Chapter 5 Sample characteristics

• Pages: 53-57
• DOI: https://doi.org/10.1108/S1479-3512(2011)0000021013
• Date: 31 December 2010
• Published date: 31 December 2010
• Author: Indra Abeysekera

CHAPTER 5

SAMPLE CHARACTERISTICS

5.1. INTRODUCTION

This chapter describes some of the characteristics of the f‌irms analysed in

this study. Section 5.2 outlines the size of f‌irms, measured by annual revenue

and employee numbers. It then discusses the implications for reporting

entity status, preparing general-purpose f‌inancial reports and annual

reports. Section 5.3 outlines the intellectual capital disclosure signals –

narrative, visual and numerical – and their measurement output. Section 5.4

introduces ownership of equity held by directors in f‌irms and its

implications. Section 5.5 outlines f‌irms’ share ownership and shareholder

distribution. Section 5.6 provides a summary of the chapter.

5.2. FIRM SIZE AND FINANCIAL REPORTING

The size of f‌irms is measured by annual revenue varied from A$821,000 to

175 million in 2005, A$495,000 to 300 million in 2006 and from A$1,360,000

to 161 million in 2007. The size is a determining factor regarding whether or

not a f‌irm should prepare f‌inancial reports, as the Corporation Act 2001

requires disclosing entities, public companies, large proprietary companies

and registered schemes to prepare f‌inancial and directors’ reports. Small

proprietary companies need to prepare the f‌inancial and directors’ reports

to protect shareholders only if they are directed to do so by the court

(Section 293, p. 377) or by ASIC (Section 294, p. 377) (Australian

Corporations and Securities Legislation, 2006).

A f‌irm is classif‌ied as a proprietary company if it satisf‌ies two of the

following criteria (Section 45A (2), p. 135). Firstly, the consolidated gross

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