The Decision Value Of Corporate Social Information

Increased public concern with corporate social responsibility may have implications for the need of corporate social disclosure (CSD). The usefulness of social information has provided the focal point for much social accounting research activity. But the users (stakeholders) are likely to be almost entirely uninterested in corporate social information released in corporate financial annual reports. This study attempts to assess the CSDs in the financial annual reports of listed companies in China systematically, and explore some of the underlying reasons why corporate social information seems to have a low decision value.Conclusions of theoretical and context analysis include: (a) The underlying reason why CSDs are of little use in decisions making is that the social information provision is inconsistent with users' decision models. (b) Corporations only response to strong stakeholders is the intrinsic motivate factor of providing the social information. (c) Lack of legal requirement, regulation or mandatory reporting standards causes the lack of CSD quality which is the direct reason of low decision value of social information. (d) Corporation moral development and regulatory legislation for CSD is a way to raise the quality and decision value of the corporate social information.Conclusions of empirical studies include: (a) By using the framework of information quality characteristics (18 dimensions), the content analysis of corporate annual reports finds that the quality and decision value of social information are lower. (b) Using a questionnaire approach, the professionals were asked to assess decision value and public relations value of the contents of the annual reports, the result indicates that both the decision and public relations value are lower. (c) Using linear regression analysis, this study has examined the usefulness of social information in investment decision-making and found the social information had no use. The results of these empirical studies are consistent.Finally, this paper tries to provide a suggestion of CSD regulatory framework for enhancing social information quality and value.The innovations of this study are the perspective of theoretical analysis, the improving of traditional methods and the use of new data.