Implications of Shariah on the voluntary disclosure of Indonesian listed companies
Purpose – The purpose of this paper is to investigate and compare the extent of voluntary disclosure in the annual reports of Shariah- and non–Shariah-compliant companies in Indonesia. Further, the study examines the relationship between voluntary disclosure and company characteristics (i.e. size o...
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| Format: | Article |
| Language: | English |
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Emerald Group Publishing Limited
2014
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| Online Access: | http://irep.iium.edu.my/37666/ http://irep.iium.edu.my/37666/ http://irep.iium.edu.my/37666/1/JFRA_-_Implications_of_Shariah_on_voluntary_disclosures_of_Indonesian_listed_companies.pdf |
| Summary: | Purpose – The purpose of this paper is to investigate and compare the extent of voluntary disclosure in the annual reports of Shariah- and non–Shariah-compliant companies in Indonesia. Further, the
study examines the relationship between voluntary disclosure and company characteristics (i.e. size of
company, profitability, type of auditor, type of industry and ownership structure).
Design/methodology/approach – Voluntary disclosure was measured using a disclosure index
with 30 items and content analysis of the 2009 annual report. Statistical analysis included descriptive,
Mann–Whitney U and regression.
Findings – The result revealed that there is a statistically significant difference in the quantity and
quality of voluntary disclosure value of Shariah- and non–Shariah-compliant companies. For
regression results, the company size significantly influences the quantity of voluntary disclosure while
the quality of voluntary disclosure is affected by company size and type of industry.
Research limitations/implications – Although this study only analyses voluntary disclosure in
the annual report for a single year (2009), it is hoped to provide a description of the voluntary disclosure
in Shariah- and non–Shariah-compliant companies.
Practical implications – The findings might be used by regulators to set regulations that encourage
the quantity and quality of disclosure practice of Shariah-compliant companies to expand the scope of
disclosure related to religious activities.
Originality/value – This study measures voluntary disclosure using the disclosure index based on
Indonesian regulations and the quantity and quality measurement of Shariah-compliant companies,
which may differ from previous Indonesian studies. |
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