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Regulatory change and the quality of compliance to mandatory disclosure requirements: Evidence from Bangladesh

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  • Hasan, Tanweer
  • Karim, Waresul
  • Quayes, Shakil

Abstract

This study investigates the effectiveness of changes in the regulatory environment on the quality of compliance to mandatory disclosure requirements in Bangladesh. Statistical analysis of the Mandatory Disclosure Index, as developed in this paper using annual reports of the exchange-listed firms pre and post changes in the regulatory environment, shows a significant improvement in the quality of compliance during the more regulated time period. The size of the firm, the qualification of its accounting staff that prepares financial statements and the reputation of its auditing firm have significant positive impact on the quality of compliance. The analysis points to two additional important findings: lack of a firm's profitability does not seem to affect the quality of its compliance, and the performance of domestic firms are at par with foreign affiliated firms as far as the quality of the compliance is concerned. The findings reported in the present study lend support to the conventional notion that well packaged and timed regulations can foster sustainable development in the overall reporting environment of a country.

Suggested Citation

  • Hasan, Tanweer & Karim, Waresul & Quayes, Shakil, 2008. "Regulatory change and the quality of compliance to mandatory disclosure requirements: Evidence from Bangladesh," Research in Accounting Regulation, Elsevier, vol. 20(C), pages 193-203.
    • Handle: RePEc:eee:reacre:v:20:y:2008:i:c:p:193-203
    DOI: 10.1016/S1052-0457(07)00211-1
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    References listed on IDEAS

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    1. Robbins, Wa & Austin, Kr, 1986. "Disclosure Quality In Governmental Financial Reports - An Assessment Of The Appropriateness Of A Compound Measure," Journal of Accounting Research, Wiley Blackwell, vol. 24(2), pages 412-421.
    2. Owusu-Ansah, Stephen, 1998. "The impact of corporate attribites on the extent of mandatory disclosure and reporting by listed companies in Zimbabwe," The International Journal of Accounting, Elsevier, vol. 33(5), pages 605-631.
    3. Begoña Giner Inchausti, 1997. "The influence of company characteristics and accounting regulation on information disclosed by Spanish firms," European Accounting Review, Taylor & Francis Journals, vol. 6(1), pages 45-68, May.
    4. Haitovsky, Yoel, 1969. "Multicollinearity in Regression Analysis: Comment," The Review of Economics and Statistics, MIT Press, vol. 51(4), pages 486-489, November.
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    Cited by:

    1. Ripon Kumar Dey & Syed Zabid Hossain & Zabihollah Rezaee, 2018. "Financial Risk Disclosure and Financial Attributes among Publicly Traded Manufacturing Companies: Evidence from Bangladesh," JRFM, MDPI, vol. 11(3), pages 1-16, August.
    2. Nurunnabi, Mohammad, 2014. "‘Does accounting regulation matter?’: An experience of international financial reporting standards implementation in an emerging country," Research in Accounting Regulation, Elsevier, vol. 26(2), pages 230-238.
    3. Gao, Lei & Kling, Gerhard, 2012. "The impact of corporate governance and external audit on compliance to mandatory disclosure requirements in China," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 21(1), pages 17-31.
    4. M N, Nikhil & Chakraborty, Suman & B M, Lithin & Lobo, Lumen Shawn, 2023. "Does the adoption of Ind AS affect the performance of firms in India?," MPRA Paper 117247, University Library of Munich, Germany, revised 18 Apr 2023.
    5. Islam, Majidul & Hossain, Ashrafee Tanvir, 2017. "Compliance with accounting standards by financial Institutions: Some evidence from Bangladesh," Research in Accounting Regulation, Elsevier, vol. 29(2), pages 145-151.
    6. Oktavia Nurlianto & khoirul aswar, 2020. "A Conceptual Framework on the Financial Statement Disclosure in Indonesia Local Government," Journal of Economics and Behavioral Studies, AMH International, vol. 12(3), pages 65-69.
    7. M N, Nikhil & S Shenoy, Sandeep & Chakraborty, Suman & B M, Lithin, 2023. "Does the Ind AS moderate the relationship between capital structure and firm performance?," MPRA Paper 119541, University Library of Munich, Germany, revised 15 Oct 2023.
    8. Nurunnabi, Mohammad, 2014. "The role of the Securities and Exchange Commission in a developing economy: Implications for IFRS," Advances in accounting, Elsevier, vol. 30(2), pages 413-424.
    9. Niclas Hellman & Jordi Carenys & Soledad Moya Gutierrez, 2018. "Introducing More IFRS Principles of Disclosure – Will the Poor Disclosers Improve?," Accounting in Europe, Taylor & Francis Journals, vol. 15(2), pages 242-321, May.

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