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Assessing the development of voluntary internet financial reporting and disclosure in Egypt

Aly, Doaa Abd El Rehim Mohamed


Doaa Abd El Rehim Mohamed Aly


Jon Simon


Currently the provision of corporate financial information through the internet is a new issue confronting providers and users of financial information in Egypt. It is expected to be important as financial information would be disseminated worldwide and this availability of information could encourage people to invest in any part of the world. Studying internet reporting in Egypt will help in providing on line timely information, thus encouraging investors to invest in Egypt. It will meet stakeholders’ demands for greater speed and volume of financial information. Businesses must find better and more effective ways of communicating financial information with these stakeholders. Therefore, there is a need to examine the role played by the internet in communicating financial information in Egypt, in order to find out how that role may be enhanced.

The major objectives of the study were to 1) identify the extent of internet corporate financial reporting in the Egyptian companies; 2) identify factors which influence Egyptian listed companies to voluntarily adopt internet-based corporate financial reporting; 3) evaluate the effectiveness of voluntary internet financial reporting and disclosure to selected groups of users; and 4) explore the role of Investor Relations and auditors regarding internet financial reporting and their functions or procedures are affected. Innovation diffusion, institutional change, and economic-based theories were employed to explain the adoption of internet financial reporting in Egypt. To accomplish these objectives, a sequential explanatory triangulation design was employed, employing both quantitative and qualitative data collection and analysis.

Quantitative methods were used to achieve the first and second objectives. A disclosure index was constructed to determine the level of voluntary internet financial reporting of the 100 most active listed Egyptian companies for the year ended 2004. Ten hypotheses were formulated to test the relationship between the level of voluntary financial internet disclosure and the company’s characteristics. It was found that 27 companies had no websites, the websites of 9 companies were under construction, 62 companies had websites and 35 companies disclosed their financial information on their websites. The average disclosure rates of financial information were 30% for the Egyptian companies which had websites and 44% for companies having websites and disclosing financial information. 100% of communication companies and 67% of financial services companies disclosed financial information on their websites and all communication companies had disclosure scores over 50%. The results of Univariate analysis revealed that firm size variables (total assets, total sales); leverage variables (Total Debt /Total Assets and Long term Debt/ Total Assets); foreign listing; industry type; and audit firm size are significantly associated with the extent of internet disclosure at least at the 5% level of significance. The results of multiple regressions indicated that profitability, foreign listing and industrial sector (communications and financial services) are important factors affecting the amount and presentation formatting of financial information disclosed on Egyptian companies’ websites.

Qualitative method was used to accomplish the second, third and fourth objectives. Seventeen interviews were conducted with stakeholders [Investor relations officers, financial analysts & fund managers, audit partners & key managers from Egyptian Stock Exchange]. A framework was developed which includes six main factors affecting companies’ disclosure of financial information on the internet, which include companies’ characteristics [Size, Foreign listing, Industrial sector (banking and communications sectors), Capital structure (Foreign investors, Governmental ownership, Number of shareholders)], management style, amount of paper-based disclosure, imitation, rules and regulations, and number of analysts covering the company. Investor relations officers should be responsible and decide upon the financial information to be published on companies’ websites but this is not the case in Egypt. Auditors have no responsibility regarding internet financial reporting in Egypt.

This study makes the following contribution to knowledge:

- This study is the first which undertakes an empirical investigation regarding internet financial reporting and disclosure of Egyptian listed companies.
- This is the first study to examine the effects of culture, organizational structure and demographic characteristics on the adoption of voluntary internet reporting and disclosure.
- One of the significant features in this study is that it employed quantitative and qualitative methods to identify the factors which affect companies’ adoption of voluntary internet financial reporting and disclosure in Egypt.
- This study will contribute to the understanding of the concept, functions and activities of Investor Relations within companies and this might draw the attention to the importance of Investor Relations and help in the development of Investor Relations in Egypt. This is the first time that the role of Investor Relations has been investigated in Egypt, or indeed any Arab country.
- The disclosure index used was modified to be suitable for companies working in the Egyptian environment context. This index could be used by other researchers to investigate internet financial reporting and disclosure for companies working in other Arab countries that are experiencing similar economic changes.


Aly, D. A. E. R. M. (2008). Assessing the development of voluntary internet financial reporting and disclosure in Egypt. (Thesis). University of Hull. Retrieved from

Thesis Type Thesis
Deposit Date Aug 15, 2011
Publicly Available Date Feb 22, 2023
Keywords Business
Public URL
Additional Information Business School, University of Hull
Award Date Jan 1, 2008


Thesis (6.1 Mb)

Copyright Statement
© 2008 Aly, Doaa Abd El Rehim Mohamed. All rights reserved. No part of this publication may be reproduced without the written permission of the copyright holder.

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