The influence of full compliance with the Companies Act on the knowledge-creating potential of the directors' report

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Date

Authors

Gouws, Daan G.
Cronje, C.J. (Christo Johannes)

Journal Title

Journal ISSN

Volume Title

Publisher

School of Accounting Sciences, UP

Abstract

Accounting is a complex system, comprising numerous items and transactions that are interrelated in various ways. Management's decisions are reflected in accounting information. The user of accounting information has a real need to comprehend such information in order to make informed decisions. The research reported in this article reveals that when the directors' report fully complies with the letter and context of the Companies Act, it should be used as: a communication tool to enhance comprehensibility; as a mechanism to explain the economic reality of the company; and as a vehicle to reduce the gap between accounting information and the user. It should therefore be used as a knowledge-creating statement, which the various stakeholders of the company can tap into.

Description

Keywords

Directors' report, Knowledge creation, Communication, Comprehensibility

Sustainable Development Goals

Citation

Gouws, DG & Cronjé, CJ 2001, 'The influence of full compliance with the Companies Act on the knowledge-creating potential of the directors' report', Meditari : Research Journal of the School of Accounting Sciences, vol. 9, pp. 155-173. [http://www.meditari.org.za]