Bangladesh Bank Training Academy Journal

Abstract

Non-bank financial institutions (NBFIs) prepare their financial statements complying with the requirements of different regulators. The study is conducted to illustrate the present status of compliance with the regulatory requirements in preparing the financial statements (FSs) of listed NBFIs in Bangladesh and analyzes the effectiveness of regulatory initiative in this regard. A list of 120 disclosure items has been selected consulting the related regulations. The study covered 20 non-bank financial institutions, which are listed on DSE up to 2008 and data have been collected from the annual reports of the concern firms for the years 2008 and 2011. The results show that the industry average total disclosure score of 2011 is 83.17% that was 56.17% only in 2008. This improvement has been possible because of regulatory initiatives in this regard. It indicates that the firms are very much reluctant to comply if the regulators do not push them. Therefore, to ensure full compliance with all requirements it is important to strengthen the capacity of the regulators for close supervision and monitoring. This type of regulatory initiative may be taken for other industries also that could improve disclosure level of the firms.