Indra Abeysekera

An Empirical Investigation of Annual Reporting Trends of Intellectual Capital in Sri Lanka

This study examines the annual reports of each of the top 30 firms listed on the Colombo Stock Exchange in the period 1998/1999 to 1999/2000, using the ‘content analysis’ method. The findings indicate that the most reported accounting category during this period was external capital and the second most reported was human capital. There was an increase in the frequency of intellectual capital reporting over the 2 years, which this paper explains using political economy of accounting theory. Interestingly, the individual intellectual capital items of each capital category reported by firms in Sri Lanka differed from those found in other countries. It is hoped that the findings of this pioneering study can be used as a benchmark for future studies in Sri Lanka and in other developing countries.

Content analysis of social, environmental reporting: What is new?

Purpose: The aim of this paper is to review the use of content analysis as a research method in understanding SEA and to examine current contemporary foci of this research tradition. Further, several research method issues relating to the use of content analysis are examined. Methodology: Contemporary focus and research issues are analyzed to provide some future directions for scholars in the field of SEA, by categorizing work in the SEA, social environmental reporting (SER) and intellectual capital reporting (ICR) literature, according to the following: normative literature/theory/commentaries; focus of empirical investigation; quality SER research; combined research methodologies; content analysis method issues. Findings: Literature indicates that few attempts have been made to combine other research methodologies with content analysis although it has proven fruitful with the limited investigation undertaken to examine aspects of SER. Further extending the performance reporting by combining SER with ICR may provide useful information. Research Implications: Increasingly, researchers in the field of social and environmental accounting (SEA) need to be able to justify the specific research methods they use when collecting the empirical data that they examine in order to support and test opinions regarding the merit of different approaches to managing, measuring and reporting of SEA.

The Project of Intellectual Capital Disclosure: Researching the Research

This paper examines a number of key issues relating to intellectual capital (IC) disclosure by addressing some of the strengths, weaknesses and gaps of the extant research. The paper begins by examining the definitions of intellectual capital and intellectual capital disclosure currently in use. Methodological issues are examined in relation to the use of source documents, coding frameworks, and research methods. Both positivist and critical theoretical perspectives used to provide a theoretical underpinning of IC disclosure analysis are reviewed. The paper concludes by arguing for the importance of addressing these issues in order to improve the credibility of IC disclosure, and offers suggestions for doing so.

Intellectual capital reporting between a developing and developed nation

Purpose - This paper examines the patterns of intellectual capital reporting (ICR) of large listed firms in a developing nation, Sri Lanka. The aim of this study is to highlight the differences in ICR practice between developing and developed nations. Design/Methodology/Approach - The paper begins by examining each of the top 30 firms by market capitalization listed on the Colombo stock exchange in 1998/1999 and 1999/2000. Using the content analysis method, it reviews the annual reports of these firms to determine the types of intellectual capital (IC) items reported in Sri Lanka. It then compares these findings with a similar study undertaken in Australia during the same period (Guthrie and Petty, 2000). Findings - ICR differences were identified between Sri Lankan and Australian firms, and it is argued that that these differences can be attributed to economic, social and political factors. The paper highlights the need for a uniform ICR definition and a reporting framework that provides comparative and consistent reporting under the auspices of a regulatory body.Practical Implications - This study highlights important policy issues for Australia, Sri Lanka and other nations. These issues are even more pertinent in the light of the gradual international adoption of the International Financial Reporting Standards (IFRS), formulated by the International Accounting Standards Board (IASB).Originality/Value - Most papers on intellectual capital reporting have focused on firms in developed countries. This study offers insights into comparative reporting practices between a developed and a developing country.

A Template for Integrated Reporting

Purpose – This paper sets out to outline the concept of integrated reporting and to propose a template for integrated reporting in organisations. Design/Methodology/Approach – The approach to the conceptual model is founded on concepts proposed on integrated reporting by the King Report on Governance for South Africa (King III), and the International Integrated Reporting Council in the U.K. Findings – The integrated report should explain the story of reaching the organisation’s vision, underpinned by its values, enacted by management, monitored by governance, and using facets of resources relating to financial capital, intellectual capital, social capital, and environmental capital. Practical Implications – The paper proposes an integrated reporting framework, and provides an example of a template to be used in organisations. Originality/Value – To the best of our knowledge, this is the first academic paper that provides a coherent framework on integrated reporting, with a template.

Intellectual Capital Disclosure Trends: Singapore and Sri Lanka

Purpose - This paper investigates the intellectual capital disclosure trends and disclosure category differences of top 20 listed firms in a developing nation, Sri Lanka, and moderately developed nation, Singapore. The aim of this study is to highlight the differences in IC disclosure practice between developing and developed nations. Design/Methodology/Approach - The study investigates the top 20 firms by market capitalization listed on the Colombo stock exchange in 1998 to 2000. Using the content analysis method, it reviews the annual reports of these firms to determine intellectual capital disclosure trends in Sri Lanka. It then compares these findings with a similar unpublished study undertaken in Singapore during the same period (Cheng, Fok & Low, 2002). Findings - The study identified IC disclosure differences between Sri Lankan and Singapore firms, and suggest reasons for differences from country perspectives. The paper highlights the need for a uniform methodology in intellectual disclosure framework to establish consistent disclosure practices. Practical Implications - This study highlights the need to establish a uniform methodology for financial disclosure under International Financial Reporting Standards (IFRS) that can mobilize globally uniform disclosure intellectual capital disclosure practices. Originality/Value - This study offers insights into comparative trends in intellectual capital disclosure practices between a moderately developed and a developing country.

The influence of board size on intellectual capital disclosure by Kenyan listed firms

Purpose – The purpose of this paper is to examine the effect of board size on firms disclosing more, rather than less, strategic and tactical intellectual capital resources using the top 26 of the 52 firms ranked by the Nairobi Stock Exchange for market capitalization in 2002 and in 2003. This study identifies intellectual capital disclosure by three separate categories: internal capital, external capital, and human capital. Hence, this study examines the influence of board size on six disclosure outcomes. Design/Methodology/Approach – The study develops hypotheses using the resource dependency theory. Using content analysis for data generation, this study classifies firms that disclose more versus those that disclose less, using the mean for all firms for each disclosure outcome. Findings – Using logistic regression, the study examines the influence of board size on each disclosure outcome and finds that firms disclosing more tactical internal capital and more strategic human capital have larger boards. Practical Implications – The findings provide insights into how a larger board size can help boards to overcome skill deficiencies in making more discretionary disclosure related to future earnings. Originality/Value – This study analyses the influence of the board size on six aspects of intellectual capital disclosure.

Motivations Behind Human Capital Disclosure in Annual Reports

Abstract Although much has been discussed about voluntary disclosure of human capital in annual reports there has been limited examination of the motivations behind such disclosure. This study uses the perspective of the political economy of accounting to understand motivations. Using the method of content analysis, this paper examines human capital disclosure practices in annual reports of a sample of firms in Sri Lanka, a developing nation. Eleven case study interviews from the sample explore the motivations behind the disclosure practices of firms. Findings reveal that firms use disclosure to reduce tension between firms and their constituents, in the interest of further capital accumulation.

An explanation of human capital disclosure from the resource-based perspective

Though the importance of human capital (HC) in firm value creation is firmly established in the literature the level of emphasis placed on human capital disclosure (HCD) by preparers of financial statements and sell-side analysts is minimal. The purpose of this paper is to address this dilemma by critically analysing the conceptualisation of human capital in disclosure literature and introduce a more germane explanation.

Human capital value creation practices of software and service exporter firms in India

This study explored the human capital (HC) value creation practices of the top seventeen software and service exporter firms in India. The study used HC disclosure attributes as a tool to the contents of the annual reports for the year 2003-04, to evaluate the type and amount of HC disclosed by the software firms. The study conducted semi-structured interviews with the Heads of Human Resources of fourteen software firms to obtain a greater understanding of the similarities between reporting and managed HC practices. The study identified most reported and least reported attributes of HC using content analysis and explained their reporting of value creation using interviews and Resource Based View (RBV). The findings suggest that the HC reporting practices were consistent with interview findings. The frequency of HC attributes reported followed the extent of the management’s perception of HC value creation to the firm.