Presented by:

HUSNIYATI BINTI MOHD AMIN G1428528

NUR AZERA BINTI MOHAMAD G1425132
NUR 'ATIQAH BINTI YAHAYA G1318226
SAPIROH G1314758

COMPREHENSIVENESS
OF INTERNET
REPORTING BY
CARIBBEAN COMPANIES

Presentation Outline
Introduction
Literature Review
Methodology
Data Analysis & Findings
Summary, Discussion, Conclusion &
Limitation of Study

Introduction
TITLE

Comprehensiveness of Internet Reporting by Caribbean

Companies

AUTHOR

Anthony R. Bowrin

JOURNAL

Journal of Accounting in Emerging Economics, Vol. 5, No. 1,

pp. (2-31)

PURPOSE

To examine the comprehensiveness of online disclosure.

To study the extent to which the companies adopt
internet technologies.
To discover the extent to which firm size industry
affiliation, listing status & CEO role duality are related to
firms CIR practices.

Importance of CIR for Caribbean

Companies
Information for international investors:
Firms are competing for equity capital in
globalized financial markets due to technological
advancement and reformation of regulatory
system.
Information for local entities:
Due to declining in government resources and
increasing in the traditional financing resources
(debt), Caribbean states have increasingly looked
at the private sector as the engine of economic .

Literature Review

Factors influencing CIR

Company
Size

Industry
Affiliation

Foreign
(cross)
Listing

CEO
Role
Duality

Company Size
Positively related to the comprehensiveness of CIR.
Author

Explanation

Tosi et al. (2000)

Due to the greater economic and

political visibility of larger firms.

Ezat and El-Masry (2008)

Larger firms able to reduce the

cost of greater visibility.

Singhvi and Desai (1971)

Larger firms have diverse product

range.

Allam and Lymer (2003)

Cost of production & dissemination

on the internet is cheaper for
larger firms due to sophisticated
MIS & databases.

H1: Larger companies are likely to provide more comprehensive

internet reporting than their smaller counterparts.

Industry Affiliation
Author

Explanation

Craven and Marston (1999)

More politically vulnerable companies

opt for voluntary disclosure to
minimize political costs.

Companies in the banking, financial services, and insurance industry are likely
to provide more comprehensive CIR.
Positive relationship

Negative relationship

Pervan (2005); Simon (2008); AlLymer (1997) Mohamed et al. (2009)

Shammari (2007); Dutta et al. (2010);
Mohamed and Oyelere (2008)

H2: Companies in the banking, financial services, and insurance

industry are likely to provide a different level of internet reporting than
their counterparts in other industries.

Foreign (cross) Listing

Author

Explanation

Meeks and Saudagaran (1990)

Cross-listed firms put additional

disclosure in response to
international capital market
pressures.

Aly et al. (2010)

Engage in CIR to reduce information

asymmetries between domestic and
foreign investors.

Positive relationship

Negative or no relationship

Desoky (2009); Xiao et al. (2004)

Debreceny et al. (2002); Oyelere at

al. (2003)

H3: Cross-listed companies are likely to provide a different level of

internet reporting than companies that are listed on only one stock
exchange.

CEO Role Duality

CEO role duality occurs when CEO is also the chair of the board of
directors (Abdelsalam et al., 2007).
Author

Findings

Kelton and Yang (2008); Cadbury

Report (1992); Forker (1992); Gul
and Leung (2004); Abdelsalam et
al. (2007); Turrent and Ariza (2012)

Negatively related to voluntary

disclosure.
Due to agency theory.

Haniffa and Cooke (2002)

Positive relationship.

Ghazali and Weetman (2006)

No significant relationship.

H4: CEO role duality is related to the comprehensiveness of CIR.

Control Variables

Importance of Public Equity

Company Age
Company
Profitability
Financing

Methodology
Sample

65 companies listed on main tier of at least one of the four

Caribbean stock exchanges in Nov 2009.

Data
Collection

Market cap, industry affiliation & listing status was collected

from the website of Caribbean stock exchanges.
The info used to determine the importance of public equity
financing was sources from CIA World Factbook (2011).

CIR Index

Was developed based on extensive review of the CIR

literature and the UN (2006) Guidance on Good Practices
in Corporate Governance Disclosure.

Descriptive Statistics

Data Analysis &

Findings

21.5% belongs to Banking, Financial Services &

Insurance; 78.5% from Other industries

18.5% firms were cross-listed

18.5% CEO holds dual position

Table 1: Descriptive information

Most disclosed: general content items (77.0%)

Table 2: Comprehensive of CIR

29% of Caribbean firms are using social network features

in their internet reporting.

Table 3: Descriptive statistics for advanced internet reporting features

Univariate Analysis

Data Analysis &

Findings

Company Size

Industry Affiliation

Statistically significant
Larger
firms
provide
more
disclosure.
Provide preliminary support for H1.

Statistically significant.
Firms in the banking, finance and
insurance industry provided more
comprehensive CIR disclosure.
Provide preliminary support for H2.

Cross-listing

CEO Role Duality

Statististically significant.
Cross-listed
firms
provided
more
comprehensive CIR disclosures.
Provide preliminary support for H3.

Not statistically significant.

Firms with CEO role duality provided a
comparable level of internet reporting.
Do not provide preliminary support for H4.

Multivariate Analysis

Data Analysis &

Findings

Main Model

Company size had the highest correlation with the overall

level of CIR may be the best predictor of overall CIR.

Table 4: Correlation matrix and tolerance statistics for regression

variables

OLS Regression Robustness Tests

All 6 models are statistically significant (p 0.021) for both unranked

and ranked scores.

H1 was supported for the 6 dependent variables (p 0.001).

H2 was supported only in the case of the usability element of the

disclosures provided on the web sites of Caribbean companies (p
0.012).

H3 was supported for the comprehensiveness of CIR (p = 0.002),

general content (p = 0.030), the credibility of disclosures (p = 0.009),
and the timeliness of disclosures (p = 0.049).

H4 was not supported for any aspect of CIR.

Control variables:
Importance of public equity financing:
significant and negatively related to
general CIR content, and the timeliness
of CIR (p 0.004).

Neither company age, nor company

profitability was significantly related to
CIR comprehensiveness.

Table 5: Determinants of CIR comprehensiveness: results of OLS regression

full and reduced models

Table 6: Determinants of CIR comprehensiveness: results of OLS regression

full and reduced models

Table 6: Determinants of CIR comprehensiveness: results of OLS regression

full and reduced models

Summary, Discussion,
Conclusion, &
Limitation of Study

Summary & Discussion

related
to
Company Size & Positively
comprehensiveness CIR, content,
Listing Status
timeliness & credibility of CIR.

Industry
affiliation

Positively related to usability of CIR

only.

Relationship
CEO role duality
supported.

with

CIR

is

not

Summary & Discussion

CIR is
A cost-effective mechanism for companies which
Dealing with international capital market
Listed on more than one stock exchange

Important in public equity financing for a countrys

economy.

Caribbean companies:
Used very low level of processable reporting formats,
social media and latest web.
Not
taking full advantage of communication
opportunities offered by CIR.

Conclusion & Limitation of Study

Conclusion

Limitation
of Study

Only 45% of the disclosures included in the

index.
Incentive is needed to encourage public
companies to improve their internet reporting.

Data reliability
CIR nature
Index used not suitable for replication
In-depth view