Title: Chairman statement characteristics and firms performance: a study of Malaysian construction companies

Authors: Mohammad Talha, Abdullah Sallehhuddin Abdullah Salim

Addresses: Department of Accounting and MIS, King Fahd University of Petroleum and Minerals, KFUPM Box. 366, Dhahran-31261, Saudi Arabia. ' Faculty of Business and Law, Multimedia University, Jalan Ayer Keroh Lama, 75 450 Ayer Keroh, Melaka, Malaysia

Abstract: Chairman statement in the corporate annual report is classified as narrative accounting and until today it remains as voluntary disclosure. Without guidelines by the accounting standards setters and close monitoring by the regulators, it is hypothesised that company management may exaggerate the qualitative explanation in the chairman statement to impress various groups of stakeholders. In 2008, as sub prima crisis effecting global economic, and eventually reaches Malaysian shore, one of the badly suffered sectors in construction industry. Therefore, this study attempts to examine how these construction companies disclosure their chairman statement in order to reflect the negative impact towards their bottom line financial reporting. Specifically, the study investigates whether there is a significant different between profitable and not profitable construction companies as well as increased or decreased revenue construction companies associate with the characteristics of chairman statement in the corporate annual report. The independent sample t-test showed that there are no significant different, except profitable construction companies tend to provide more picture and graphic in the chairman statement section while reporting their bottom line performance.

Keywords: chairman statements; firm performance; construction industry; Malaysia; narrative accounting; voluntary accounting; corporate annual reports; voluntary disclosure; subprime crisis; financial crisis; negative impact; financial reporting; bottom line performance; profitability.

DOI: 10.1504/IJMFA.2011.039496

International Journal of Managerial and Financial Accounting, 2011 Vol.3 No.2, pp.188 - 199

Published online: 29 Nov 2014 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article