R. Atan

S. Zainon

Y. Bee Wah


               Purpose
                – The purpose of this paper is to examine the determinants of the extent of disclosure by non-profit organizations (NPOs) in Malaysia due to the growing interest in the disclosure practice studies of NPOs and given the importance of disclosure to ensure accountability and transparency. 
            
            
               Design/methodology/approach
                – This study involves three phases. First, the paper identifies information items NPOs need to disclose. Second, the paper conducts an online survey to determine the ratings of importance for the disclosure items. Third, the paper measures the extent of disclosure from the annual returns of 101 Malaysian NPOs for the year 2009. The paper uses hierarchical regression analysis to determine the significant determinants of information disclosure. 
            
            
               Findings
                – The key determinants are establishment of an external audit, financial performance and government support in terms of grants. The results show that the presence of external auditors promotes better reporting practice. Malaysian NPOs that receive funding and those with better financial standing disclose more information. 
            
            
               Research limitations/implications
                – The sample only covers NPOs with tax-exempt status in the state of Selangor and Wilayah Persekutuan in Malaysia. The sample size of 101 registered NPOs limits the generalization of the results. Inclusion and analyses of additional NPOs may offer generalizable results. 
            
            
               Practical implications
                – This study provides empirical evidence concerning the establishment of external audit for better information disclosure. It also provides 88 items that are important and required by stakeholders. 
            
            
               Originality/value
                – The study is based on 88 items of information according to the needs of stakeholders for information. The NPOs reporting index can assist the preparers of charity reporting in fulfilling the stakeholders’ requirements. The reporting index can also be used to assess the information disclosure of NPOs in Malaysia.
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An empirical study on the determinants of information disclosure of Malaysian non-profit organizations

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