An assessment of firm characteristics on financial disclosure: insurance industry in Bangladesh
by Nikhil Chandra Shil; Sarahat Salma Chowdhury
International Journal of Managerial and Financial Accounting (IJMFA), Vol. 4, No. 3, 2012

Abstract: Insurance industry has got some certain characteristics that are uncommon in other types of industries. Thus, the financial disclosure pattern is also different for insurance companies. Again, accounting standards, rules, laws and other prescriptions are very much divergent in this area. Regulators are slow to enact sufficient prescriptions in time and the reason of such reluctance is not known. Under such circumstances, disclosure made by insurance companies is characterised by high level of divergence, incomplete, incomparable, inconsistent information in financial statements. This paper addresses the issue of financial disclosures made by insurance companies in Bangladesh through the development of a disclosure index on the basis on current disclosure practises. Some firm specific characteristics explaining size and profitability are identified and the possible impact of those on the level of disclosure is tested. Size and profitability sometimes improve the level of financial disclosure and thus the paper targets to look into it. The research is based on secondary sources only. A disclosure index is proposed based on the published financial statements of insurance companies and then size and profitability measures were regressed with disclosure index value. The analysis results a worrying picture with the conclusion that neither size nor profitability measures have any impact on financial disclosure.

Online publication date: Sat, 16-Aug-2014

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