Determinant of Financial Instruments Disclosure Quality Among Listed Firms in Malaysia

27 Pages Posted: 10 Jul 2008

See all articles by Mohamat Sabri Hassan

Mohamat Sabri Hassan

Universiti Kebangsaan Malaysia - School of Accounting

Norman Mohd-Saleh

Universiti Kebangsaan Malaysia - Faculty of Economics and Management

Mara Ridhuan Che Abdul Rahman

Universiti Kebangsaan Malaysia

Date Written: July 10, 2008

Abstract

A lack of proper reporting guidelines on the reporting of the market value of financial instruments may lead to poor disclosure of the value of firms' financial instruments (and net worth). This poor disclosure may subsequently mislead the investors in making their investment decisions. This paper investigates the disclosure quality of financial instruments disclosure of Malaysian firms listed in the Bursa Malaysia. In this paper we explore the association between the disclosure quality of financial instruments information and the firm characteristics. We measure disclosure quality based on a disclosure index which is based on seven categories of information required in Malaysian Accounting Standards Board (MASB) 24 Financial Instruments: Disclosure and Presentation. Our results indicate that on average the disclosure quality among Malaysian firms is low. However, the level of disclosure is increasing, especially in the period immediately after the issuance of MASB 24. We find that firm size, debt to total assets, and risk management committee are associated with disclosure quality of financial instruments. Further, we also find that post period is highly related with disclosure quality. This indicates that the implementation of financial instruments disclosure standards does influence firms to provide high quality of reporting.

Keywords: financial instruments, disclosure quality, firms characteristics, disclosure index, Malaysia

JEL Classification: M41, M45, M47, G13

Suggested Citation

Hassan, Mohamat Sabri and Mohd-Saleh, Norman and Che Abdul Rahman, Mara Ridhuan, Determinant of Financial Instruments Disclosure Quality Among Listed Firms in Malaysia (July 10, 2008). Available at SSRN: https://ssrn.com/abstract=1157788 or http://dx.doi.org/10.2139/ssrn.1157788

Mohamat Sabri Hassan (Contact Author)

Universiti Kebangsaan Malaysia - School of Accounting ( email )

Faculty of Economics and Business
Universiti Kebangsaan Malaysia
Bangi, Selangor 43600
Malaysia
+603 8921 5731 (Phone)
+603 8921 3162 (Fax)

HOME PAGE: http://www.ukm.my/fep

Norman Mohd-Saleh

Universiti Kebangsaan Malaysia - Faculty of Economics and Management ( email )

Selangor
Bangi, Selangor, 43600
Malaysia

Mara Ridhuan Che Abdul Rahman

Universiti Kebangsaan Malaysia ( email )

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
1,170
Abstract Views
5,370
Rank
33,624
PlumX Metrics