Browsing by Author "Zuliana binti Zaludin"

At present, many companies in countries around the world such as the United Kingdom, Australia and Denmark are measuring and disclosing IC information in their annual reports. These companies are beginning to realize the importance of IC. However, despite the rapid development in issues of accounting for IC, this field is still considered new in Malaysian companies, as not many Malaysian companies are aware of the development of IC reporting in other countries and the importance of IC reporting. The study has three main objectives. Firstly, to determine the extent of IC disclosure in the annual reports of top Malaysian public listed companies. Secondly, to empirically examine the relationship between the extent of disclosure and firm specific characteristics (i.e. firm size, industry type, leverage and profit). Thirdly, it highlights the IC disclosure of five companies with the highest disclosure percentage. This study adopts the definition of IC by Sveiby (1997), which classifies IC into internal capital, external capital and employee competence. The current research conducted is one way to assess whether businesses realize that IC exists, are able to identify it and make full use of it. Furthermore, if IC really creates additional value for businesses, it should be disclosed in the annual reports, either quantitatively or qualitatively, for the benefit of the users of accounting information, particularly investors. Using regression analysis, there are two significant results which are obtained. First, the highest disclosure is for employee competence, followed by internal capital and external capital. Second, it is evident that firm size and leverage affects the level of IC in the annual report, whereas industry type and profitability do not. This study has contributed to the Malaysian literature on IC disclosure which is currently very limited.