Implications of Shariah on the voluntary disclosure of Indonesian listed companies

Peni Nugraheni · Hairul Azlan Annuar

12 citations0/0 files storedJournal of financial reporting & accounting

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Auditing, Earnings Management, Governance Islamic Finance and Banking Studies Corporate Social Responsibility Reporting

Abstract

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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References

2000The separation of ownership and control in East Asian Corporations 1996Some determinants of social and environmental disclosures in New Zealand companies 2005The impact of culture and governance on corporate social reporting 2002Culture, Corporate Governance and Disclosure in Malaysian Corporations 1999Exploring the reliability of social and environmental disclosures content analysis 1995Factors Influencing Voluntary Annual Report Disclosures By U.S., U.K. and Continental European Multinational Corporations 2004Board leadership, outside directors’ expertise and voluntary corporate disclosures 2001Social and Environmental Disclosure and Corporate Characteristics: A Research Note and Extension

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2021AKUNTABILITAS BERBASIS AMANAH PADA PONDOK PESANTREN 2021Good corporate governance practices and voluntary disclosure in companies listed in the Indonesia Sharia Stock Index (ISSI)

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