Determinants of the Accounting Disclosure on Intellectual Capital and its Impact on the Financial Performance
Empirical Study on the Listed Egyptian Companies
Dr / Magdy Melegy Abdul Hakim Melegy
Lecturer, Department of Accounting
Faculty of Commerce, Benha University
Abstract:
This study aimed to explore the determinants influ-encing the level of disclosure of accounting for intellectu-al capital (the company's characteristics and mechanisms of governance) and to analyze their impact on the finan-cial performance of the listed Egyptian companies.
To achieve these objectives the study relied on the content analysis technique to examine the annual reports of a number of (137) Company of the listed Egyptian companies during the period (from 2011 to 2013), so as to build two models to measure this effect, the first one:, to measure the impact of the company's characteristics and mechanisms of governance on the level of accounting disclosure for intellectual capital, and the second: to measure the impact of accounting disclosure about the in-tellectual capital on the financial performance. The study used a test correlation and regression to examine the rela-tionship between the variables.
The importance of the study appears in provid-ing useful information to the interested parties in the ac-counting for intellectual capital through an integrated analysis of the determinants affecting this disclosure, and giving evidence from the Egyptian environment for its impact on the financial performance.
The study found a low level of accounting disclo-sure for intellectual capital in the listed Egyptian compa-nies during the study period, it also found that there is a positive and significant relationship between the intellec-tual capital the company's size, industry type, the age of the company, the size of the Audit Office, and the size of the Board of Directors, while there is a negative and sig-nificant relationship with the duplication of the Chief Ex-ecutive Director. On the other hand there is a positive re-lationship but have no significance with the profitability of the company, the concentration of ownership, the inde-pendence of board members, and the quality of audit committees, and there is a negative relationship but with no significance with the degree of operating leverage.
Based on the previous result the study recom-mended the importance of increasing awareness of the companies to the disclose about their intellectual capital elements and the need to adopt the practices of good gov-ernance for its positive role in improving the level of dis-closure, and the need for the issuance of an accounting standard for intellectual capital so that it regulates the its accounting treatment and the constraints on the disclosure about it in the financial statements such that there is no conflict between it and the generally accepted accounting principles.
Keywords: the Company's Characteristics, Corporate Governance, Intellectual Capital, Financial performance, Theories of Accounting Literature.
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