Determinants of the Related Party Disclosure Practice by Non-Financial Sectors in Bangladesh
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This study attempts to find out the determinants that have significant impact on the extent of related party disclosure. Albeit, related party is one of the most important reasons for corporate scandals, very few researches have been conducted to find the determinants of related party disclosures particularly in developing countries’ perspectives. This motivated the authors to find the determinants of related party disclosures. For conducting this study, a disclosure index of 28 disclosure items has been prepared and the annual reports of 102 listed non-financial firms for the year 2019-2020 of Dhaka Stock Exchange (DSE) were scrutinized against this disclosure index. The findings show that the related party disclosure by the sample companies is on an average 37.36%, which indicates that the current scenario of related party disclosure is not satisfactory. The regression analysis was done to find the determinants of related party disclosures. The results show that the association between the extent of related party disclosure and Multinational Subsidiary is statistically significant. The Security Category has negative but significant impact on the extent of disclosure. The result of this study will add value to the existing literature by providing the empirical evidence of the determinants of related party disclosures from a developing country’s perspective. From practical point of view, the outcome of this paper will help the regulators like Securities & Exchange Commission (SEC) to form a frame of reference for the related party disclosures requirement. The results of this study will also help future accounting researchers to work on this area and the investors to make investment decision on the non-financial companies.
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