Corporate Internet Reporting of Banking Industry and LQ45 Firms: An Indonesia Example
26 Pages Posted: 13 Aug 2008 Last revised: 19 Aug 2008
Date Written: August 11, 2008
The technology revolution, in particular the advent of computer technology, has significantly impacted accounting practice and accounting communication. Many companies are now utilizing the advantages of the Web for disseminating financial information. Users of company information can benefit from cost savings in printing and distribution while broadening their disclosure. Users can benefit in a variety of ways depending on the extent to which the capabilities of the medium are exploited. Possibilities include enhanced timeliness, ease of access and search, and improved facilities for data extraction, automatic comparisons, and analysis. The ability of the medium to handle the reporting of greatly expanded information fits well with recent calls in accounting for increased disclosure of a broad range of information.
The purpose of this study was to measure the quality of Internet Financial Reporting of the banking sector and LQ-45 frims on the Jakarta Stock Exchange. An index was developed by basing closely on the work of Cheng et al. (2000) who had devised their framework from three stages of website financial reporting as identified by Lymer et al. (1999). The index developed by Cheng et al. (2000) tended to favor the importance of technology rather than the content of financial statements. Therefore, in order to add weight to content over technology enhancements, the index criteria were divided into four parts and assigned weights - content (40%), timeliness (20%), technology (20%) and user support (20%).
The sample consist of 19 banking sector and 35 LQ 45 firms. The statistic method used to compare internet financial reporting between banking sector and LQ 45 firms is independent sample t-test. The result show that banking sector have highest score on technology and user support component than LQ 45 firms.
Keywords: internet financial reporting, website, traditional financial reporting, internet, financial statement, technology
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