Corporate Web Site Reports: Some Evidence on Relevance and Usefulness

摘要

We investigate whether corporations are following the "best disclosure practices " when presenting business reports on their Web sites. As a benchmark, we use the recommendations made by the Jenkins Committee (1994) to improve corporate reporting practices, to evaluate reports presented on corporate Web sites for their value, relevance, and quality of information. We compute a disclosure score using 26 items recommended by the Jenkins Committee and Meek et al. (Meek, Roberts, & Gray, 1995) as indicators of best reporting practices. Our findings reveal that most corporations do not follow "best disclosure practices " when reporting information on their Web sites. Only about half of the 26 disclosure items recommended by the Jenkins Committee are reported, and less than 50% of the sample firms in our study make such disclosure. Some of the items that the Jenkins Committee recommends as essential for improving quality and relevance of reporting such as forward-looking information (e.g., plans, opportunities and risks, forecasts, critical success factors), nonfinancial items (e.g., changes in operating performance, research and development activities), or off-balance sheet financing, are least often reported. The findings suggest that corporations must improve their Web site disclosures for investors to find them valuable, relevant, and useful.