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Intellectual capital reporting: an examination of local government in Victoria

Sciulli, Nick and Wise, Victoria and Demediuk, Peter and Sims, Robert (2002) Intellectual capital reporting: an examination of local government in Victoria. Accounting, accountability and performance, 8 (2). pp. 43-60. ISSN 1445-954X

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Abstract

The objective of this research is to examine how Victorian local government annual reports disclose information on intellectual capital. The idea of intellectual capital has become part of the working organisational vocabulary, and is widely held in management literature to be the pre-eminent economic resource and a key driver of efficiency, effectiveness and continual improvement in the private and public sectors. Under the recent Best Value Victoria policy, local governments are under increasing pressure to acquire and apply intellectual capital to improve responsiveness to community needs and meet cost and quality criteria. Annual reports exist as vehicles for communication, accountability and decision making. This study examines how the internal, external and human categories of intellectual capital are represented in the annual reports for the 2000 year for 77 of the 78 Victorian local governments. Using a matrix approach derived from Petty and Guthrie's (2000) framework, content analysis is employed to examine the incidence and intensity with which specific elements of intellectual capital are reported. This research indicates that generally the content of annual reports have not provided clear and coherent representations of how local government in Victoria are developing, applying and measuring intellectual capital. The nature and extent of intellectual capital reporting varies considerably between councils, and the disclosure of the human elements of intellectual capital is particularly underdeveloped. The findings suggest that more research in this area is needed to determine the extent to which intellectual capital should be disclosed and whether the current paucity of disclosure stems from disinterest or technical problems. There is also the need for further research into the need to identify and describe elements of intellectual capital, and into effective reporting strategies and techniques. This may lead to the development of a 'best practice' reporting model for intellectual capital. Furthermore, the preliminary investigations indicate a perceived need to raise the consciousness of public sector managers as to the existence of intellectual capital within their organisations, and ultimately lead to more informed and effective management of this asset.

Item Type: Article
Uncontrolled Keywords: local government administration, company reports, surveys, Victoria politics and government, personnel, information economy, knowledge theory, disclosure accounting
Subjects: RFCD Classification > 350000 Commerce, Management, Tourism and Services
Faculty/School/Research Centre/Department > School of Accounting
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Depositing User: Ms Phung T Tran
Date Deposited: 12 Jan 2009 02:47
Last Modified: 30 Apr 2012 01:16
URI: http://vuir.vu.edu.au/id/eprint/1280
DOI: 200302704
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