Abstract:
The present study investigates the effectiveness of changes in the regulatory environment on the quality of compliance to mandatory disclosure requirements in Bangladesh. Statistical analysis of the Mandatory Disclosure Index, as developed in this paper using annual reports of the exchange listed firms before and after the changes in the regulatory environment, shows a significant improvement in the quality of compliance during the more regulated time period. The size of the firm, the qualification of its accounting staff that prepares financial statements and the reputation of its auditing firm have significant positive impact on the quality of compliance. The analysis presented in the study point to two additional important findings: lack of profitability of the firm does not seem to affect the quality of its compliance, and the performance of domestic firms are at par with foreign affiliated firms as far as the quality of the compliance is concerned. The findings reported in the present study lend support to the conventional notion that well packaged and timed regulations can foster sustainable development in the overall reporting environment of a country.
