Journal of Information and Knowledge (Formerly SRELS Journal of Information Management)

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Analysis of Annual Report as an Instrument of Intellectual Capital Reporting:A Case Study of Indian Institute of Science


Affiliations
1 National Centre for Science Information, Indian Institute of Science, Bangalore 560 012, India
     

   Subscribe/Renew Journal


Organizations' ability to collect, process and interpret information and transform information into economic value is becoming more and more important. Organizations have been described as using three types of capital: physical capital such as plant, equipment, stock; financial capital such as cash, investments, receivables; and intellectual capital. Intellectual capital (IC) encompasses intangibles such as patents, intellectual property rights, copyrights and franchises. It also includes intellectual material that has been formalized, captured and leveraged to produce higher valued assets. It represents knowledge transformed to something of value to an organization.

Annual reports have been used to investigate the IC reporting practices of business firms, and also to investigate the differences in reporting across firms in different countries. Several such studies have used content analysis as a research technique. Until recently, very few organizations have attempted to measure and assess IC. There are a variety of conceptual frameworks that can be used to classify and record IC. However, all these frameworks concentrate on business firms. In this paper an attempt is made to develop a framework to classify and record IC for academic organizations and also a sample analysis of IC as reported in the annual report is carried out. Indian Institute of Science annual reports are taken as study sample for this purpose.

The study reveals that annual reports of academic institutions can be used as an instrument in inquiring intellectual capital reporting because these institutions commonly signal what they perceive as important through the reporting mechanism. Important issues are featured, reported and discussed, whereas less important items are absent or relegated to low profile sections of the report. However, according to this preliminary study it is observed that studies focusing exclusively on annual reports risk capturing an incomplete picture of the amount of reporting organizations are engaging in, and thus an incomplete picture of the practices they are studying. Hence to get a comprehensive view, other official reports and also recorded information publicly available have to be considered. Content analysis can be used as a research method in capturing the data but to get better results this method has to be combined with other data capture methods such as interview and survey methods. In this preliminary analysis, the framework suggested is only partial and this can be further extended to include other units of analysis depending on the purpose of the study. The framework suggested can be used by other organizations and also to carry out comparative study of different organizations.


Keywords

Intellectual Capital, Intellectual Capital Reporting, Annual Report, Content Analysis.
User
About The Author

K. T. Anuradha
National Centre for Science Information, Indian Institute of Science, Bangalore 560 012
India


Notifications

  • Anuradha (K T) and Gopalan (T K). Trends and patterns in explicit organizational knowledge: Correspondence analysis and Cluster Analysis. International Information and Library Review. Vol 39(3-4); 2007; p247-259.

  • . Design and Development of Institutional Repositories: A case study. International Information and Library Review. Vol. 37(3); 2005; p169-178.

  • Australian Society of CPAs and The Society of Management Accountants of Canada. Knowledge Management: Issues, Practice and Innovation, Australian Society of Certified Practicing Accountants, Melbourne, 1999.

  • Balaram (P). Editorial: The Birth of IISc. Current Science. Vol. 94 (1); 2008; p5-6.

  • Battie (V) and Jones (M J). A comparative study of use of financial graphs in the corporate annual reports of major US and UK companies. Journal of International Financial Management and Accounting. Vol. 8(1); 1997; p61.

  • Brennan (N). Reporting Intellectual Capital in Annual Reports: Evidence from Ireland. Accounting, Auditing and Accountability Journal. Vol 14(4); 2001; p423-436.

  • Booth (R). The Measurement of Intellectual Capital. Management Accounting. Vol. 76(10); 1998; p26-28.

  • Bornemann (M); Knapp (A); Schneider (U) and Sixl (K L). Holistic measurement of Intellectual Capital. Paper presented In International Symposium on Measuring and Reporting Intellectual Capital: Experiences, Issues and Prospects Amsterdam. June 1999, p9-10.

  • Cowen (S); Ferreri (L B) and Parker (L D). The impact of corporate characteristics on social responsibility disclosure: a typology and frequency-based analysis. Accounting, Organisations and Society. Vol. 12(2); 1987; p111-22.

  • Deegan (C) and Gordon (B). A study of environmental disclosures practices of Australian corporations. Accounting and Business Research. Vol. 26(3); 1996; p187-99.

  • Gray (R H); Kouhy (R) and Lavers (S). Corporate and social environmental reporting: a review of the literature and a longitudinal study of UK disclosure. Accounting, Auditing & Accountability Journal. Vol. 8(2); 1995a;, p 44-77.

  • ; and . Constructing a research database of social and environmental reporting by UK companies: a methodological note. Accounting, Auditing & Accountability Journal. Vol. 8(2); 1995b; p78-101.

  • Guthrie (J); Petty (R); Yongvanich (K) and Ricceri (F). Using content analysis as a research method to inquire into intellectual capital reporting. Journal of Intellectual Capital. Vol. 5(2); 2004; p282-93.

  • . The management, measuring and reporting of Intellectual Capital. Journal of Intellectual Capital. Vol. 2(1); 2001; p27-41.

  • and Petty (R). Intellectual Capital: Australian annual reporting practices, Journal of Intellectual Practices. Vol. 1(3); 2000; p241-253.

  • Guthrie (J) and Parker (L D). Corporate social disclosure practice: a comparative international analysis. Advances in Public Interest Accounting. Vol. 3; 1990; p159-75.

  • Mathews, (M R). Corporate social accounting in Australasia. Research in Corporate Social Performance and Policy. Vol. 7; 1985; p251-77.

  • ; Petty (R) and Ricceri (F). External intellectual capital reporting. Research monograph, The Institute of Chartered Accountants of Scotland, forthcoming, 2004.

  • Hackston (D) and Milne (M G). Some determinants of social and environment disclosures in New Zealand companies. Accounting and Auditing and Accountability Journal. Vol. 9(9); 1996; p77-108.

  • ICAEW. New Reporting Models for Business, Institute of Chartered Accountants in England and Wales, London, 2004.

  • Indian Institute of Science. Annual Report 2006-2007: Preface. 2007, pi-ii

  • Klien (D A) and Prusak (L) Characterizing Intellectual Capital, Centre for Business Innovation. Ernst and Young LLP, Cambridge, MA, Working Paper, March 1994.

  • Krippendorff (K). Content Analysis: An Introduction to Its Methodology, The Sage CommText Series, Sage, Beverly Hills, CA, 2nd Edition, 2004.

  • Lee (T). The changing form of the corporate annual report. The Accounting Historians Journal. Vol. 21(1); 1994 June; p215-32.

  • Lynn (B). Intellectual Capital. CMC Management. Vol. 72(1); 1998; p10-15.

  • Marino (A Jr). Separating your annual report from the herd. Public Relations Quarterly. Vol 40(2); 1995; p44- 47.

  • McKinstry (S). Designing the annual reports of Burton plc from 1930 to 1994. Accounting, Organizations and Society. Vol. 21(1); 1996; p89-111.

  • Neu (D); Warsame (H) and Pedwell (K). Managing public impressions: environmental disclosures in annual reports. Accounting, Organizations and Society. Vol. 23(3); 1998; p265-82.

  • Olsson (B). Annual reporting practices: information about human resources in corporate annual reports in major Swedish companies. Journal of Human Resource Costing and Accounting. Vol. 6(1); 2001; p39-52.

  • Parker (L). Social and environmental accountability research: a view from the commentary box. Accounting, Auditing & Accountability Journal. Vol. 18(6); 2005; p842-60.

  • Roberts (C B). Environmental disclosures: a note on reporting practices in Mainland Europe. Accounting Auditing & Accountability Journal. Vol 4(3); 1991; p62-71.

  • Roberts (R W). Determinants of corporate social responsibility disclosure: an application of stakeholder theory. Accounting, Organizations and Society. Vol. 17(6); 1992; p595-612.

  • Robertson (D C) and Nicholson (N). Expression of corporate social responsibility in UK firms. Journal of Business Ethics. Vol. 15; October 1996; p1095-106.

  • Roos (J); Ross (G); Dragonetti (N C) and Edvinsonn (L). Intellectual Capital. Macmillan Business, London, 1997.

  • Stanton (P) and Stanton (J). Corporate Annual Reports: Research perspective used. Accounting Auditing & Accountability Journal. Vol. 15(4); 2002; p478-500.

  • ; and Pires (G). Impressions of an annual report: an experimental study. Corporate Communications: An International Journal. Vol. 9(1); 2004; p57-69

  • Sveiby (K E). The New Organizational Wealth: Managing and Measuring Knowledge-Based Assets, Berrett- Koehler, San Francisco, CA, 1997.

  • Uma Jagannath. An analysis of obsolescence in Library Collections: A case study of Academic Libraries. PhD thesis submitted to Bangalore University, Guided by Prof. Gopinath, M.A. and Dr.Kemparaju, T.D., 2001.

  • Weber (R P). Basic Content Analysis: Quantitative Application in the Social Sciences, The Sage CommText Series, Sage, Beverly Hills, CA, 1985.

  • Zeghal (D) and Ahmed (S A). Comparison of social responsibility information disclosure media used by Canadian firms. Accounting, Auditing & Accountability Journal. Vol. 3(1); 1990; p38-53.

  • Zeghal and Sadrudin. Comparison of social responsibility information disclosure media used by Canadian firms. Accounting, Accountability & Auditing Journal. Vol. 3(1); 1990; p38-53.


Abstract Views: 317

PDF Views: 11




  • Analysis of Annual Report as an Instrument of Intellectual Capital Reporting:A Case Study of Indian Institute of Science

Abstract Views: 317  |  PDF Views: 11

Authors

K. T. Anuradha
National Centre for Science Information, Indian Institute of Science, Bangalore 560 012, India

Abstract


Organizations' ability to collect, process and interpret information and transform information into economic value is becoming more and more important. Organizations have been described as using three types of capital: physical capital such as plant, equipment, stock; financial capital such as cash, investments, receivables; and intellectual capital. Intellectual capital (IC) encompasses intangibles such as patents, intellectual property rights, copyrights and franchises. It also includes intellectual material that has been formalized, captured and leveraged to produce higher valued assets. It represents knowledge transformed to something of value to an organization.

Annual reports have been used to investigate the IC reporting practices of business firms, and also to investigate the differences in reporting across firms in different countries. Several such studies have used content analysis as a research technique. Until recently, very few organizations have attempted to measure and assess IC. There are a variety of conceptual frameworks that can be used to classify and record IC. However, all these frameworks concentrate on business firms. In this paper an attempt is made to develop a framework to classify and record IC for academic organizations and also a sample analysis of IC as reported in the annual report is carried out. Indian Institute of Science annual reports are taken as study sample for this purpose.

The study reveals that annual reports of academic institutions can be used as an instrument in inquiring intellectual capital reporting because these institutions commonly signal what they perceive as important through the reporting mechanism. Important issues are featured, reported and discussed, whereas less important items are absent or relegated to low profile sections of the report. However, according to this preliminary study it is observed that studies focusing exclusively on annual reports risk capturing an incomplete picture of the amount of reporting organizations are engaging in, and thus an incomplete picture of the practices they are studying. Hence to get a comprehensive view, other official reports and also recorded information publicly available have to be considered. Content analysis can be used as a research method in capturing the data but to get better results this method has to be combined with other data capture methods such as interview and survey methods. In this preliminary analysis, the framework suggested is only partial and this can be further extended to include other units of analysis depending on the purpose of the study. The framework suggested can be used by other organizations and also to carry out comparative study of different organizations.


Keywords


Intellectual Capital, Intellectual Capital Reporting, Annual Report, Content Analysis.

References