3.2 significantly inverse relationship through investigating 403.2 significantly inverse relationship through investigating 40

3.2 Hypotheses Development

3.2.1 Profitability

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In earlier studies reported
mixed results of the relationship between HR disclosure and profitability. For example,
Williams (2001) noticed a significantly inverse relationship through investigating
40 UK companies. Sonnier et al. (2007) reach to similar findings through examining
143 high-tech companies in the US. However Garcia-Meca et al. (2005) and Li et at
(2008) found a significantly positive relationship in spain and UK respectively.
Ahmed (2009), Hossain (1998), Owusu Ansa’ (1998). Inchausti (1997), Raffournier
(1995); Wallace and Nascr (1985) and Wallance(1987)  used Profitability in disclosure studies as independent
variable. Hossain (1998) identified that profitability is capable of influencing
the level of corporate information disclosure. Owusu-Ansah (1998) found that unprofitable
companies are also inclined to release more information to defend their poor performance.Lang
and Lundholni (1993) noted that the influence of a company’s profitability level
on disclosure can he positive, neutral or negative, depending on its performance.
But the study of Belkaoui and Kahl (1978) found a negative relationship between
profitability and level of reporting.

 

H1.     There is a positive association between company’s
profitability and level of disclosure quality.

 

 

3.2.2 Employee Expenses

Jindal et al. (2012) in
their investigation uncover that human capital disclosure Score is decidedly corresponded
with the employee expenses as an extent of their aggregate working expenses. This
basically implies the organizations in which employee expenses constitute a greater
part of operating expenses are the ones which reveal more on the HC front. Other
investigation of Wright and Snell (2005) demonstrated that value in knowledge based
economy can be made by better training, development and retention of the
employees. This improved estimation of firm, with better HR exercises, can’t be
accounted for on the balance sheet. It must be accounted for to its financial
users through HC disclosure. Consequently, HC disclosure should increment with the
expanded measure of spending on workers. With the developing information economy
the employee expenses of the Indian organizations have expanded commonly. Subsequently,
this investigation guesses that the organizations with a more noteworthy extent
of their working expenses put resources into workers’ pay ought to have noteworthy
positive effect on the degree of their HC disclosure quality.

 

H2.    There is
a positive association between company’s employee expenses ratio and level of HR
disclosure quality.

 

3.3 Population and Sample
of the Study

The data collected for the
purpose of the study involves the examination of annual reports for 13 leading garments
industries listed on the Dhaka Stock Exchange three years: 2014, 2015 &
2016. These companies were chosen because these firms are more involve with workers.
The garments sectors which are industrial more involved with workers and labors
and the study concentrated on the abuse of the human rights of the workers as mentioned
in the problem statement. The year 2016 was considered in this study because it
was the latest year when the study is conducted. On the other the 2017 was not included
in the study because annual reports regularly published after June of the following
year.

The annual reports of the
firms selected were examined subsequent to downloading from the respective companies’
official web site. However, one company in garments sector was excluded from the
study due to unavailable information of employee expenses among the period of the
study (2014-2016). Consequently, all the sample firms’ annual reports were examined
in the current study are 12 firms instead of 13 firms. As with other studies
(Ali et al., 2008; Khan & Ali, 2010), the study made a thorough
investigation of the different sections of the annual reports such as vision,
mission and goal statement, chairman’s message, directors’ section, financial statements,
operational review, and other parts enclosing miscellaneous information not
covered by any section. While companies may exercise other medium of communication
for exhibiting HR reporting such as the internet, newspapers, and other media,
this study concentrates on published annual reports of sample companies. The
selection of annual reports is consistent with many other studies (Abeysekera
& Guthrie, 2004; Guthrie & Parker, 1990; Ax & Marton, 2008, Andrews
et al., 1989; Kirkman & Hope, 1992). Furthermore, several prior studies have
documented that users of annual reports demand more and more reliable information
relating to key drivers of future company value creation capabilities (Maines
et al., 2002; Beattie, 2000; Healy & Palepu, 2001; Abeysekera &
Guthrie, 2004).

 

 

3.4
Measurement of Variables

3.4.1
Measurement of Dependent Variable

The study concentrate
on human accounting disclosure which is considered as dependent variable. This
dependent variable was measured as follow.

 

3.4.1.1 Content
Analysis

Content analysis is
used for testing the corporate annual reports with the aim of providing an
overview of intellectual capital reporting practices (Guthrie & Petty, 2000;
Dumay & Cai, 2015). The technique used in content analysis is gathering
data (Abeysekera, 2007), which involves codifying qualitative and quantitative information
into pre-defined categories in order to derive quantitative scales of