UK Account Preparers' Perspectives on the Role of Intellectual Capital Reporting
Presented to the Global Accounting and Organisational Change Conference, 9-11 July 2008, Melbourne, Australia.
31 Pages Posted: 14 Mar 2009
Date Written: July 9, 2008
Abstract
Purpose: Most prior research into intellectual capital reporting has examined disclosures in annual reports, but there has been little research ascertaining the views of preparers of accounts. This paper reports the results of an interview-based empirical investigation into the motivations of those preparing corporate reports in voluntarily reporting intellectual capital information in the UK.
Design/methodology/approach: This study has involved conducting and analysing interviews with one or more senior financial executives from each of a sample of 15 companies.
Findings: From the preparers' perspective, disclosure of intellectual capital information in the annual report had little, if any, new information content other than by exception. Reporting strategies actively incorporate the use of a variety of reporting media - not just the annual report. The annual report was considered to be one of the least effective media for reporting the complexities inherent in most intellectual capital value drivers. Face-to-face meetings with analysts were generally considered to be the most effective media.
Research limitations: The sample selection was based on the willingness of corporations to participate, meaning the selection was potentially biased. It is not possible to identify the organisations whose ICR practices have been studied because of confidentiality agreements with the interviewees. This places limits on the ability of other researchers to independently replicate the findings of this study.
Originality/value: ICR is a largely voluntary practice, and there has been little systematic research into ICR practices of UK companies, or of the factors motivating preparers in using different media to report on IC.
Keywords: Intellectual capital reporting, voluntary reporting, annual reports, reporting media, United Kingdom, preparers' motivation
JEL Classification: M4, M40, M41, M49
Suggested Citation: Suggested Citation
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