Organizational characteristics and disclosure practices of non-profit organizations in Malaysia

Abstract

The purpose of this study is to examine the influence of organizational characteristics on the extent of disclosures in the annual reports of non-profit organizations (NPO) in Malaysia. Organizational characteristics and the extent of disclosures are obtained from the content analysis of annual reports of 213 NPOs registered with Registrar of Societies in Malaysia for the financial period 2010. This study provides evidence that the overall extent of disclosure is low. Of the organizational characteristics, this study revealed significant positive relationships between size and some types of funds available to the NPOs. The significant positive relationships between certain types of funds and extent of disclosures in some parts of the annual reports indicate selective disclosure strategies by non-profit managers, thus reducing meaningful transparency in the non-profit sector. Nevertheless, it indicates that non-profit managers are using disclosures in annual reports in managing their inter-organizational relationships in ensuring continuous flow of resources to their organisations.