Disclosure of Voluntary Accounting Ratios by Malaysian Listed Companies

Journal of Financial Reporting and Accounting, Vol. 6, No. 1, 2008

27 Pages Posted: 3 Nov 2008 Last revised: 14 Sep 2015

See all articles by Azrul Abdullah

Azrul Abdullah

Universiti Teknologi MARA; Fakultas Vokasi

Ku Nor Izah Ku Ismail

Universiti Utara Malaysia - School of Accountancy

Date Written: October 8, 2008

Abstract

Accounting ratios are believed to be of fundamental importance in financial analysis, and therefore are useful addition to financial reports. This paper examines the reporting of voluntary accounting ratio by Malaysian companies in corporate annual reports. Drawing on agency and signaling theories, this paper explores whether associations exist between company performance and voluntary disclosure of accounting ratios. In particular, associations are tested between the extent of ratio disclosure and company performance (namely profitability, liquidity, leverage, and company efficiency), size and industry. Six hypotheses are tested using data collected from 2003 annual reports of 100 Malaysian listed companies. This paper provides evidence that the extent of voluntary ratio disclosure is low; and size, industry as well as liquidity significantly influence the reporting of ratios in corporate annual reports. The implications of these findings are discussed.

Keywords: Accounting ratios, disclosure, financial report, Malaysia

JEL Classification: G29, M41, M45, M47

Suggested Citation

Abdullah, Azrul and Ku Ismail, Ku Nor Izah, Disclosure of Voluntary Accounting Ratios by Malaysian Listed Companies (October 8, 2008). Journal of Financial Reporting and Accounting, Vol. 6, No. 1, 2008, Available at SSRN: https://ssrn.com/abstract=1281206

Azrul Abdullah

Universiti Teknologi MARA ( email )

Universiti Teknologi MARA
Perlis Branch, Arau Campus
Arau, Perlis 02600
Malaysia

Fakultas Vokasi ( email )

Universitas Airlangga, Surabaya, Indonesia
waqar.ahmed.m-2018@feb.unair.ac.id
surabaya, AK jawa timur 60115
Indonesia

Ku Nor Izah Ku Ismail (Contact Author)

Universiti Utara Malaysia - School of Accountancy ( email )

Sintok, Kedah Darul Aman 06010
Malaysia

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