A comparative study on quality of interim reports of select automobile and pharmaceutical companies

Interim Financial Reports published by companies every quarterly is considered to be the prime source for the stakeholders to keep track of the financial performance of the company. There has been a lot of discussions in and around business people and federations about the compliance of the standards of interim reports. Interim reports being a transparent disclosure document, companies have a hesitant approach towards the disclosure of information as per the standards. Though companies claim to have disclosed the reports as per the standards, the claim seems to be failed by reports of the recent studies on the quality of interim reports of companies in India from majority of the sectors. In India the standards of the interim reports are governed by IAS-34, AS-25 and SEBI Guidelines. The above standards streamlines the format of the reports of the companies publishing interims. This study is aimed at assessing the quality of recently published interim reports of two major industrial sectors of India viz., automobile and pharmaceutical sectors. Quality of the interim is measured on two dimensions namely content and context. Majorly the study has attempted to find the minimum requirement disclosures as per the standards and the evaluation has been done using the scorecard developed by Mak Yuen Teen and Penelope Phoon-Cohen for business timesnamed Business Times Corporate Transparency Index. Evaluation is based on the four major criteria's namely content, context, timeliness and auditing.