; (2) the company's activity
being in the financial sector; and (3) company size.
The relationship existing between the auditor firm and the extent of information disclosure on
the Internet could be explained, as has previously been commented, as being due to several
different motives. Thus, the companies that have recourse to the largest auditing firms are those
that could have larger agency costs as a consequence of the conflicts existing between the
managers and the shareholders. Therefore they try to reduce these costs by submitting their
accounts to the most rigorous auditing scrutiny; by doing so, and as a result of the requirements of
the auditors themselves, this usually leads to more transparency, because this helps the auditors to
maintain their good reputation.
In respect of the activity sector, the classification of the company to the financial sector is
correlated with the quantity of information that it provides by Internet. The need to present a good
image to possible clients and investors by adopting practices of transparency similar to those of
the rest of the companies of its sector is a possible explanation. In this respect, the new threats and
opportunities that companies of the financial sector in Eastern Europe have to face as a
consequence of the free movement of capital existing in the EU almost obliges them to
disseminate information by Internet, so that the capital market does not interpret the absence of
information as a sign of bad news.
The relationship between company size (measured by volume of stock market capitalization)
and the information provided voluntarily by Internet has also been demonstrated. In this case, the
pressures exerted on the largest companies for more information disclosure by the relatively larger
number of users of their accounting information, together with the lower relative cost for such
companies of maintaining their information on the Internet, seem be determining factors.
Among the future lines of research suggested by these results, it could be useful to repeat this
study in the future to analyze the evolution and check to what extent these countries that are
joining the EU increase the use that their companies make of the Internet for publishing
accounting information. Furthermore, the study could be extended to the analysis of other
relationships such as, for example, the relationship between transparency and the cost of capital,
the value of the beta coefficient, or the market value/book value of the company.
In summary, this study shows that the principal companies of these countries are using the
Internet to provide a considerable quantity of information, and thus accept the importance of this
medium in the process of corporate reporting. The results obtained seem to indicate that the
information and communication technologies, in general, and the Internet in particular, have
modified the cost-benefit relationship of the voluntary information provided. Thus companies
seem to be taking advantage of the opportunities offered them by the Internet, in respect of the
greater number of potential users of the information they prepare, the reduced relative cost of
producing and communicating this information, the improvement of their corporate image, etc.;
this conclusion is clearly demonstrated in the progressive increase of the corporate presence on
the Internet and of the voluntary information disclosed through this medium.
Acknowledgements
The present paper was made possible by financial support fromthe Spanish Ministry of Science
and Technology. Research project BEC2001-3356. We would like to thank Francisco Flores and
Ana Jess, undergraduate students of the University of Huelva, for their work on Internet
information retrieval.
References
Abbody D, Kasznik R. CEO stock option awards and the timing of corporate voluntary disclosures. J Account Econ
2000:73-100 [February].
Adams M, Hossain M. Managerial discretion and voluntary disclosure: empirical evidence from the New Zealand life
insurance industry. J Account Public Policy 1998;17(3):24581.
AICPA. Improving business reporting A customer focus: meeting the information needs of investors and creditors.
Report of the Special Committee on Financial Reporting. New York: American Institute of Certified Public
Accountants; 1994.
Aitken M, Hooper C, Pickering J. Determinants of voluntary disclosure of segment information: a re-examination of the
role of diversification strategy. Account Financ 1997;37(1):89-109.
Amernic J, Maiocco M. Improvements in disclosure by Canadian public companies. Cost Manag 1981:1620
[NovemberDecember].
Baydoun N, Willett R. Cultural relevance of western accounting systems to developing countries. Abacus 1995;31
(1):6792.
Bazley M, Brown P, Izan HY. An analysis of lease disclosures by Australian companies. Abacus 1985;21(1):4463.
Bonsn E, Escobar T. A survey on voluntary disclosure on the Internet. Empirical evidence from 300 European Union
companies. Intl J Digit Account Res 2002;2(1):2753.
Bonsn E, Escobar T, Snchez M. Corporate digital reporting in Europe. A survey on Eurostoxx50 companies. 3rd Eur
Conf in Acc Inf Sys; 2000. Munich, Germany.
Botosan CA. Disclosure level and the cost of equity capital. Account Rev 1997;72(3):32349.
Choi FD. Financial disclosure in relation to a firm's capital costs. Account Bus Res 1974:28292 [Autumn].
Chow CW. The demand for external auditing: size, debt and ownership influences. Account Rev 1982;57:27291.
Chow CW, Wong-Boren A. Voluntary financial disclosure by Mexican corporations. Account Rev 1987;62:53342.
Craswell AT, Taylor SL. Discretionary disclosure of reserves by oil and gas companies: an economic analysis. J Bus
Finance Account 1992;19:295309.
Craven BM, Marston CL. Financial reporting on the Internet by leading UK companies. Eur Account Rev 1999;8(2):32133.
Craven BM, Otsmani B. Social and environmental reporting on the Internet by leading UK companies. 22st Ann Congress
of the Eur Acc Assn; 1999. Bordeaux France.
DeAngelo LE. Auditor size and audit quality. J Account Econ 1981;3:18399.
Debreceny R, Gray G, Barry T. The electronic dissemination of accounting information resource discovery, processing and
analysis. 22nd European Accounting Association Conference, France; 1999.
Debreceny R, Gray GL, Mock TJ. Financial reporting Web sites: what users want in terms of form and content. Intl J Digit
Account Res 2001;1(1):1-23.
Debreceny R, Gray GL, Rahman A. The determinants of Internet financial reporting. J Account Public Policy 2002;21
(4,5):371.
Deller D, Stubenrath M, Weber C. Investor relations and the Internet. Background, potential application and evidence from
the USA, UK and Germany. 21st Ann Congress of the Eur Acc Assn; 1998. Amberes, Belgium.
DiMaggio PJ, Powell WW. The iron cage revisited: institutional isomorphism and collective rationality in organizational
fields. Am Sociol Rev 1983;48:14760.
Dye RA. Mandatory versus voluntary disclosures: the cases of finance. Account Rev 1990;65:1-24.
Ettredge M, Richardson VJ, Scholz S. The presentation of financial information at corporate Web sites. Intl J Account Inf
Syst 2001;2:14968.
Ettredge M, Richardson VJ, Scholz S. Dissemination of information for invertors al corporate Web sites. J Account Public
Policy 2002a;21:35769.
Ettredge M, Richardson VJ, Scholz S. Timely financial reporting at corporate web sites. Commun ACM 2002b;45
(6):6771.
FASB. Electronic distribution of business reporting information. Financial Accounting Standard Board; 2000.
FASB. Improving business reporting: insights into enhancing voluntary disclosures. Financial Accounting Standard
Board; 2001.
Fecher H, Kilgore A. The influence of cultural factors on accounting practices. Int J Account 1994;29(3):26577.
Fishman MJ, Hagerty KM. Disclosure decisions by firms and the competition for price efficiency. J Finance 1989;44
(3):63346.
Francis JR, Wilson ER. Auditor changes: a joint test of theories relating to agency costs and auditor differentiation.
Account Rev 1988;63:66382 [October].
Frankel R, McNichols M, Wilson GP. Discretionary disclosure and external financing. Account Rev 1995:13551 [January].
Frankel R, Johnson M, Skinner DJ. An empirical examination of conference calls as a voluntary disclosure medium. J
Account Res 1999:13350 [Spring].
Giner B. The influence of company characteristics and accounting regulation on information disclosed by Spanish firms.
Eur Account Rev 1997;6(1):4568.
Gowthorpe C, Amat O. External reporting of accounting and financial information via the Internet in Spain. Eur Account
Rev 1999;8(2):36571.
Gray SJ. Towards a theory of cultural influence on the development of accounting systems internationally. Abacus 1988;24
(1):1-15.
Gray G, Debreceny R. Corporate reporting on the Internet: opportunities and challenges. Working paper. California State
University; 1997.
Gray SJ, Meek GK, Roberts CB. International capital market pressures and voluntary annual report disclosures by U.S. and
U.K. multinationals. J Int Financ Manag Account 1995:4369 [Spring].
Healy PM, Palepu KG. The effect of firm' financial disclosure strategies on stock prices. Account Horiz 1993;7(2):1-11.
Healy PM, Palepu KG. The challenges of investors communication. The case of CUC International Inc. J Financ Econ
1995;38(2):11140 [June].
Healy PM, Palepu KG. Information asymmetry, corporate disclosure, and the capital markets: a review of the empirical
disclosure literature. J Account Econ 2001;31(13):405 [September].
Hedlin P. The internet as a vehicle for investor information; the Swedish case. Eur Account Rev 1999;8(2):37381.
Hofstede G. Cultures and organizations. McGraw-Hill; 1991.
Hofstede G. Culture's consequences. second edition. Sage Publications; 2001.
Hossain M, Perera HB, Rahman AR. Voluntary disclosure in the annual reports of New Zealand companies. J Int Financ
Manag Account 1995;6:6987.
ICAEW. The 21st century annual reporting. London: The Institute of Chartered Accountants in England and Wales; 1998.
ICAEW. Digital reporting: a progress report. London: The Institute of Chartered Accountants in England and Wales; 2004.
IFAC. Financial reporting on the Internet. International Federation of Accountants; 2002. August.
Jensen MC, Meckling WH. Theory of the firm: managerial behaviour, agency costs and ownership structure. J Financ
Econ 1976;3:30561.
Kasznik R. On the association between voluntary disclosure and earnings management. J Account Res 1999:5781 [Spring].
Kelly L. The development of a positive theory of corporate management's role in external financial reporting. J Account
Lit 1983:11150.
Lang M, Lundholm R. Cross-sectional determinants of analyst ratings of corporate disclosures. J Account Res 1993;31
(2):24672 [Autumn].
Larrn M, Giner B. The use of the Internet for corporate reporting by Spanish companies. Intl J Digit Account Res 2002;2
(1):5585 [JanuaryJuly].
Lont D. Financial disclosure on the Web: New Zealand evidence. Financial Reporting and Business Communication
Research Unit Sixth Annual Conference; 2003. 34 July.
Lymer A. The use of the Internet for corporate reporting. A discussion of the issues and survey of current usage in the UK.
21st Annual Congress of the European Accounting Association; 1998. Antwerp, Belgium.
Lymer A, Tallberg A. Corporate reporting and the Internet a survey and commentary on the use of the WWW in
corporate reporting in the UK and Finland. 20th Annual Congress of the European Accounting Association; 1997.
Graz, Austria.
Lymer A, Debreceny R, Gray G, Rahman A. Business reporting on the Internet. London: IASC; 1999.
Marston CL, Shrives PJ. The use of disclosure indices in accounting research: a review article. Br Account Rev 1991;23
(3):195210 [September].
Marston CL, Polei A. Corporate reporting on the Internet by German companies. Int J Account Inf Syst 2004;5:285311.
Mckinnon JL, Dalimunthe L. Voluntary disclosure of segment information by Australian diversified companies. Account
Finance 1993;33(1):3351 [May].
Meyer JW. Social environment and organizational accounting. Account Organ Soc 1986;11:34556.
Meyer JW, Rowan B. Institutionalized organizations: formal structure as myth and ceremony. Am J Sociol 1977;83(2):34063.
Miller P. Accounting as social and institutional practice: an introduction. In: Hopwood, Miller, editors. Accounting as a
social and institutional practice. Cambridge: Cambridge University Press; 1994.
Olivencia Report. El buen gobierno de las sociedades. Comisin Nacional del Mercado de Valores; 1998.
Oyelere P, Laswad F, Fisher R. Determinants of Internet financial reporting by New Zealand companies. J Int Financ
Manag Account 2003;14(1):2663.
Pirchegger B, Schader H, Wagenhofer A. Financial information on the Internet. A survey of the homepages of Austrian
companies. Eur Account Rev 1999;8(2):38395.
Saudagaran S. International accounting: a user perspective. London, South-Western: Thomson Learning; 2001.
Scott WR, Meyer JW. The organization of societal sectors. In: Meyer, Scott, editors. Organizational environments: ritual
and rationality. 3 edition. Beverly Hills: Sage Publications Inc.; 1985. p. 12953.
Sengupta P. Corporate disclosure quality and the cost of debt. Account Rev 1998;73(4):45974.
Singhvi SS, Desai HB. An empirical analysis of the quality of corporate financial disclosure. Account Rev 1971:12938 [January].
Skinner DJ. Why firms voluntarily disclose bad news. J Account Res 1994;32(1):3860.
Spaul B. Corporate dialogue in the digital age. London: The Institute of Chartered Accountants in England and Wales
(ICAEW); 1997.
Verrecchia RE. Discretional disclosure. J Account Econ 1983;5(3):17994.
Wagenhofer A. The demand for disclosure and actual disclosure by firms. 13th Annual Congress of the European
Accounting Association; 1990. Budapest.
Watts RL, Zimmermann JL. Towards a positive theory of the determination of accounting standards. Account Rev
1978;53:11234.
Xiao JZ, Yang H, Chow CW. The determinants and characteristics of voluntary Internet-based disclosures by listed
Chinese companies. J Account Public Policy 2004;23:191225.
Yeo GH, Ziebart DA. An empirical test of the signaling effect of management's earnings forecasts: a decomposition of the
earnings surprise and forecast surprise effects. J Account Audit Financ 1995;10(4):787802.
Zucker LG. The role of institutionalization in cultural persistence. Am Sociol Rev 1977;42:72643 [October].

NOU FB Internet Disclosure CEE

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

NOU FB Internet Disclosure CEE

Uploaded by

Copyright:

Available Formats

Digital reporting in Eastern Europe: An empirical study

You might also like