Timeliness as an ethical dimension of financial reporting by Indian tech companies—a compliance study

Abstract

As Corporate governance became the subject of attention in recent times, its presence is like a backbone for any corporate that emphasizes its role for survival and sustainable growth in the long run. It ensures transparency. Transparency includes the following eight concepts, namely accuracy, consistency, appropriateness, completeness, clarity, timeliness, convenience, and governance and enforcement. Out of these, Timeliness of financial reporting is one of the attributes of good corporate governance identified by the OECD and World Bank. Reporting in time is regarded as good ethics in governance. Shareholders and other stakeholders need information while it is fresh and with high relevance. The Indian tech industry has demonstrated its leadership under challenging circumstances by performing a fair business in turbulent times. Though the pace of their growth is slow, yet the overall growth story is not too much affected. This paper examines the timeliness of financial reporting by Indian tech companies. Timeliness was measured by counting the number of days that had lapsed between the year-end and the date of the auditor's report of the concerned companies. This study took 29 tech companies which constitute the Tech Index of Bombay Stock Exchange and compared their reporting patterns for the financial years 2006-2010. The reliable data were drawn from the CMIE database Prowess and annual reports of the respective companies. This study used Chi-Square Test and ANOVA to analyze the data. It is found that there is no significant time lag in financial reporting of Indian tech companies. However, there is a significant difference among the Indian tech companies in their reporting pattern.