THE USE OF INTERNET FOR CORPORATE REPORTING: A
DISCUSSION OF THE ISSUES AND SURVEYS OF CURRENT
USAGE IN BANGLADESH
Md. Abid Hossain Khan
Senior Lecturer in Accounting
School of Business, Independent University, Bangladesh
Chittagong Campus, 12 Jamal Khan Road, Chittagong, Bangladesh
Email: firstname.lastname@example.org or email@example.com
Ahmed Taneem Muzaffar
Senior Lecturer in Economics
Department of Economics, East West University, Bangladesh
42, Mohakhali C/A, Dhaka 1212, Bangladesh
Email: firstname.lastname@example.org or email@example.com
Abu Sohel Mahmood
Lecturer in Marketing
School of Business, Independent University, Bangladesh
Chittagong Campus, 12 Jamal Khan Road, Chittagong, Bangladesh
The practice of corporate reporting on internet is relatively new in Bangladesh. The
topic, therefore, has not been studied much in this country. The expansion of securities
market in recent years has led to a higher tendency by the corporations to use internet for
the purpose of reporting. Considering this, the aim of this investigation is to determine
the current state of the use of internet for corporate reporting in Bangladesh. To perform
the research, an extensive survey was done on the web to find out the relevant
characteristics of the top listed companies ranked by Chittagong Stock Exchange. The
companies were selected from eight sectors. The survey reveals that 24 (40%) of the top
60 companies in Bangladesh possessing websites found active in promoting their
businesses in some way or another and cement, ceramics and food item producing
companies have not initiated the practice yet. In most cases these sites provide at least a
range of information with regard to company profile, product and service information and
other promotion material about the company and its activities. However, some companies
were found making the more use of the web than solely for advertising purposes.
Keywords: Corporate reporting, internet, information dissemination, Bangladesh.
Corporate reporting on internet (CRI) has expanded at a staggering pace over the past ten
years particularly in countries where securities markets are functioning. World Wide
Web is regarded as one of the most fast growing areas of internet throughout the world
providing commercial usage to users, facilitating them with access to reported documents
consisting of text, graphics, sound, and video (Lymer, 2003). This technology is used
extensively not only to disseminate information and perform various forms of business
communication for marketing purposes, but also to cater the needs of other areas such as
corporate reporting through firms’ quarterly and annual reports, periodic and annual
financial statements, press releases, speeches, performance reporting and other such
information. In addition to printed annual reports, corporations are showing a growing
tendency to use internet for corporate reporting allowing current and potential investors
conveniently gather financial information of companies.
The practice of corporate reporting on the internet is relatively new in Bangladesh. The
development of securities market in Bangladesh, however, has caused expansion of this
practice day by day. The paper makes an attempt to investigate the current state of the
usage of corporate reporting on internet in Bangladesh and provides an assessment of the
issues pertinent to CRI.
REVIEW OF RELATED LITERATURE
A great deal of work has been done on users, modes, and usefulness of corporate
reporting on the internet. In respect of benefits of corporate reporting on internet,
different studies have identified a number of reasons for usefulness of it. It enables both
users and producers to access corporate data by using an established network structure at
a low cost. ICAEW (1997) states that through this method an instant access to data at
convenient times for users is possible, as opposed to paper versions. Internet provides for
a broadcast medium for corporate reports (Parker, 1982). Green and Spaul (1997)
identifies that its presentation flexibility is less constrained compared to the traditional
paper versions. It also allows users to export data for constructing tailored information.
With regard to the demand for information in corporate reporting on business enterprises
comes from both outside and inside (Eskew and Jensen, 1996). The paper also illustrates
that the users of financial reporting outside the business usually wants summarized
information in standardized forms and reported at certain intervals. On the contrary, the
inside users look for customized information to help them taking specific decisions and
reported at frequent intervals and sometimes produced on the basis of request.
Research is also carried out on major technologies currently employed on internet for the
purpose of corporate reporting. In analyzing the modes used for corporate reporting on
internet, studies focus mainly on four different computer software such as Microsoft
Word and Microsoft Excel, Hypertext Markup Language (HTML), and Extensible
Business Reporting Language (XBRL). Westarp, Ordelheide, Stubenrath, Buxmann, and
Konig (1999) states that although hypertext structure of HTML derives great advantages,
it has deficiency concerning the exchange of structured data. The data is not at all
structured or indexed by specifying semantic elements so as to enabling the receiver’s
computer processing data automatically. In relation to Portable Report Format (PDF)
documents, the same study reveals that downloadable files are generally too large and
automated extraction of semantic meaning from the reports is impossible. Richards and
Smith (2004) states that XBRL is an XML (eXtensible Markup Languages)-based
framework that provides the financial community with a standard-based method to
prepare and publish financial statements in a variety of formats and automatically
exchange the information they contain. In line with this, Debreceny and Gray (2001)
reveal that XBRL solves two significant problems through efficient preparation of
financial statements in many forms and reliable extraction of specific detailed
information from the different forms of financial statements.
In the context of Bangladesh, some studies have been carried out in the areas of Financial
Reporting on Internet (FRI). Hossain (2004) identifies a correlation between a lack of
well developed securities market and poor or absence of corporate reporting on internet
by the Bangladeshi companies. Saifuddin and Khan (2005) report from a stakeholders
interview that variations observed in web based financial reporting pose doubts on
investors’ minds that some companies are violating existing financial reporting
regulations. The paper however, suggests that this should not discourage companies from
web based reporting, rather take measures in order to make web based financial reporting
more effective than paper based. Hye, Khan and Muzaffar (2005) reveal in their research
that although many of the issues related to online financial reporting have been addressed
by different standard setters worldwide, they have been overlooked in Bangladesh and
some of these issues need particular attention for continued development and further
guidance in this area.
As a future directive to the usage of internet for corporate reporting, Ettredge,
Richardson, and Scholz (2000) states that a further complexity may arise when the
corporations increasingly provide alternatives or supplements to the information using
dynamic interaction with the web sties rather than static presentation of information. In
this connection, Gray (2004) suggests to address the challenges resulting from web based
financial reporting, concerning company management, regulatory bodies, professional
accountants and different users of financial information.
In order to investigate the usage of corporate reporting on internet by Bangladeshi
companies, we explored and browsed the company websites on the world wide web. We
selected the top 10 or 5 “A” category companies falling in each of eight sectors listed on
the Chittagong Stock Exchange (CSE) as of 29th July, 2004 to be effective up to June
2005. CSE ranks top of its listed companies and publish the list every six months at an
irregular basis. The research findings are based on the search on company profile,
product information, shareholder information, press releases, performance reporting,
human resource and marketing. The paper also includes an attitudinal survey on
stakeholders aided by questionnaire and focus group discussion (FGD) in order to assess
the practice of corporate reporting on the net in Bangladesh.
DETAILS OF RESEARCH FINDINGS
Bangladesh is a developing country where the practice of corporate reporting on the net is
rather new dating back to about five years. However this practice by the corporations has
been expanding day by day, partly due to the fast development of the securities market in
Bangladesh. Among the companies using the net for corporate reporting purpose, the
pioneers are the companies under Beximco Group. Corporate reporting was initially
confined to mostly non financial information such as product and marketing related
issues while financial information has become an integral part of the contents of the
companies’ websites in recent years.
A search was performed on the World Wide Web using a combination of knowledge of
websites and search tools to discover the homepages (main web sites) of the top 10 or 5
companies falling in each of eight sectors listed on the Chittagong Stock Exchange (CSE)
out of A category only. “A” category includes most preferred listed companies out of all
the segregation of which is made by CSE considering the performance in terms of
dividend percentage, compliance of securities related rules and other capital market
parameters. The search was focused on company profile, product information,
shareholder information, press releases, performance reporting, human resource and
marketing. Links were followed in an attempt to discover the existence of such
information to as deep a level as was considered necessary in each site. The survey was
interested in individual company information not that of groups.
Table 1: Number of companies out of top 10, having websites in each sector
Number of Number of companies
selected top having websites out of
Sector companies top companies
Banking and insurance
Pharmaceuticals and chemicals 10 4
Cement and ceramics 5 0
Textiles and clothing 10 3
Leasing and finance 5 2
Food and Allied Products 5 0
ICT 5 5
Others 10 5
Source: Internet Survey
The survey reveals that 24 (40%) of the top 60 companies in Bangladesh possess
websites found active in promoting their businesses in some way or another and cement,
ceramics and food item producing companies have not initiated the practice yet. In most
cases these sites provide at least a range of information with regard to company profile,
product and service information and other promotion material about the company and its
activities, however, some companies were found making the more use of the web than
solely for advertising purposes. The online survey revealed the following in summary:
Table 2: Percentage of Internet reporting companies
Percentage of internet reporting companies
Bank & Pharma Textile Lease & ICT Others
Insurance & Chem & Cloth Fin
Company Profile 50 100 100 100 100 80
Product Information 40 100 100 100 100 60
Investors Relations 0 50 0 0 20 0
Press Release 20 50 0 100 40 40
Performance 20 50 0 0 0 20
Human Resource 20 50 0 50 0 20
Marketing 30 75 0 100 100 60
Source: Internet Survey
A discussion on exposures resulting from broad sector analysis has been done beneath.
Bank and Insurance
The most common data presented on the web by the banks were company profile and
information relating to the services they provide. Many of the banks reporting through
website highlighted information regarding the their branches situated in different places
and used marketing tools. Despite of their listing on both the stock exchanges of the
country, no bank constructed a site for investors’ relation in order to facilitate present and
Pharmaceuticals and Chemicals
Only four of top ten listed companies that fall in pharmaceuticals and chemicals sector
were found reporting on various corporate issues using World Wide Web. Among these
Beximco Pharmaceuticals Ltd. and ACI Ltd. have been found making the effective use of
the web to deliver reporting both financial and no-financial information in integrated
way. Considering web features in presentation and contents of information, other
companies’ websites can be classified as below average.
Textiles and Clothing
In terms of web based corporate reporting Beximco group of companies is the pioneer in
this sector. There are seven textile and clothing companies in Beximco group all of which
have a single page for each in the website of the group company. Only two companies of
Beximco group and Square Textile Ltd. categorized as A class by CSE under textile and
clothing sector. In the case of all these three companies sufficient information has been
found regarding company profile and product information whereas information for
investors decision; for example financial and non-financial performance reporting, press
release, human resource were found completely missing. Moreover, single web page for
one company resulted to the data less than the minimum requirement, that is, deeper than
one level down.
Leasing and Finance
Out of only five listed A class companies two companies named IDLC and Midas
Financing Limited maintain corporate websites. Company profile, rigorous advertisement
of the products and services and release of recent events have been found common in
both the companies. Besides IDLC reports on financial performance through five years
trend data, corporate governance issues and career opportunities in the company.
Information Communication Technology (ICT)
ICT sector includes those companies, which provides Internet service providing
companies. These companies also doing business on software solutions, e-business, web
design, site design etc. All the companies make some services available to the members
or users, for instance web mail account operation, usage record check, some essential
software download, important web links and refilling prepaid account. Company profile
was found common in all these websites. Another common characteristic is all the
companies used different marketing tools to such extant with a view to promoting their
businesses that, it might make an impression that these companies developed and
maintain websites for selling products and services only. However some were observed
making press releases with respect to the recent events on regular basis and maintaining
separate investors relations page enclosing trend data in it, one company took the
opportunity to make financial performance data available via web.
This category of listed companies comprises leather, property development, paper
products, fuel and power. In corporate websites most of the Internet reporting companies
of this sector assimilate information concerning corporate profile and products whilst a
very few has been found emphasizing on performance reporting.
Sites of particular interest
• Beximco Pharmaceuticals Ltd. – It is a well-presented site maintaining corporate
image through meeting all the basic requirements. The site contains full
presentation of latest financial statements, latest five years statistics of key data
and downloadable latest annual report for the benefit of stakeholders.
• ACI (Advance Chemical Industries Ltd.) – A well designed site with thoughtful
use of the web to present information highlighting key performance and for
• IDLC (Industrial Development Leasing Company Ltd.) – Effective use of the web
in support of selling activities of products and services has been noticed in this
site. Financial performance reporting with recent five years trend data and
corporate governance reporting presented with great care. Most unique feature is
the frequent half yearly performance reporting of the enterprise.
• BOL (Bangladesh Online Ltd.) – This site embraces rigorous advertisement of the
products and online purchasing facility for customers. Separate pages insertion for
investor relations containing downloadable annual reports made data easily
accessible and useable. In addition some important links and Internet related
facilities made available.
• IBBL (Islami Bank Bangladesh Ltd.) – A complete website with widest range of
information since it has, in it, links to separate pages which contain performance
reporting, human resource, press releases, success stories, information regarding
branches and downloadable annual reports of latest two years. Information
relating to products and services has not been neglected on the site.
Effective Use of the Web
There are some areas in which the Internet and in particular the web may offer
possibilities to enhance the provision of corporate reporters to users. This section reviews
the use of the web by surveyed companies. In particular, this section discusses:
• The use of graphics
• Use of hyper-linked data
• Ability for downloading of data
• Press release provision
• Trend data and analysis
• Other jurisdiction data
• Dynamic data provision
• Non-financial measures of performance
The ability to enhance the presentation of performance information with graphics is a
feature made possible with the use of the web. The most common use of graphics found
in reporting web sites was to repeat the diagrams that have appeared in the conventionally
published version of the financial performance information, for example the sites of
Advance Chemicals Industries Ltd. and Beximco Pharmaceuticals Ltd. Good examples of
the use of graphics however, can be seen in the sites of Beximco Pharmaceuticals Ltd.
and IDLC where they are used effectively to support the explanation of trend data and in
the Beximco Pharma web site they are used to support the comparative analysis.
The most common use of the hyper-linking feature of the web was to allow for inter-
linking of pages of information to support user controlled access to the set of documents
provided. The most straight forward example of this has been found in sites linking notes
to the account information in Beximco Pharma only. Almost all other sites used frames or
image maps as an additional or separate navigation tool to conventional links for various
purposes other than accounts. Poor understanding of this feature, however, has also been
visible – for example Square Pharmaceuticals, Beximco Textiles, National Bank where
full years results appeared in document with no linkages.
Downloading of Data
The ability for the users to download data for their own analysis was not supported in
even a case. No financial statement and supporting information was easily accessible or
easily downloadable in any convenient format, for example XBRL, Lotus or Excel
spreadsheet. More common was the provision of accounts in Adobe Acrobat format for
downloading and local viewing. This facility is being offered by IDLC, Beximco Pharma,
Square Pharma and Bangladesh Online. IDLC makes their un-audited 1st Half Year
results for 2005 available in Acrobat format – the only firm to do this.
Many companies have been found making the press releases in various manners. Some
companies e.g. Bangladesh Online, IDLC, Midas Financing, IFIC Bank maintain separate
page in their web site for recent press releases. On the other hand it has been noticed that
other enterprises have not felt the importance and made the press releases of recent
important events in scattered manner.
It has been argued that the advantages of presentation by the web is the ability to provide
more data to the user in explanation of company performance than is otherwise possible
to do. A significant number of companies supplying financial data over the web made use
of this possibility to support the performance message they want to promote. In some
cases five years or longer reviews were given in various forms (data and graphics) e.g.
IDLC, Square Pharma and Beximco Pharma.
Other Jurisdiction Data
The ability of the web to reach beyond the border of a country may suggest that the
companies would think about the international audience for their corporate reports. This
was, however, not the scenario in all the Bangladeshi companies who opted just to
produce the accounting information fulfilling the local requirements. No company has
been found who linked in GAAP data in local format.
Dynamic Data Provision
The web offers the ability for rapid/instant updating facilities to enhance the provision of
performance data. This feature is yet to be adopted by many Bangladeshi companies on
their web sites. The notable exceptions to this are Bangladesh On Line and IDLC. In the
case of the former company the site is updated regularly with a link to Dhaka Stock
Exchange Site where 15 minutes delayed stock prices for the company can be obtained
and in latter company half yearly data are added on regular basis.
Non-financial Performance Measures
In addition to the financial information, non-financial data matters much in various
analysis of performance. In spite of the importance of non-financial performance data, no
corporate reporting web site took the opportunity to present performance measures other
than financial ones.
Findings from Stakeholders Interview
The survey on the stakeholders finds that all the respondents who are users of corporate
information, visualize internet as one of the flourishing means of corporate reporting.
Amongst the stakeholders having internet access considering both permanent and casual
types, around sixty percent browses the company websites regularly and forty percent
seldom visits the sites. Table 3 shows the opinions expressed by the respondents. It
reveals that aggregate score of the opinions of the sample respondents regarding usage of
corporate reporting on internet in Bangladesh is 1.97 and it ranges from 1.76 to 2.19.
This signifies the importance of the variables considered.
Table 3: T-test result from survey on stakeholders
Variables Considered Average Remarks
Scores (T-test Result)
Graphics is important for enabling the companies to 2.19 Insignificant
produce the published version of information effectively
on web sites
Hyper-linking is essential for interlinking of information 2.15 Insignificant
to support the users
Downloadable data is needed in such format that is ready 2.10 Insignificant
for own analysis of users
Press releases on company web sites make the users 1.93 Insignificant
Financial trend data helps to substantiate corporate 1.90 Insignificant
performance in different aspects
Regular updating of data contained in the site should be a 1.76 Insignificant
part of business of the companies
In addition to financial information non-financial 1.82 Insignificant
performance data ought to be a part of corporate web sites
Total 1.97 Insignificant
Source: Field Survey
CONCLUSION AND RECOMMENDATIONS
The web offers a number of possible features for corporate reporting. Since it has not
been long enough, the corporate reporting practices on Internet by Bangladeshi
companies have not been evolved to the level of standard yet. It requires adequate
preparation, proper regulations, control and effective structure for its better functioning.
In the context of corporate reporting practices on the Internet in Bangladesh and results
derived from the survey, the paper proposes the following recommendations.
• The standard setters, for example Institute of Chartered Accountants of
Bangladesh (ICAB) and regulatory body for listed companies, Securities and
Exchange Commission (SEC) are to extend the content of standards to regulate
the content of digital financial reporting.
• Necessary Internet specific rules with respect to interlinking of information,
performance data, press releases on recent events and price sensitive information
and updating web site data after a certain interval are required to be developed.
• The auditor’s report should be hyper linked to that part of the web site which
consists of the information reviewed.
• Further research should be carried out in order to prevent manipulation of digital
data and guarantee the authenticity and reliability of the corporate information
distributed via Internet to the users’ satisfaction.
• The domain name of individual companies must be highly restricted so that it
cannot be used by others.
• Instead of other formats of corporate reporting on Internet, consistent use of
XBRL should be encouraged so that extraction of specific information by data
identification and analysis of the same will be easier.
• Compliance of GAAP (Generally Accepted Accounting Principles) and IASs
(International Accounting Standards) must be ensured in the web based financial
reporting practices gradually for achieving the borderless and wide acceptance.
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