Internet financial reporting: Turkish companies adapt to change

PPurpose – The purpose of this paper is to explore the sophistication of internet financial reporting (IFR) for Turkish listed firms and explore firm-specific drivers. Design/methodology/approach – The study surveys the web sites of all firms listed on the Istanbul Stock Exchange (ISE) during December 2009 using a well-established scoring system to measure IFR. Findings – It is found that size, auditor and corporate governance effects, as measured by a multivariate regression analysis framework, affect the sophistication of IFR. However, in extending the analysis by running separate regressions for small and large firms, these effects prevail only for large firms. Evidence also supports the industry effect for both small and large firms. Overall, large firms, audited by large international auditors, and included in the Corporate Governance Index of the ISE, are more likely to use sophisticated disclosure formats such as audio and video files, internal search engines and hyperlinks inside their annual reports. Originality/value – Using a unique data set, this paper provides a snapshot of how well Turkish companies adapt to change in IFR. Its novelty lies in its addressing the issue of IFR sophistication and the impact of firm-specific factors, such as profitability, growth prospects, firm size, ownership, corporate governance environment and industry effects, for the first time as they apply to Turkish firms