Abstract:
In the today’s knowledge based economy, intellectual capital (IC) is
considered as a strategic asset which determines the value of the company.
Different practices of disclosing IC information in annual reports that do
not show the real financial position of a company, is a main problem in Sri
Lankan companies. The objective of this study was to find out the impact
of audit committee characteristics on Intellectual Capital Disclosure (ICD)
of listed companies on the Colombo Stock Exchange (CSE) for a period
of five- years from 2012/2013 to 2017/2018. The ICD index comprised
of 30 items in terms of Relational Capital Disclosure (RCD), Structural
Capital Disclosure (SCD) and Human Capital Disclosure (HCD). The data
was analyzed using correlations and regression analysis. Most of the Sri
Lankan Listed companies disclosed ICD in text, sentences, pictures, tables
and graphs in line with the Global Reporting Initiative (GRI) guidelines
in their annual reports. ICD was measured by a disclosure index score.
The independent variables comprised various forms of audit committee
characteristics: audit committee size, frequency of audit committee meetings
and audit committee independence. The study confirms that the size of the
audit committee and audit committee meetings are important attributes to
explain ICD in Sri Lanka. However, the study found a negative significant
relationship between ICD and audit committee independence.
