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Alim Al Ayub AHMED and Madan Mohan DEY
Department of Accounting and Information Systems, Rajshahi University
INTRODUCTION
The topic of accounting disclosure is broad enough to encompass almost the entire area of financial reporting. Disclosure means effective communication of meaningful information. Disclosure is concerned with providing information, which are useful in making business and economic decisions by the audience-of-interest and the parties who have right to receive it. Financial disclosure is the end output of the financial reporting process. The balance sheet, profit and loss account and cash flow statement along with the supporting notes are known as the basic financial disclosure. "The ultimate objective of disclosure is to communicate timely, reliable, and material information which is useful to the users of annual reports, in an intelligible form" (Agarwal, 1995).
The present study focuses on the measurement and analysis of the extent of disclosure made in the annual reports of the sample banks. Sixty annual reports of twelve sample banks were collected, all for the year 2002-2006. Unweighted disclosure index (UDI) was constructed which had a common base containing 144 items of information, which included under 9 captions. These 144 items included both mandatory and voluntary items of information. The annual reports of the sample banks were analyzed to determine the extent to which they contained the items of information included in the disclosure index. In constructing the UDI, dichotomous scoring for each of the 144 score items was used (disclosure =1, non-disclosure =0). Hence, the maximum possible score attainable by a bank was 144 with a minimum theoretical score of 0. Non-disclosure was scored zero as in the UDI and the values of UDI obtained as a result provide the basic data reported in this chapter. As noted earlier the 60 annual reports were collected from banks, which were listed on the DSE. No unlisted or public sector enterprises or manufacturing companies were included in the sample.
The primary objective of the study is to review of the selected banks financial statements regarding financial disclosure in corporate annual reports. The specific objective of the study is to measure the extent of disclosure of information made by the listed banking companies in Bangladesh. The specific objective adds to provide the present scenario of accounting...