A can of worms - some problems with the development and application of the concept of corporate social reporting

International financial markets are rapidly becoming a single global market. For these markets, most large institutional users are not satisfied with the existing levels of disclosures by multinational firms. ln Hong Kong, different groups are concerned about disclosure issues. Ms. Cha, Securities and Futures Commission (SFC) executive director in Hong Kong, has stated it was important to adopt international standards as part of the SFC and stock exchange’s commitment to maintaining Hong Kong’s competitiveness. Also a committee of Hong Kong Society of Accountants has recently announced a proposal that was submitted to the society’s council in 1996 that includes changes in corporate govemance disclosure practices for implementation. The purpose of this research study was to seek the views of key individuals about 1) the desirability or certain changes in accounting footnote disclosure practices for financial reporting in the Asia Pacific area and 2) general purposes for disclosures. Accounting academics were selected for the study because these educators will play a critical role in the development of new footnote practices. The situation in Hong Kong is emphasized. but additional information for other countries will be provided for background. A questionnaire is developed to help determine if accounting academics believe changes in required footnote disclosures are needed. ln a recent study, Barth and Murph)/(I994) developed a framework to analyze the required footnotes for companies in the United States. This study uses the purposes identified by the Barth and Murphy US study and the results from other studied to develop the critical issues. ‘ Keywords: Disclosures. Footnotes, Asia Pacific accounting practices