Financial reporting on the Internet: the portuguese case

Abstract

Due to recent developments in information technologies, Portuguese companies are using the Internet to disclose accounting information through their web sites. Portugal is thus following a universal trend to use the Internet as a way to provide instant and simultaneous access to accounting information, particularly to existing and potential investors. After presenting the advantages and eventual risks of this form of financial reporting and analysing previous investigative reports, particularly from the two main accounting standards setting organisations, this paper investigates the degree to which the Internet is being used by Portuguese companies listed on the Lisbon Stock Exchange, to present accounting and financial information. The web sites of these companies were examined throughout March 2000 to February 2001, with a view to determining which companies present financial information and whether the information provided is summarised, identical to the paper version of the Report and Accounts or is more detailed. In addition, to describe the extent of electronic financial reporting in Portugal, we tested three hypotheses: - First hypothesis: there is no significant difference between company size and the extent of financial disclosure on the Internet; - Second hypothesis: there is no significant difference between industry type and the extent of financial disclosure on the Internet; - Third hypothesis: there is no significant difference between overseas listings and the extent of financial disclosure on the Internet. Given the totally different context of information reporting that the web represents, we think what nowadays exists is simply the first stage of the growing development in online company performance reports.