Beyond compliance: Does IAS 34 disclosure quality enhance financial performance? Evidence from the banking sector of Bangladesh

Abstract

The impact of disclosure quality (according to International Accounting Standard IAS 34) on the financial performance of listed commercial banks in Bangladesh has been discussed in this study. The number of firm-quarter observations varied between approximately 100 for the quarterly data set from 2021 through 2025. Data were collected from interim and annual reports, as well as the disclosures in these reports of the Dhaka Stock Exchange and the Bangladesh Securities and Exchange Commission (BSEC). Panel regression analysis was used, and return on assets (ROA) was used as an indicator of financial performance, and the IAS 34 disclosure compliance score (DCS) was the primary independent variable. The major control variables used were firm size, leverage, and liquidity. The Hausman test was used to justify fixed-effects estimation, and alternative measures of profitability and lagged disclosure variables were used to assess the robustness of the results. The results revealed that IAS 34’s disclosure quality was found to have a positive and significant correlation with financial performance. Size and liquidity have a positive impact on performance, while leverage has a negative effect. The results indicate that improving the transparency of reporting helps to reduce the information gap, increase accountability, and enhance stakeholder trust. This study adds to the current financial reporting literature in an emerging economy and provides practical implications for regulators, investors, auditors, bank management, etc.