The Decision Usefulness Of Social Information In Annual Reports Of Public Companies

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. This study attempts to assess the CSD in the financial annual reports of listed companies in China systematically, and explores some of the underlying reasons why corporate social information seems to have a low decision value.Conclusions of theoretical analysis include: (a) Based on Society-Economy Theory, corporate social responsibility is the obligation to upkeep and enhance social benefit besides the maximization of shareholders' benefit. (b) We define six categories which contain detail types of contents based on Chinese reality. (c) Social Information Disclosure Index (SID) is formed.Conclusions of empirical studies include: (a) By using the SID, the statistic date finds that the SID score is generously low and CSD is not sufficient. (b) Using a questionnaire approach, which the users were asked to assess decision value of the CSD, the result indicates that the CSD is a little useful in investment. (c) Using linear regression analysis, this study has examined the relation of the SID and financial index and found that is weak. In conclusion, the CSD of listed companies in China is nearly unuseful. The supply of CSD is unbalanced with the demand.Finally, this paper tries to provide some suggestion of CSD for enhancing the quality and value of social information.