Evaluating disclosure theory using the views of UK finance directors in the intellectual capital context

Beattie, V. and Smith, S.J. (2012) Evaluating disclosure theory using the views of UK finance directors in the intellectual capital context. Accounting and Business Research, 42(5), pp. 471-494. (doi: 10.1080/00014788.2012.668468)

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Abstract

In contrast to most prior research in this area, which focuses on actual disclosures, this study uses a large-scale direct method to investigate the factors that a key preparer group believes influence intellectual capital (IC) disclosure decisions. IC disclosures are typically characterised by uncertainty of interpretation and high levels of commercial sensitivity. A questionnaire elicits 93 UK-listed company finance directors' views regarding the influences on these decisions. Results are used to evaluate the relative explanatory power of several theoretical and practical reasons for disclosure. Strongest support is found for competitive disadvantage and capital market considerations. Issues related to legitimacy theory, stakeholder theory and other economic disclosure costs also feature. Factor analysis reduces the set of 28 incentives and disincentives to 10 uncorrelated dimensions, indicating that a broad and complex set of overlapping factors affect the disclosure decision. The importance of disclosure incentives and disincentives is found to vary both within and between disclosure topics, which may explain the variation in findings in prior research.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Beattie, Prof Vivien
Authors: Beattie, V., and Smith, S.J.
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Journal Name:Accounting and Business Research
Publisher:Institute of Chartered Accountants in England and Wales
ISSN:0001-4788
Published Online:01 May 2012

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