The IUP Journal of Accounting Research and Audit Practices:
A Study on the Disclosure Practices of Banks in India with Reference to Indian Accounting Standards
The IUP Journal of Accounting Research and Audit Practices
B G Poornima, Swizel Jesslin Alphonso and Y V Reddy
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Disclosure may be defined as a practice of releasing important information about various activities and affairs of the business through annual reports, press releases, interim reports, quarterly results and various other published results. The present study mainly aims at examining the disclosure practices followed by the public and private sector banks in India and the factors affecting the disclosure practices of banks in India. Banks forming a part of Nifty Bank Index have been considered as the sample for the study for the period 2014-15. There are 12 banks included in this index comprising 7 private sector banks and 5 public sector banks. It is concluded that since all the banks considered in the study are listed banks, disclosure scores among public and private sector banks do not vary to a great extent. Accounting for Fixed Assets and Revenue Recognition are the highly disclosed accounting standards, while Accounting for Amalgamation is the least disclosed accounting standard. Size of the bank, profitability and age are the significant factors affecting the disclosure practices of banks in India. The results also show that disclosure practices vary among banks as well as across the years.
An enterprise functions in a multidimensional and complex environment with various factors
having considerable influence on its survival. Various stakeholders of this environment such
as employees, government, shareholders, competitors, investors and the general public
affect the business in different ways. An enterprise will be able to ensure its growth only if
these factors are considered and proper care is taken to cater to their needs so that they lead
to a positive impact on the company rather than causing problems to them. Therefore, a firm
needs to consider every aspect of its external as well as internal environment and take
appropriate measures to satisfy them so as to build a favorable image of itself in the society.
Business transparency is an important element in this regard which helps various stakeholders to have a clear image about the affairs of the firm. Therefore, firms adopt various tools and
policies to ensure that their business processes are carried out as per the ethics of society and
Disclosure is one such tool that companies adopt in order to enable that their enterprise is
presented in a favorable manner. Disclosure may be defined as a practice of releasing important
information about various activities and affairs of the business. It involves reporting all positive
and negative information about financial and other aspects of a firm. It helps various parties
such as shareholders to draw a complete and informed conclusion about the firm’s financial
position. It also enables prospective investors to make future predictions of company’s
performance based on the company’s past records and hence judge whether the company is
worth investing in.
Accounting Research and Audit Practices, Disclosure Practices, Banks in India, Reference, IAS, International Accounting Standards Committee (IASC), International Accounting Standards Board (IASB), IFRS, Indian Accounting Standards.