Companies should prioritize transparency and disclosure

Oct 13, 2025 by magicalceylontours.com 98 views

The Effect of Internet Financial Reporting and the Level of Disclosure of Website Information on the Frequency of Trading of Manufacturing Companies Listed on the Indonesia Stock Exchange

Introduction

In today's digital age, the internet has become a crucial platform for companies to disseminate financial information to stakeholders, including investors. The Indonesia Stock Exchange (IDX) is one of the largest stock exchanges in Southeast Asia, with a significant number of manufacturing companies listed on it. The frequency of trading of these companies' shares is a critical aspect of their performance, and various factors can influence it. This study aims to analyze the effect of Internet Financial Reporting (IFR) and the level of disclosure of website information on the frequency of stock trading of manufacturing companies listed on the IDX.

Background

The importance of IFR in modern business cannot be overstated. It provides stakeholders with timely and accurate financial information, enabling them to make informed investment decisions. The IDX has implemented various regulations to ensure that listed companies disclose their financial information in a transparent and consistent manner. However, the effectiveness of IFR in influencing the frequency of trading of manufacturing companies' shares is still a topic of debate.

Methodology

This study employed a descriptive and quantitative approach to analyze the effect of IFR and the level of disclosure of website information on the frequency of stock trading of manufacturing companies listed on the IDX. The population consisted of 134 active manufacturing companies on the IDX from 2015 to 2018. The sampling technique used was saturated sampling, where the entire population was used as a sample in this study. Data analysis was carried out using multiple linear regression with a panel data approach.

Results

The results of this study showed that IFR had a positive but not significant influence on the frequency of trading of manufacturing company shares. On the other hand, the level of disclosure of website information had a positive and significant influence on the frequency of trading of the shares of these companies. This suggests that although IFR can affect the market, its impact may not be strong enough to increase trading activities significantly. In contrast, transparent and complete information displayed on the company's website can attract more investors' attention, thereby increasing the frequency of stock trading.

Analysis and Explanation

The effect of IFR on the frequency of trading of manufacturing companies' shares is often considered important in a modern context where information transparency is the key in making investment decisions. However, the results of this study showed a positive effect, but its significant levels may be caused by several factors. One of the factors that might be a lack of investor understanding of the financial statements presented online. Investors may rely more on sources of information, such as analyst recommendations or market news, rather than accessing reports on the company's website.

On the other hand, the high level of information disclosure on the company's website can create trust for investors. If the information presented is complete and easily accessed, this will facilitate investors in conducting analysis and decision making. A better level of transparency can reduce the risk of asymmetrical information, where investors have more limited access to information than company management.

Conclusion

Overall, this research provides an important insight into how internet financial reporting and the level of disclosure of website information can affect the frequency of stock trading. Although IFR has a positive effect, disclosure of information through the website turns out to be more significant on trading activities. Therefore, companies must be more active in increasing transparency and quality of information delivered through their online platforms, in order to attract investors and increase the frequency of stock trading on the Indonesia Stock Exchange.

Recommendations

Based on the findings of this study, the following recommendations are made:

Companies should prioritize transparency and disclosure: Companies should ensure that their financial information is accurate, complete, and easily accessible on their website.
Investors should be more proactive in accessing company information: Investors should take the initiative to access company information, rather than relying on analyst recommendations or market news.
Regulatory bodies should monitor and enforce disclosure requirements: Regulatory bodies should monitor and enforce disclosure requirements to ensure that companies comply with the regulations.
Companies should optimize their digital platforms: Companies should optimize their digital platforms to inform stakeholders more effectively and increase transparency.

By implementing these recommendations, companies can increase the frequency of trading of their shares and improve their overall performance on the IDX.
Frequently Asked Questions (FAQs) on the Effect of Internet Financial Reporting and the Level of Disclosure of Website Information on the Frequency of Trading of Manufacturing Companies Listed on the Indonesia Stock Exchange

Q: What is Internet Financial Reporting (IFR)?

A: Internet Financial Reporting (IFR) refers to the dissemination of financial information through the internet, enabling stakeholders to access and analyze financial data in a timely and accurate manner.

Q: How does IFR affect the frequency of trading of manufacturing companies' shares?

A: The results of this study showed that IFR had a positive but not significant influence on the frequency of trading of manufacturing company shares. This suggests that although IFR can affect the market, its impact may not be strong enough to increase trading activities significantly.

Q: What is the level of disclosure of website information, and how does it affect the frequency of trading of manufacturing companies' shares?

A: The level of disclosure of website information refers to the extent to which companies provide financial information on their website. The results of this study showed that the level of disclosure of website information had a positive and significant influence on the frequency of trading of the shares of manufacturing companies.

Q: Why is transparency and disclosure important for companies listed on the Indonesia Stock Exchange?

A: Transparency and disclosure are essential for companies listed on the Indonesia Stock Exchange as they enable stakeholders to make informed investment decisions. A better level of transparency can reduce the risk of asymmetrical information, where investors have more limited access to information than company management.

Q: What are some best practices for companies to increase transparency and disclosure?

A: Some best practices for companies to increase transparency and disclosure include:

Ensuring that financial information is accurate, complete, and easily accessible on the company's website
Providing regular updates on the company's financial performance
Conducting transparent and regular communication with stakeholders
Ensuring that the company's website is user-friendly and easy to navigate

Q: What are some recommendations for investors to make informed investment decisions?

A: Some recommendations for investors to make informed investment decisions include:

Taking the initiative to access company information, rather than relying on analyst recommendations or market news
Conducting thorough analysis of the company's financial performance and prospects
Evaluating the company's management team and their track record
Considering the company's industry and market trends

Q: What are some implications of this study for regulatory bodies?

A: The findings of this study suggest that regulatory bodies should monitor and enforce disclosure requirements to ensure that companies comply with the regulations. This includes ensuring that companies provide accurate, complete, and timely financial information on their website.

Q: What are some future research directions based on the findings of this study?

A: Some future research directions based on the findings of this study include:

Investigating the impact of IFR on the frequency of trading of companies listed on other stock exchanges
Examining the relationship between IFR and other factors that influence the frequency of trading, such as market sentiment and economic conditions
Conducting a more in-depth analysis of the level of disclosure of website information and its impact on the frequency of trading.