An Analysis Of Companies Information Quantity Accounting Essay

Category: Accounting

Full international contact details: Department of Financial Economics and Accounting II (Accounting), Faculty of Economics and Business Sciences, Complutense University of Madrid, Campus de Somosaguas, Pozuelo de Alarcón, zip code 28223, Edificio 1, Phone number 0034-913942344, Fax 0034-913942381, Madrid, España.

Brief professional biography: Bachelor´s degree, Master´s degree and Doctor´s degree in Economics and Business Sciences, majoring in "Accounting and Auditing", at Complutense University of Madrid, Master´s degree extraordinary award. Full-time Professor at the Department of Financial Economics and Accounting II, coordinator of several Doctorate programs and member of different commissions at the Faculty of Economics and Business Sciences at Complutense University of Madrid. She has been an academic advisor in different centers, treasurer of Economics methodology at the Ibero-American Society, coordinator of different subjects in careers such as Business Administration, Actuarial and Computer Science Engineering, as well as, member of scientific committees in international congresses. The research lines are related to international business accounting, accounting methodology and usefulness of financial information and this topic has been analyzed in several books, articles, congresses, seminars, research projects, educative innovation projects as well as the direction of different research works.

Full name: Amparo Cuadrado Ebrero

Affiliation: Department of Financial Economics and Accounting II (Accounting), Faculty of Economics and Business Sciences, Complutense University of Madrid in Spain.

E-mail address: [email protected]

Full international contact details: Department of Financial Economics and Accounting II (Accounting), Faculty of Economics and Business Sciences, Complutense University of Madrid, Campus de Somosaguas, Pozuelo de Alarcón, Postal code 28223, Edificio 1, phone number 0034-913942344, Fax 0034-913942381,Madrid, España.

Brief professional biography: Master´s degree and Doctor´s degree in Economics and Business Sciences majoring in "Accounting" at Complutense University of Madrid. University Professor on financial economics and accounting at Complutense University of Madrid. She has been in charge of important positions and advisor of different university and private sectors as the Director of centro universitario Cardenal Cisneros, Head of the Department of Financial Economics and Accounting II at Complutense University of Madrid. She organizes and leads several courses, research seminars, graduate programs as well as research projects. She has published more than twelve books and several articles related to the following research lines: accounting methodology, accounting information systems, analysis and auditing. She has also been tutor in different dissertation works in these areas.

Full name: Rolando Eslava Zapata

Affiliation: Department of Accounting and Management Sciences, Núcleo Universitario "Pedro Rincón Gutiérrez", University of The Andes Táchira, San Cristobal in Venezuela.

E-mail address: [email protected]

Full international contact details: Department of Accounting and Management Sciences, Núcleo Universitario "Pedro Rincón Gutiérrez", University of The Andes Táchira, Avenida Universidad, Barrio Santa Cecilia, Sector Paramillo, San Cristóbal, zip code 5001, Edificio 1, Phone number 0058-2763405091, San Cristóbal, Venezuela.

Brief professional biography: A PhD candidate at Complutense University of Madrid, Degree in Management, Degree in Public Accounting and Master´s Degree in Accounting Sciences at University of The Andes in Venezuela. Aggregate Professor at the Department of Management and Accounting Sciences at University of the Andes Táchira in Venezuela. The research lines are related to international financial accounting, accounting methodology and usefulness of financial information shown in different research works.

Abstract

Purpose - This study aims to analyze companies´ information quantity through financial statements, audit reports and Websites, in order to evaluate if these factors are enough to satisfy accounting users´ needs.

Design/methodology/approach - This study was based on Madrid Stock Exchange and Eurostoxx50 companies´ audit reports, financial statements and Websites during the period 2004-2007. In addition, statistical techniques were applied to contrast the established hypotheses.

Findings - It has been checked that financial statements, audit reports and Websites show enough information about companies to satisfy users' needs.

Practical implications - It is suggested to regulator entities in the accounting area to enlarge requirements to disclose mandatory information, to obtain better transparency of shown data; besides, companies should take more initiatives in voluntary information disclosure.

Originality/value - This study provides empiric evidences about the quantity and access to companies´ information; in addition, a classification of disclosed data in Websites results is proposed, therefore, it can be useful in further researches.

Keywords Information quantity, Audit reports, Websites, Factorial analysis, Kruskal-wallis, accounting users

Paper type Research paper

Introduction

The quantity of information disclosed by companies is an essential factor that influences accounting users' decision-making complex process. With the purpose that users make rational decisions, it is necessary that companies show their financial statements, in agreement with the respective legal demands, in order to facilitate accurate data of the entities operations.

To this effect, the audit report is one of the means that gathers several companies' data; within it, the auditor's opinion is presented in agreement with the execution of norms to publish companies' financial statements settled by the mercantile legislation. The quantity of information contained in the audit reports can affect, in some cases, the quantity of accounting users´ perception about the development of company operations, once the auditor's opinion is known (Robinson, 2008) and companies carry out the audit (Jun et al., 2009). Meanwhile in other cases, information quantity can determine the decisions to invest in the company (Ghicas et al., 2008).

It is necessary to emphasize that companies' Websites are information means available to users. The development achieved by capital markets has made accounting users to ask for more information to fulfill their needs. As a result, companies have decided to enlarge the disclosure of their operations in Websites, where mandatory and voluntary information, as well as, financial and non financial information is shown. Therefore, it is observed that the evolution of accounting disclosure on Internet has been increasing all over the world in the last decade, due to companies' presence on Internet as well as information provided by them (Seetharaman et al., 2005).

The problem for accounting information users arises when companies´ information quantity is not enough and there are obstacles when accessing the information. Therefore, this paper aims to analyze companies' information quantity through financial statements, audit reports and Websites, in order to evaluate if these factors are enough to fulfill accounting users´ needs.

For that purpose, this research covered at first, an analysis of Madrid Stock Exchange and Eurostoxx50 companies' financial statements and audit reports, during the period 2004-2007. In this study, the empiric contrast of some variables, selected to determine the factors that can influence disclosed data, is used. Subsequently, companies´ Websites are analyzed and considered in order to study some attributes related to the quantity of information disclosed by this means. Therefore, a descriptive analysis as well as a factor analysis is carried out to perform the test.

Background and empirical predictions

Mandatory information disclosure

The elaboration and presentation of financial statements is regulated in Spain, as in other European Union countries, by a group of norms typified in the Trade Codes, Corporation Laws or in the General Accounting Principles, among others. In addition, it is necessary to emphasize the importance that the accounting harmonization process has had, unifying approaches to elaborate financial statements, so that; companies´ financial statements reflect their economic essence and a true image of their financial situation. Therefore, the financial statements will be integrated by the income statement, balance sheet, statement of changes in equity, statement of cash flows and notes to the financial statements.

In relation to Companies´ Websites regulations, it should be mentioned that the legal information disclosure regime on Internet is foreseen in emanated diverse pronouncements of Stock Exchange and other Organisms; so that, companies fulfill the requirements of accounting information users. It is also necessary to highlight the role that studies developed by the main accounting organisms have carried out on information published on Internet. Their results have had an important role when regulating internationally disclosed information on Internet. This has promoted the development of juridical ramifications to ensure information disclosure by this means in European Union countries.

To that effect, some of the developed studies were carried out by the American Institute of Certified Public Accountants (AICPA), through Jenkins Committee (1994), determining a series of recommendations related to a new model of useful information to investors. In another study made by FASB (2000), it is recognized that information quantity on Internet has been enlarged with low costs and it is available to a larger number of investors. At the same time, FASB (2001) revealed to companies some guides related to the way of diffusing information to investors. Additionally, Lymer et al. (1999) determined some guidelines that should be followed to publish information on Internet to provide more transparent and available data for analyses. In the same order of ideas, other contributions emphasizing the advantages of Internet use for information popularization are found (ICAEW, 1998 and CICA, 1999).

Companies´ voluntary information disclosure

The means used to disclose information have improved to such an extent that they allow great quantity of data, financial and non financial, to flow reaching a wide range of users. Among these means, Companies´ Websites are distinguished because their characteristics offer a great quantity of data to a multiplicity of groups, with diverse interests.

Companies' information quantity has been analyzed in several research studies that aimed to determine companies' characteristic factors as well as disclosed information. Cerf (1961) developed one of the first empiric studies on voluntary information, determining a positive relationship between this and the company´s size. This study was followed in other documents (Singhvi and Desai, 1971; Chandra, 1974; Buzby, 1974; Firth, 1979; among others). In addition, the voluntary information disclosure test has been carried out by means of constructing disclosure information indexes. Consequently, pondered and non pondered indexes have been developed (Street and Bryant, 2000).

Now then, in the empiric literature, the information disclosure levels have been associated to some variables, such as: a) company´s size (Agca and Ã-nder, 2007); b) time of the company (Cazavan-Jeny and Jeanjean, 2007); c) audit firm´s size (Stephen, 2005); d) auditor's opinion (Stephen, 1998); e) Stock Exchange (Dedman et al., 2008); f) international affiliation (Webb et al., 2008); g) diversification of abroad operations (Webb et al., 2008); h) countries cultural aspects where companies operate (Kumar et al., 2008); i) relationships with employees (Webb et al., 2008); and j) corporative government (Hoitash et al., 2009).

In this section, voluntary information disclosure on Internet is also discussed. It should be said that information disclosure and delivery on Internet have had an effect on all companies´ economic and financial activities, in general (Bollen et al., 2008). Therefore, Marston (2003) examining 99 Japanese companies in 1998, found that 78,78% companies´ Websites were written in English and 68,68% companies presented financial information on Internet. Later in 2001, Marston (2003) carried out the tests again, and he checked that most companies presented their Websites in English attaching complete financial reports. Mohamed et al. (2009) with a sample of 142 Oman companies, observed that only 84 had Websites; and from this group, only 31 companies were completely adapted to the popularization of financial information on Internet. On the other hand, Pendley and Rai (2009) confirmed that around 59% of the analyzed companies provided financial information on Internet through "outsourcing" services. This shows data reliability, financial regulations and new technologies. Meanwhile, other research studies have emphasized the use of Internet as a means to connect investors among them (Hamid, 2005).

Hypothesis Formulation

Hypothesis to evaluate companies´ information quantity through financial statements and audit reports

The first aspect that will be considered, regarding companies' information quantity, is related to financial statements elaboration and presentation. To this effect, companies are required to prepare their accounting reports, according to the mercantile laws, in order to publish the results of their economic-financial operations. Furthermore, these reports must be examined by auditors, aiming that they give an opinion about them (Farrugia and Baldacchino, 2005).

At the same time, it is important to emphasize that the adoption of International Financial Reporting Standards has played a fundamental role in terms of elaborating other required reports to companies listing in the Stock Exchange. It should be said that depending on how companies present their financial statements, accounting users will be able to have some valuable information sources to judge their operations.

Therefore, given these circumstances, with the purpose of evaluating companies' information quantity through their economic-financial reports, as well as, checking their relationship to the productive sectors, the following hypothesis is formulated:

H1: the quantity of economic-financial reports is related to the productive sector that the company belongs to.

The audit report is another aspect considered to evaluate companies' information quantity. It contains the auditor's opinion and, it is a means of communication among auditors and groups of users. This report presents additional data of companies, such as the identification of the audited financial reports and the work carried out by the auditor on financial statements, which is supposed to be an information source to consult by groups of users.

In the same order of ideas, some research studies have established the relationship between the audit reports with investors' decisions making and companies bankruptcy. Regarding decision-making, Bessell et al. (2003) examined the information content of modified-qualified audit reports, determining that the modifications do not change users´ risk perceptions. This idea is considered in other research studies (Archambeault et al., 2008). In addition, in relation to companies' bankruptcy, Geiger and K. Raghunandan (2001) proved that reports did not reflect enough data about the probability for a company to bankrupt.

Nowadays, it can be observed that European Union audited statements offer a homogeneous performance framework to facilitate information transparency (Farrugia and Baldacchino, 2005); so that, the audit reports clearly express that accounting states provide or not, a true image according to the accounting principles. Therefore, considering the presented empiric evidences, the next hypothesis is explained as follows:

H2: the audit report information quantity is related to the audit firm.

Hypothesis to evaluate the access to companies´ information quantity through the Stock Exchange National Commission

The time that passes in the delivery of companies´ audit reports to the Stock Exchange National Commission will be discussed now. The discussion focuses on the importance that this factor has for accounting users to have audit reports and financial statements audited by this organism; so that, their access to companies´ information quantity is not reduced. In this case, the importance of timely information is highlighted, so that, it is available at the right time and at the moment it is required by the different agents.

To support this discussion, several empiric studies have analyzed the causes that produce audit reports elaboration delays (Imam et al., 2001). In this sense, Leventis and Caramanis (2005) found that company´s size, work teams and type of auditor are variables related to audit delays. Furthermore, some studies have emphasized that audit delays are significantly higher when companies, belonging to the industrial sector, wait for qualified opinions, have deficient inner controls and have great quantity of unresolved work after the fiscal year has concluded (Ettredge et al., 2006). This reasoning leads to enunciate the following hypothesis:

H3: the time of the audit report delivery to the National Securities Market Commission varies according to the productive sector that the company belongs to.

Research design and Sample selection

Research design

In a previous phase, financial statements have been separated into two groups: individual financial statements (IFS) and consolidated financial statements (CFS). This was done by identifying the applied accounting norm that could be related to the Local Generally Accepted Accounting Principles or International Financial Reporting Standards. Additionally, a revision of the audit reports was carried out, obtaining some formal aspects from them.

Furthermore, the companies´ Websites have been located in order to identify some attributes related to financial and non financial information. The study was carried out from July to September 2009; in addition, attributes were selected considering Jenkins Committee´s study (1994).

The observation technique was the selected methodology to analyze the Websites. After carrying out a systematic and planned observation of previously established attributes, they were registered in an observation form, together with the obtained qualifications based on their detail level, to facilitate later data statistical relationships. The "appreciation scale" has been used to value attributes in order to quantitatively facilitate the punctuation of observations. In the same order of ideas, Anguera (1997: 67) mentions that "for simple scale we understand that one, in which successive steps represent the diverse grades of the studied dimension". Therefore, the values that the different variables will take, were determined establishing a punctuation ranging from 0 to 5, depending on the data detail level disclosed in Websites, pondering them as follows: 0 = it is not included, 1 = not detailed, 2 = not very detailed, 3 = detailed, 4 = very detailed and 5 = completely detailed.

Methods

Pearson´s Chi-square test (χ2) and the kruskal-wallis test will be applied in the empiric development to contrast the established hypotheses. Pearson´s statistical χ2 is a non parametric test that allows measuring if two variables are related or, on the contrary, they are independent. In this study, the hypotheses are verified considering a 5% significance level. On the other hand, kruskal-wallis test is a non parametric test used to compare population average when data are not usually distributed.

Regarding the Websites, a descriptive analysis of attributes, followed by a factorial analysis, has been applied. The factorial analysis is a technique that allows the reduction of data and the explanation of variables behavior in smaller numbers and they are called factors.

Sample

The population subject of analysis is integrated by companies belonging to Madrid Stock Exchange and Eurostoxx50. To determine the sample, all the productive sectors were selected excluding the financial and real estate sector, because this sector requires a special treatment for analyzing information and it is subjected to a specific accounting legislation. It is necessary to highlight that Eurostoxx50 companies were analyzed without locating them in any productive sector, they were treated as an additional sector in order to have a general idea of their behavior. Therefore, the sample is finally composed of 143 companies: 111 from Madrid Stock Exchange and 32 from Eurostoxx50.

Regarding the financial statements and audit reports, both groups are from the period 2004-2007. In Table 1, the distribution of both report groups is shown; locating them by productive sectors and according to the market group they belong to. It can be observed that the sectors with the highest frequencies come from "basic materials, industry and construction", "consumption goods" and "Eurostoxx50".

Table 1. Financial statements and audit reports by productive sectors and market group

Productive Sector

Market Group

Madrid Stock Exchange: Continuous Market

Madrid Stock Exchange: Parqué

Eurostoxx50

Madrid Stock Exchange Market and Eurostoxx50

Total

f

%

f

%

f

%

f

%

f

%

Oil and energy

40

76,9%

0

,0%

0

,0%

12

23,1%

52

100,0%

Basic materials, Industry and construction

132

91,7%

8

5,6%

0

,0%

4

2,8%

144

100,0%

Consumption goods

128

91,4%

8

5,7%

0

,0%

4

2,9%

140

100,0%

Consumption services

76

90,5%

8

9,5%

0

,0%

0

,0%

84

100,0%

Technology and communications

20

83,3%

0

,0%

0

,0%

4

16,7%

24

100,0%

Eurostoxx50

0

,0%

0

,0%

128

100,0%

0

,0%

128

100,0%

Total

396

69,2%

24

4,2%

128

22,4%

24

4,2%

572

100,0%

In relation to Companies´ Websites, the population includes 143 Madrid Stock Exchange and Eurostoxx50 companies´ Websites (Table 2). It is considered that the sample would be composed of all the productive sectors, excluding the financial and real estate sector, due to the reasons explained in the audit reports case. After locating the respective Website links, only 142 Websites were analyzed because one of Madrid Stock Exchange companies Websites was under maintenance.

Table 2. Websites by productive sector

Productive sector

Website

Yes

No

Total

f

%

f

%

f

%

Oil and energy

13

100,0%

0

,0%

13

100,0%

Basic Materials Industry and construction

35

97,2%

1

2,8%

36

100,0%

Consumption goods

35

100,0%

0

,0%

35

100,0%

Consumption services

21

100,0%

0

,0%

21

100,0%

Technolog and comunications

6

100,0%

0

,0%

6

100,0%

Eurostoxx50

32

100,0%

0

,0%

32

100,0%

Total

142

100,0%

1

100,0%

143

100,0%

Result analysis of companies' information quantity using financial statements and audit reports

Quantity of economic-financial reports and productive sectors

H1 is considered in order to understand the relation between the quantity of economic-financial reports and the productive sectors. Table 3 illustrates that the more frequent reports in the productive sectors correspond to the Balance sheet, Income statement, notes to the financial statements and management report.

It can be noticed that the financial statements from the year 2004 were prepared with the local Generally Accepted Accounting Principles from each country, from 2005 on; the reports had to be prepared according to IFRS. Consequently, it can be seen that the change in the financial standards with the adoption of International Financial Reporting Standards has brought benefits in relation to the quantity of information disclosed by companies to satisfy users´ needs. This can be proved by the positive tendency of companies to elaborate financial statements, in all the analyzed productive sectors.

It can be noticed that the change in accounting regulations, with the adoption of International Financial Reporting Standards, has brought benefits regarding information quantity revealed by companies, so that, the financial elaborated reports represent a way to satisfy users' needs.

After carrying out the Chi-square contrast, with a 5% significance level, a χ2= 154,795 and p<0,05 was obtained. This result leads to confirm the dependence between variables, and therefore, to state that information quantity emitted by companies has a relationship with the productive sectors that companies belong to.

This result is highly related to the changes in the financial standards to strengthen information transparency.This could be particularly observed from the year 2005 on with the preparation of two new legal reports such as the statement of cash flows and the statement of changes in equity. Additionally, because of the information pressures that large companies had to go through with the preparation of new reports.

Table 3 Quantity of economic-financial reports by productive sector

Quantity of economic-financial reports

Productive sector

Oil and energy

Basic materials Industry and construction

Consumption goods

Consumption services

Technology and communications

Eurostoxx50

f

%

f

%

f

%

f

%

f

%

f

%

Balance sheet

52

100,0%

144

100,0%

140

100,0%

84

100,0%

24

100,0%

125

100,0%

Income statement

52

100,0%

144

100,0%

140

100,0%

84

100,0%

24

100,0%

125

100,0%

Statement of cash flows

36

69,2%

101

70,1%

94

67,1%

56

66,7%

19

79,2%

123

98,4%

statement of changes in equity

17

32,7%

90

62,5%

84

60,0%

48

57,1%

16

66,7%

113

90,4%

Notes to the financial statements

52

100,0%

143

99,3%

140

100,0%

84

100,0%

24

100,0%

125

100,0%

Management report

52

100,0%

140

97,2%

136

97,1%

84

100,0%

24

100,0%

125

100,0%

Other reports

19

36,5%

13

9,0%

12

8,6%

8

9,5%

3

12,5%

24

19,2%

Total

52

100,0%

144

100,0%

140

100,0%

84

100,0%

24

100,0%

125

100,0%

Information quantity from the audit report and audit firm

In the following section the association between the quantity of information of the audit report and auditing firms has been analyzed. To do so, some formal aspects of the audit report were identified.

Taking into account the results shown in table 4, data related to the "identification of financial reports, CFS" and the "auditor´s responsibility, CFS" are present in 535 analyzed reports. Although, the presence of the variables in the studied reports is favorable in all the firms, "PriceWaterhouseCoopers" and "Deloitte & Touch" have the highest frequencies.

From the Chi-square analysis for H2 derives an χ2 = 790,869 and a p=0,000, value that leads to demonstrate the dependence between the variables and, consequently it exhibits the association between them. The existing differences in the revelation of variables among the analyzed audit firms can be related to the existing legal system of the country where the report was prepared, so it can be assumed that there are different demanding levels.

Table 4. Information quantity from the auditor's report by audit firm

Auditor´s report data

Audit firm

Ernest & Young

PriceWaterhouseCoopers

Deloitte & Touch

KPMG

Other audit firm

audit realized by several audit firms

Total

f

%

f

%

f

%

f

%

f

%

f

%

f

%

Includes the reports addressee: IFS

58

12,1%

103

21,4%

173

36,0%

66

13,7%

43

8,9%

38

7,9%

481

100,0%

Includes the report addressee: CFS

54

11,4%

94

19,9%

170

36,0%

65

13,8%

38

8,1%

51

10,8%

472

100,0%

Identification of financial reports: IFS

58

12,3%

116

24,7%

176

37,4%

68

14,5%

43

9,1%

9

1,9%

470

100,0%

Identification of financial reports: CFS

53

11,3%

117

24,9%

177

37,7%

72

15,4%

38

8,1%

12

2,6%

469

100,0%

There is a reference about the performed study: IFS

59

11,3%

119

22,8%

178

34,0%

71

13,6%

43

8,2%

53

10,1%

523

100,0%

There is a reference about the performed study: CFS

54

10,1%

118

22,1%

179

33,5%

74

13,8%

38

7,1%

72

13,5%

535

100,0%

There is a reference about the auditor´s responsibilities: IFS

59

11,3%

119

22,8%

178

34,0%

71

13,6%

43

8,2%

53

10,1%

523

100,0%

There is a reference about the auditor´s responsibility: CFS

54

10,1%

118

22,1%

179

33,5%

74

13,8%

38

7,1%

72

13,5%

535

100,0%

Result analysis of the access to companies´ information quantity through the National Securities Market Commission

Regarding to the evaluation of the audit report´s delivery of Spanish companies to the Spanish National Securities Market Commission, a recording of reports elaboration dates and delivery dates to the National Securities Market Commission has been carried out.

The objective of this analysis is to measure the time reports take to be available to accounting users through National Securities Market Commission; as well as, checking if reports delivery punctuality are possible factors that determine companies' information quantity. It is important to say that companies' financial statements are attached to the auditor's report. Therefore, when companies' information quantity is highlighted, the above mention variables are taken into account.

When the descriptive analysis about day differences between the identified variables is made, the presence of high asymmetry and kurtosis values is evident. This allows concluding that data distributions are far from normality. That is why; non-parametric techniques have to be used in the analysis. Therefore, the kruskal-wallis test was used to contrast H3, being H3 related to population mean differences of delayed days in reports delivery.

According to results shown in Table 5, at 5% significance level, the null hypothesis of mean equality is accepted, and it is checked that there are no statistically significant differences in the variable: days for reports delivery to National Securities Market Commission, as for IFS (p=0,13) and for CFS (p=0 ,19). That is to say, the differences in reports delivery days do not differ among the different groups.

In the same order of ideas, the results show that reports are available for accounting users in a minimum average period of 135,63 days (Oil and Energy Sector, CFS) and a maximum of 195,34 (Technology and Communications Sector, IFS), this implies that it is necessary to wait around four months to have access to audit reports through National Securities Market Commission.

As a result, considering the obtained evidences, it can be deduced that users must look for alternative ways to access audit reports, with the risk of not having them on time. Besides, the reports delivery delays can determine information quantity availability. This result certainly allows to state that there are problems in timely information caused by the presented delays, so it can be assumed that the different agents will not have enough data that allow them to know the economic and financial situation of the companies at the right time.

Table 5. Kruskal-wallis test for population average differences between report dates and their delivery to Spanish National Securities Market Commission

Day difference

Productive Sector

N

Average rank

Square Chi

Sig. asintot.

Day difference in IFS

Oil and energy

43

139,86

7,153

,128

Basic Materials Industry and construction

112

176,83

Consumption goods

101

177,14

Consumption services

64

159,51

Technology and communications

19

195,34

Total

339

Day difference in CFS

Oil and energy

43

135,63

6,113

,191

Basic Materials Industry and construction

110

165,69

Consumption goods

89

167,52

Consumption services

60

152,27

Technology and communications

19

188,32

Total

321

Websites analysis

Descriptive analysis of Websites attributes

In the companies´ Websites study, Table 6 gathers the results of the attributes descriptive analysis, evidencing a 100% presence of variables in all the analyzed Websites. In the carried out evaluation of detail level of financial and non financial information quantity disclosed by companies on Internet, It is evident that the variables with the most significant punctuations are those related to the corporate government (97,9%) in the "completely detailed scale" while the attributes related to the market evolution, investment policies and companies´ operations future plans are in the highest frequencies (6,3%) with regard to the "not detailed" scale.

This section has allowed determining that most companies have a tendency to show a high detail information level, allowing a larger distribution of information. The obtained results, in general, are consistent with other studies (Iqbal, 2005; Hamid, 2005 and Sriram and Laksmana, 2006).

Table 6. Websites attributes by detail levels

Attributes

It is not included

Not detailed

Not very detailed

Detailed

Very detailed

Completely detailed.

Total

f

%

f

%

f

%

f

%

f

%

f

%

f

%

Shareholders structure

3

2,1%

0

,0%

0

,0%

1

,7%

2

1,4%

136

95,8%

142

100,0%

Received dividend by shareholder

2

1,4%

2

1,4%

0

,0%

8

5,6%

8

5,6%

122

85,9%

142

100,0%

Companies Stock Exchange evolution

7

4,9%

9

6,3%

0

,0%

4

2,8%

7

4,9%

115

81,0%

142

100,0%

Shareholder general board

1

,7%

2

1,4%

0

,0%

2

1,4%

5

3,5%

132

93,0%

142

100,0%

Other information

1

,7%

1

,7%

0

,0%

0

,0%

2

1,4%

138

97,2%

142

100,0%

Main companies economic-financial results

1

,7%

0

,0%

0

,0%

1

,7%

5

3,5%

135

95,1%

142

100,0%

Companies corporative strategies

6

4,2%

8

5,6%

3

2,1%

7

4,9%

12

8,5%

106

74,6%

142

100,0%

Companies managers

2

1,4%

0

,0%

0

,0%

2

1,4%

19

13,4%

119

83,8%

142

100,0%

Agreed agreements in the companies managers meetings

4

2,8%

1

,7%

2

1,4%

4

2,8%

23

16,2%

108

76,1%

142

100,0%

Other countries company operations

13

9,2%

6

4,2%

1

,7%

2

1,4%

10

7,0%

110

77,5%

142

100,0%

Employees number

3

2,1%

3

2,1%

2

1,4%

11

7,7%

14

9,9%

109

76,8%

142

100,0%

Investment policies

6

4,2%

9

6,3%

3

2,1%

16

11,3%

38

26,8%

70

49,3%

142

100,0%

Companies products or services

2

1,4%

2

1,4%

1

,7%

0

,0%

11

7,7%

126

88,7%

142

100,0%

News about the company's activities

2

1,4%

3

2,1%

3

2,1%

2

1,4%

6

4,2%

126

88,7%

142

100,0%

Corporative government

2

1,4%

0

,0%

0

,0%

1

,7%

0

,0%

139

97,9%

142

100,0%

Environmental measures

5

3,5%

6

4,2%

1

,7%

18

12,7%

21

14,8%

91

64,1%

142

100,0%

Human resource policies

5

3,5%

6

4,2%

4

2,8%

16

11,3%

25

17,6%

86

60,6%

142

100,0%

Future plans about other company operations

5

3,5%

9

6,3%

4

2,8%

19

13,4%

29

20,4%

76

53,5%

142

100,0%

Economic/financial ratio

6

4,2%

8

5,6%

4

2,8%

28

19,7%

31

21,8%

65

45,8%

142

100,0%

Mid-term financial reports published in less than a year

8

5,6%

0

,0%

0

,0%

0

,0%

2

1,4%

132

93,0%

142

100,0%

Previous years financial reports, belonging to the three last years

2

1,4%

0

,0%

0

,0%

2

1,4%

2

1,4%

136

95,8%

142

100,0%

Therefore, from Table 6 comes off the existence of the highest punctuation (completely detailed) in attributes related to: mid-term financial reports (93%) and previous year's financial reports (95,8%); but this was not the case for the economic and financial ratio (45,8%).

Nevertheless, one of the problems observed in information disclosure is related to audit reports. Due to the fact that some companies omitted to scan the auditor's signature, accounting users are in difficulties when making decisions based on the authenticity of financial documents. In addition, it can be said that other problems some companies face are related to timely information; that is to say, while some companies present current and detailed data, others publish outdated data. Therefore, some companies´ attributes have lower observed punctuations.

Going back to the obtained empiric evidence, a high frequency in the "completely detailed" level of attributes is observed: Shareholders structure (95,8%), Received dividends by shareholder (85,9%), Companies Stock Exchange evolution (81%) and Shareholder general board (93%).

In relation to the attributes: company managers and agreed agreements in companies' managers meetings, they have been assigned a high qualification, this value prevails on most of the analyzed Websites. In the variable, company´s future plans, it can be also observed that it presents a frequency of 53,5% in the highest qualification.

Regarding companies´ products or services variable, the detail level presents a good punctuation. A 74,6% frequency (completely detailed) is observed when examining the corporative strategies attribute.

The test of attributes detail levels by productive sectors was carried out after analyzing the previous results. On this respect, in Table 7 it is realized that Websites information, in general has a high frequency in the highest punctuation "completely detailed" for all the productive sectors. The lowest scale "not detailed" corresponds to the basic materials, industry and construction sectors (28,6%). Therefore, it can be said that some studies have stated that there are factors which can determine companies´ information disclosure on Internet, such as the company´s size (Marston, 2003) or the productive sector (Oyelere et al., 2003).

Table 7. Websites detail level by productive sectors

Detail level

Productive sector

Oil and energy

Basic materials Industry and construction

Consumption goods

Consumption services

Technology and communications

Eurostoxx50

f

%

f

%

f

%

f

%

f

%

f

%

Not included

0

,0%

5

14,3%

12

34,3%

2

9,5%

0

,0%

0

,0%

Not detailed

2

15,4%

10

28,6%

9

25,7%

8

38,1%

0

,0%

0

,0%

Little detailed

1

7,7%

9

25,7%

5

14,3%

1

4,8%

0

,0%

0

,0%

Detailed

4

30,8%

17

48,6%

14

40,0%

9

42,9%

3

50,0%

0

,0%

Very detailed

5

38,5%

28

80,0%

24

68,6%

12

57,1%

2

33,3%

0

,0%

Totally detailed

13

100,0%

35

100,0%

34

97,1%

21

100,0%

6

100,0%

32

100,0%

Total

13

100,0%

35

100,0%

35

100,0%

21

100,0%

6

100,0%

32

100,0%

Websites factorial analysis

The factorial analysis (FA) is based on the study of correlations between used variables in order to find groups of them to reduce their dimensionality in Websites. Therefore, the objective in this section is to identify and quantify common factors among attributes. Aiming that FA is appropriate there must be high correlations between variables, so that, it can be supposed they can be explained according to common factors. In consequence, it was decided to apply KMO (Kaiser-Meyer-Olkin) tests of sample adaptation and Bartlett's Test of Sphericity to confirm the correlation grade.

Once the results were obtained, KMO analysis of 0,90 turns out to be an excellent indicator of data sampling adaptation and with a sig=0,000 value, Bartlett's Test of Sphericity was rejected. As a consequence, these results confirm that it is appropriate to perform the factorial analysis.

In Table 8, it can be observed that the factorial pattern presents a solution of three factors explaining around 74% of the total variation. The first factor (component 1) stands out with 51,779% of the total variation explanation. Meanwhile, the other two factors explain 16,614% and 5,518% of the total variation.

Table 8. Total detailed variation of KMO and Bartlett's Test of Sphericity

Component

Initial Autovalues

Sums of saturations at square extraction

Sums of saturations at square rotation (a)

Total

Variation%

Accumulated %

Total

Variation %

Accumulated%

Total

1

10,874

51,779

51,779

10,874

51,779

51,779

9,160

2

3,489

16,614

68,393

3,489

16,614

68,393

8,594

3

1,159

5,518

73,912

1,159

5,518

73,912

4,138

4

,831

3,957

77,869

5

,774

3,688

81,557

6

,592

2,818

84,375

7

,493

2,350

86,725

8

,445

2,119

88,844

9

,388

1,849

90,693

10

,315

1,499

92,192

11

,285

1,357

93,549

12

,251

1,196

94,745

13

,229

1,089

95,834

14

,190

,906

96,740

15

,166

,792

97,532

16

,157

,747

98,279

17

,130

,619

98,898

18

,106

,503

99,400

19

,071

,340

99,741

20

,035

,167

99,908

21

,019

,092

100,000

In this part, factorial rotations are carried out in order to facilitate the interpretation of factorial pattern results, with those factorial rotations, it is intended to select the simplest and most comprehensible solution. In the same order of ideas, assuming that factors are correlated to each other, the oblique rotation method was applied and the correlation evidenced among factors was evaluated as well. Thereby, when examining the matrix structure in a rotated space, the attributes agglutination in three factors is shown.

Regarding the first factor called "Business Information", it approximately explains 52% of the total variation. This factor is compound of nine attributes that agglutinate business information, such as, market evolution and companies´ corporate strategies. The factorial loadings present high values ranging from 0,65 to 0,94 (Table 9).

Table 9. First factor: business information

Variable

Factor loadings

Companies´ market evolution

,653

Companies´corporative strategies

,860

Company´s operations in other countries

,704

Number of employees

,757

Investment policies

,941

Environmental policies

,862

Human resource policies

,902

Company operation future plans

,879

Economic/financial ratio

,875

In Table 10, the second factor is observed explaining approximately 16% of the total variation. This factor is composed of 8 attributes, called "Financial information". It should be pointed out that loading saturations fluctuate from 0,67 to 0,97.

Table 10. Second factor: financial information

Variable

Factor loadings

Shareholders structure

,801

Received dividens by shareholders

,678

Shareholders general board

,834

Other information

,973

Main company´s economic-financial results

,873

Company managers

,870

Corporative government

,946

Previous years financial reports,belonging to the three last years

,945

In relation to the third factor, it approximately explains 6% of variables variation, and it is composed of the attributes shown in Table 11. The factor loadings are shown with clear and high saturations in this factor. This component is called "Miscellaneous information".

Table 11. Third factor: miscellaneous information

Variable

Factor loadings

Company´s products or services

,873

Company activities news

,828

Mid-term financial reports published in less than a year

,945

In general terms, the three obtained factors present moderate positive correlations, evidencing an excellent adaptation of variables in the analyzed instrument (Table 12).

Table 12. Components correlation matrix

Component

1

2

3

1

1,000

,492

,472

2

,492

1,000

,250

3

,472

,250

1,000

In fact, in figure 1, components rotated in three dimensions can be observed, the factorial configuration of variables group is shown allowing to clearly identifying the presented factors.

Figure 1. Components in rotated space

Conclusions

The main purpose of this study was to analyze companies´ information quantity through financial statements, audit reports and Websites, in order to evaluate if the disclosed information is enough to satisfy accounting users' needs. Therefore, data from Madrid Stock Exchange and Eurostoxx50 companies have been used. The study was divided into two parts; on one hand, the analysis of companies´ financial statements and audit reports corresponding to the period 2004-2007 and, on the other hand, the analysis of companies´ Websites during the period July-September, 2009.

To that effect, when evaluating information quantity through financial statements and audit reports, once the hypotheses empiric contrasts were carried out, it is observed that there is a relationship between information quantity and the analyzed variables.

Therefore, a positive tendency is observed in economic-financial information elaboration and disclosure by companies in all the productive sectors. This result is highly related to the deep changes stated in the accounting environment with the presentation of two new reports, such as the statement of cash flows and the statement of changes in equity, therefore, the user will have information advantages because he has access to enough financial information that explains the state of the companies.

On the other hand, it was proved that the formal aspects of the audit report are presented with normality, leading to a better understanding of the auditing job carried out with the financial statements of the companies. Additionally, it can be seen a positive relationship between the revelation of the formal aspects and the audit firms, this could be related to some legal characteristics of the country where the reports are prepared. Indeed, the formal aspects of the report could be valuable data available to accounting users in order to knowknowledge the financial statements that have been audited and other data that are not less important but show an insight about the companies.

Additionally, the findings allowed proving the existence of delays in the delivery of the auditing reports to the Spanish National Securities Market Commission once the exam was carried out for the case of Spanish companies. This finding evidences the delay in the availability and access to the quantity of information to accounting users. This analysis evidences the existence of problems in timely information, because it is not available in at the right time. This fact reveals that the information requirements to make decisions will be blocked to the different agents.

In relation to the Websites, it was observed that companies´ information quantity has a high detail level in the analyzed companies' sample. According to the obtained results from the factorial analysis three factors where companies´ Websites attributes agglutinate can be clearly distinguished. They are called "Business information", "Financial information" and "Miscellaneous information". It is necessary to point out from the factorial analysis results, that an alternative arises to organize the information quantity disclosed in Websites, so that, accounting users can make more assertive decisions.

It is necessary to highlight that evidences found in this document, only represent an approximation of the studied reality that can be used in further researches, aiming to examine other empiric contrasts related to this topic. According to the found results, it could be suggested to accounting regulator entities, to enlarge more the requirements related to information disclosure, so that, disclosed data are clearer. Additionally, it could be suggested to companies to take more initiatives in relation to voluntary information disclosure through the two means evaluated in this research study. Consequently, this would be a feasible way to satisfy accounting information users' needs.