DETERMINANTS OF INTERNET FINANCIAL REPORTING IN AFRICAN MARKETS: THE CASE OF MAURITIUS Academic Article uri icon

abstract

  • The Internet has revolutionized the way individuals and companies access and share information. Companies can now disseminate more information on a timely manner to stakeholders. Using mixed theoretical perspectives on corporate reporting including legitimacy, stakeholder, and signalling theories, this study investigates the extent and determinants of corporate reporting on the Internet by firms listed on the official market of the Stock Exchange of Mauritius (SEM). We use content analysis to examine information disclosed on firms’ websites. Data is collected from 34 companies’ websites including includes companies on the Official Market of the SEM. A disclosure index consisting of 52 items (mandatory and voluntary items) is constructed based on previous studies and adapted to the Mauritian context is used to measure the extent of Internet Financial Reporting (IFR). The results indicate that company size, board size, and liquidity are significant explanatory variables for the level of IFR. However, we find no significant relationship between other variables (leverage, profitability, and audit quality) and the level of IFR. To the best of our knowledge, no prior studies on drivers of IFR in Mauritius is available. Therefore this study contributes to the scarce literature on IFR in the African region and Mauritius. The findings of this study are expected to benefit several stakeholders including firms, legislators, and investors. It provides a broader picture of the characteristics of firms which use the Internet to report financial and non-financial information. Firms subject to the study can benchmark their IFR practices with the average of all firms and take appropriate actions to enhance their visibility to investors. Regulators and legislators can compare the IFR performance of Mauritian listed companies with emerging stock markets to issue guidelines for enhancing disclosure on the Internet. Investors require information to make informed investment decisions. The findings of this study can guide them as to which corporate characteristics are associated with higher Internet disclosures, thus saving them time in screening investment options.

publication date

  • 2016