An exploratory study of users' perceptions on tax disclosure in annual reports of Malaysian companies

• Main Author: Nurul Afza, Abd Rashid
• Format: Thesis
• Language: English; English
• Published: 2017
• Subjects: HF5601-5689 Accounting
• Online Access: https://etd.uum.edu.my/6750/1/s814467_01.pdf; https://etd.uum.edu.my/6750/2/s814467_02.pdf; https://etd.uum.edu.my/6750/

The annual report is an important document that provides key information for different range of stakeholders to understand a company’s performance. Users of financial reporting commonly access to the tax information from the companies’ annual report to make decisions. This study is carried out to explore the user’s perceptions pertaining to the tax disclosure in the annual reports of listed companies in Malaysia. The main objectives is to determine user’s perception on the importance of tax disclosure, current tax disclosure and usefulness of more tax disclosure. This study also to identify any differences between users and their perceptions on level of tax disclosure knowledge. Findings from this study show that tax information disclosed by Malaysia Company’s annual report is limited. Stakeholder as user of annual report agreed that tax disclosure section is an important part for tax information as annual report is the main sources of company tax information available to stakeholders. Thus, more tax information is needed to be disclosed in annual report. Stakeholder believes that tax disclosure is beneficial in facilitating decision making. Tax professional and IRBM officer as the major groups of respondent in this study believe that tax disclosure helps tax authorities in handling their tax audit. With more tax information disclosed in annual report, companies’ tax practices will be discussed in detail and thus increased the tax transparency. In conclusion, this study found that users of annual reports in Malaysia perceive that tax disclosure is an important part of accounting disclosure in the annual reports but it is still, not detail and too technical to be interpreted. Users of annual reports in Malaysia also agreed that more tax disclosure would be useful for stakeholders to comprehend tax matters of the companies. In short, users perceive that relevant and sufficient tax disclosure would improve the quality of the annual reports of Malaysian companies as well as enhancing its transparency.