News

Intellectual capital research highlights lack of knowledge


29 August 2007

Professor Guthrie found a wide discrepancy in the level and quality of intellectual capital reporting by Australian and Hong Kong organisations.
Professor Guthrie found a wide discrepancy in the level and quality of intellectual capital reporting by Australian and Hong Kong organisations.

Despite the growth of the knowledge economy there are huge variations in the way organisations report intellectual capital, new research shows.

"For many industries intangible intellectual assets are significant factors driving their business success," said Professor James Guthrie, Chair of the Discipline of Accounting at the University of Sydney.

"It is important that accounting and reporting practices develop to manage and measure these resources and report their value to stakeholders."

Professor Guthrie, who has recently released two ground-breaking reports in this area, found a wide discrepancy in the level and quality of intellectual capital reporting by Australian and Hong Kong organisations.

"A 'stakeholder taskforce', co-ordinated by the accountancy profession, needs to be established to increase awareness about the importance of intellectual capital management and reporting, and to assist the development of reporting policies and guidelines."

In the second study, looking at UK companies, Professor Guthrie found those people compiling intellectual capital reports said annual reports were considered the least effective means of communicating information, with analyst briefings and websites more highly rated.

"This suggests that a significant shift in focus to include all stakeholders, rather than investors only, is required if regulation of intellectual capital reporting is to be successful."

"It was also found that organisations were resistant to regulation on the basis that intellectual capital information was specific to each organisation," he said. While it is clear regulation is required, it must be adaptable to each organisation

These reports in the emerging field of intellectual capital provide much needed information about the way reporting takes place now and the way future practice should be shaped, Professor Guthrie said.

* Note to editors: The reports were carried out for the Institute of Chartered Accountants, Scotland and Institute of Chartered Accountants of England and Wales.


Contact: Kath Kenny

Phone: 02 9351 2261