Shareholders’ attitude towards financial statements disclosure : evidence from Sri Lanka

Abstract

Purpose: The major objective of the study is to identify the relationship between financial statement disclosure and shareholder attitude change relating to the investors who have invested in the companies which are registered under the Colombo Stock Exchange. -- Design/Methodology/Approach: Primary data was collected from 110 investors who invested in Colombo Stock Exchange. The questionnaire was designed to examine the shareholders’ attitude change towards financial statement disclosure by considering their awareness and perception on quality of information disclose in Financial statements. Shareholder’s attitude change is considered as the dependent variable with four indicators; Information Provision, Feedback and Consultation and Communication and Improvement. Financial Statement Disclosure is the independent variable and independent variable explained by four indicators namely, Income Statement Disclosure, Balance Sheet Disclosure, Cash Flow Statement Disclosure and Notes. -- Findings: The result exposed the fact that income statement disclosure and the cashflow statement disclosure significantly changed the shareholder’s attitude. -- Practical Implications: The article offers insights to perception and attitude of shareholders to identify the shareholders’ attitude change on financial statement disclosure indicate how shareholders react to financial statement disclosure and disclosure quality of reporting. -- Originality/Value: The article presents significant evidence in terms of its scrupulous approach towards checking the toughness of results.