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IFRS Disclosure Compliance in Malaysia: Insights from a Small‐sample Analytical Study


Australian Accounting Review

Published online on


This study provides unique insights into the disclosure practices of large Malaysian publicly listed companies. Using an expanded compliant/non‐compliant data classification scheme, the 2011 annual reports of nine government linked companies (GLCs) and their non‐GLC industry equivalents are examined to determine compliance with all the disclosure requirements of eight accounting standards that form part of International Financial Reporting Standards. Results indicate that overall compliance is 45.8%, is not predictable and differs widely between standards. Contributions to the literature include distinguishing between ‘Note 1’ disclosures and standard‐specific disclosures that impact current or future year profitability and financial position, investigating incidences of partial disclosures and errors in disclosure, detection and analysis of patterns in disclosure/non‐disclosure, and reflections on the influence of data classification decisions on findings in compliance research. Firms tend to routinely comply with ‘Note 1’ descriptive disclosures and with standard‐specific disclosures that impact current year profitability and financial position. They routinely fail to provide details and explanations of undisclosed financial statement/off balance sheet items that impact future profitability and financial position. There is some evidence that GLCs demonstrate higher levels of standard‐related compliance in five (of eight) industries than do non‐GLCs. The study finds no association between disclosure and auditor.