Evaluation of Disclosures in Annual Report: A Study on the Listed Textile Companies in Bangladesh

Abstract

For a vibrant capital market it is necessary to have well informed decision making by the investors. The main source of such information is the annual report provided by a company. The study is an attempt to find whether the listed textile companies are making sufficient disclosures in their annual report. To measure the extent of disclosures, two un-weighted disclosure indices have been constructed. One of these is a 144 point index for the overall disclosures while the other is a 35 point index for the voluntary disclosures only. The required data have been collected from the secondary sources, i.e. the annual reports of the selected companies from year 2008 to 2011. The collected data have been analyzed by using statistical tools like mean, percentile and t-test. Computer aided statistical software SPSS 20 was used to calculate the results of the above mentioned tests. The study reveals that there are significant differences in disclosure practices among the sample companies. But the level of disclosures is not satisfactory as the average disclosure score is 45.3787 out of 144 which is only 31.51% of the total allocated score. Again, the average voluntary disclosure score is 5 out of 35 (14.29%) which is not satisfactory at all.