Abstract:
This research seeks to reduce a gap in the extant literature on the relationship
between audit committee characteristics and intellectual capital disclosure in Sri
Lanka as an example of emerging market. As the internal political climate has
been favourable for after the conclusion of the war, it is important to understand
how audit committee characteristics impact on intellectual capital disclosure in
such an emerging market. This study uses quantitative techniques to assess the
audit committee characteristics and intellectual capital disclosure of Sri Lankan
firms. A 100-firm sample is randomly drawn from the Colombo stock exchange
(CSE)-listed firms. Secondary data for 2016/17 are obtained from the CSE
databases and are used to calculate the audit committee characteristics and
intellectual capital disclosure measures for the sampled firms. The study reveals
that audit committee characteristics such as size, audit committee meetings, audit
independence and financial expertise to be significantly and positively related to
overall intellectual capital disclosure. Findings suggest that Sri Lanka passes
through its post-war-recovery phase, reform of its financial reporting regulatory is
essential to sustain economic growth and development. Sri Lanka build on
regulatory changes and encourage audit committees to ensure the quality of the
overall reporting process to include social, environmental, intellectual as well as
financial capital of firm.
