AN INVESTIGATION OF INTELLECTUAL CAPITAL DISCLOSURE IN ANNUAL REPORTS Research Proposal

AN INVESTIGATION OF INTELLECTUAL CAPITAL DISCLOSURE IN ANNUAL REPORTS OF Saudi ARABIA FIRMS - Research Proposal Example Facilitating transformation in the traditional structure of annual reports might prove costly, and therefore the more pragmatic approach is to encourage voluntary IC disclosure in a company’s annual reports. Based on the structural framework and objectives of a company, disclosure depends on corporate governance decision. New approach adopted in presenting the annual reports to the readers should help stakeholders make proper value assessment through the company’s intellectual capital (Li et al., 2008:137). In order to meet the goal of profit maximization through enhanced performance, intellectual resources of an organization play an indispensable role. The problem faced is the paucity of IC related information in the annual reports of the four Saudi Arabian banks that have been selected for this paper. Since IC is not legally mandatory for inclusion in annual reports, this component is also considered as â€Å"unaccounted capital† (Abeysekera & Guthrie, 2005: 151). This paper will focus on intellectual capital disclosure in annual reports of Saudi Arabia firms. The necessity of IC information is steadily gaining importance from profit seeking perspective. While details about financial data and physical factors of products are easily available in annual reports of companies, there is now growing demand for disclosure of IC information (Vandemaele et al., 2005: 417). The objective of this paper is to learn how several banks in Saudi Arabia disclose intellectual capital in their annual reports. Further, this paper will explore the contribution of IC theory in the success and development of an organization. For the purpose of address the research objectives, the research question of this paper is â€Å"To what extent is intellectual capital is represented under different categories in the annual reports of Saudi Arabian banks?† The purpose is to learn how human capital is displayed in four