IT and Web-Based Accounting

Volume 17, Number 1 Article by Vasal V K and Srivastava R P March, 2005

IT and Web-Based Accounting - Evidence from the Indian Capital Market :

The Internet has provided businesses with an infrastructure for timely, efficient, and reliable outflow of information. It has also provided other stakeholders and regulators with a new instrument to seek, analyse, and control corporate reporting behaviour. Implementation of IT solutions, thus, could contribute to good corporate governance.

V K Vasal and R P Srivastava investigate the Webbased accounting and reporting practices in the Indian capital market. They examine the timeliness of Web-based reporting with shareholding-pattern as a proxy variable, and also explore the association between the timeliness of Web-based reporting and the select corporate characteristics of capital market groups, industry type, and foreign listing. The sample for the study consisted of 781 companies trading in the capital market segment of the National Stock Exchange of India.

The timeliness of Web-based reporting by the Indian corporate sector is revealed to be much below the norms of good corporate governance. It was relatively lower for the mid-cap and low-cap companies vis-a-vis large-cap companies. While there were no statistically significant differences in the reporting behaviour of manufacturing and services companies and the IT industry, the financial services industry was relatively better than the rest. The reporting practices of foreignlisted companies was not significantly different from those trading only in the domestic capital market. However, companies trading on the US capital markets have comparatively better reporting practices than those trading in the European. These findings, besides providing a sound basis for formulating testable hypotheses for future research, have important policy implications for improving the standard of corporate governance in India.

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