Financial statement informativeness and intellectual capital disclosure

Abstract

Purpose -The purpose of this paper is to analyse the relationship between financial statement informativeness (FSI) and intellectual capital disclosure (ICD). Design/methodology/approach -While FSI was measured as the explanatory power of financial information in explaining market value, ICD was collected through content analysis of annual reports. A sample of 126 US companies, divided into two groups -high-tech and low-tech companies -were used in this study. Empirical analysis was carried out using the Poisson regression method. Findings -The results show a negative (substitutive) relationship between FSI and ICD, especially in high-tech companies. This indicates that companies with low FSI disclose more information about their IC in annual reports. Practical implications -This study confirms the role of voluntary ICD as a solution towards mitigating the problem of the distortion of financial information due to the lack of accounting recognition of IC as an asset in the financial statements. Originality/value -This is the first empirical study to analyse the relationship between FSI and ICD. Therefore, it serves as feedback to the regulators and standard-setters that recently published recommendations on voluntarily disclosing IC.

Factors Affecting the Integrity of Manufacturing Company Financial Statements in Indonesian Stock Exchange and Malaysian Stock Exchange

“…Companies that have good intellectual capital will have an impact on high quality work so that they can produce financial report with good integrity. The results of this study also align with the research of [18] and [11], showing that intellectual capital tested simultaneously between VACE, VAHC, and VASC together has a positive effect on the dependent variable, namely the integrity of financial statements.…”

“…Quality intellectual capital will better understand information management so that reports compiled will have more integrity. [18] in their research revealed that Intellectual capital will have a positive influence on the integrity of financial statements. In line with the research conducted by [14] in airlines in Malaysia, intellectual capital can improve the quality of information in the company's financial statements.…”

Board Structures dan Value-Added Intellectual Capital: Studi Kasus pada Industri Barang Konsumsi dan Perdagangan Indonesia

“…Value creation ini akan mendorong perusahaan untuk melakukan investasi yang cukup besar, sehingga dapat menambah nilai intellectual capital sebuah perusahaan. Maaloul and Zéghal (2015) (Abdoli et al, 2013).…”

Corporate Governance and Intellectual Capital Disclosure: Evidence from the Scandinavian Countries

“…Previous research has established that intellectual capital can be categorised and that the level and the quality of IC disclosure vary across firms and firms from different industries (Maaloul and Zéghal, 2015). The present study differs from the previous studies in terms of the time, data sample, industry type and other contextual factors constructed in the current research paradigm.…”