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

Vivien Beattie, Sarah Jane Smith*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

51 Citations (Scopus)


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.

Original languageEnglish
Pages (from-to)471-494
Number of pages24
JournalAccounting and Business Research
Issue number5
Publication statusPublished - 2012


  • disclosure theory
  • intellectual capital
  • questionnaire survey
  • voluntary disclosure
  • COST


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