Social and Environmental Disclosures in the Annual Reports of Malaysian Companies

Since the early 1970s, a number of studies have investigated the nature and frequency of corporate social and environmental disclosures, their patterns and trends, and their general relationship to the corporate size, profitability and environmental performance. The purpose of this study is to evaluate the amount of social and environmental disclosures made in annual reports of companies listed on the main board, Kuala Lumpur Stock
Exchange (KLSE). In particular, this study empirically examines the impact of five firm-specific characteristics on the general level of voluntary disclosures in the annual reports of the main board KLSE-listed companies. The five variables are firm size, ownership structure, industry type, raising capital and size of audit firm. In so doing, an indexing procedure is used to measure the contents of disclosures, and the relationship between the
disclosure index and the firm characteristics is tested. The results indicate that corporate social and environmental disclosures are incomplete and very low. The results also show that firm size and ownership are weakly related with the level of social and environmental
disclosure, whereas industry type, raising capital, and audit firm size are not related with the level of social and environmental disclosure.