CHINHOYI UNIVERSITY OF TECHNOLOGY

SCHOOL OF BUSINESS SCIENCE AND MANAGEMENT

BACHELOR OF SCIENCE HONOURS DEGREE IN ACCOUNTANCY
The relationship between corporate performance and social accounting disclosure practices
in Zimbabwe
A dissertation by
DUMISANI .T KUMBANA
(C108683M)
A Dissertation Submitted to the School of Business Sciences and Management in Partial
Fulfillment of the Requirements for the Award of a Bachelor of Science Honors Degree in
Accountancy
Supervisor: Mr Hosho

CHAPTER I: Introduction
This chapter will give an introduction of the background of the study and the statement of the
problem. It will also highlight the objectives of the study and its significance, research questions,
hypothesis, assumptions of the study and the scope of the research. The chapter will end with the
definition of unique terms and a summary of the chapter.
1.0 Background
Social accounting disclosure is necessary world over leads it because leads to better
performance through transparency hence have lower finance costs, attract and retain talented
employees and e more successful. (European Union (EU) Memo in Brussels April 2013.
In Germany, public companies must provide a breakdown of total earnings of each member of
the management board in terms of executives remuneration.(Federal Ministry of Justice
Germany 2009).In Australia previous disclosures of executives earnings were in bands over
$100 000 but currently as part of the Corporate Law Economic Reform Program actual
remuneration packages of individual directors and 5 highest paid executives are disclosed.
Global reporting initiative has pioneered and developed a sustainability reporting framework
used around the world to make sustainability reporting standard practice for all organizations, the
framework provides metrics and methods for measuring and reporting sustainability related
impacts and performance.
In developed and developing countries over the last 2 decades sustainability reporting have
increased (KPMG 2008: GRI 2010) with large number of sustainability reports from Europe
45%, America 28%, Asia 20%, Oceania 4% and Africa 3% (GRI 2010).
On the 16th of April 2013 the European Union (EU) adopted a directive so as to enhance
transparency on large certain companies on social and environmental matters.
Most previous researches have concluded that corporate social responsibility disclosure is an
important factor in improving performance for corporate (McWilliams and Siegel 2000, Husted
and Allen 20000.

Other researchers have reached no consensus on the relationship between these variables. Recent
work has reviewed seven earlier empirical studies and concluded that economic performance is
not directly linked in either a positive or negative way to social responsiveness (Arlow and
Gannoon 1982 p.240) which is in contrast with Brammer and Millington (2008) who concluded
that firms with high and low social disclosure level have higher financial performance. In the
short term firms with poor social disclosure do well and in the long term those with good social
disclosure perform better.
Through disclosure of transparent information on social and environmental matters over time
companies will benefit through better performance and relations with consumers and
stakeholders(European Commission Memo 13/336 16/04/2013). Low cost of capital will be
attained through helping investors and creditors understand economic risk of investment (Robert
K. Elliot and Peter D.Jacobson, Cost and Benefit of Business Disclosure p.81)
Other benefits accrue to investors of making informed investment decision processes, the
society will see that companies will be managing the environment and social challenges in a
more accountable way and the economy as a whole through investments.(European
Commission Memo 13/336 16/04/2013)
1.1 Statement of the Problem
The growing concern for social accounting disclosure and the importance of communication
between the organization and stakeholders has led to firms becoming more committed, however
it is not yet clear whether companies in Zimbabwe understand the importance of social
accounting disclosure in their annual reports. This led to this research study. Is there a link
between corporate performance and social accounting disclosure practices in the Zimbabwe
Stock Exchange listed companies.
1.2 Research Objectives

To ascertain the social accounting issues currently disclosed in the annual reports of
Zimbabwe Stock Exchange listed companies (ZSE)

To assess the corporate performance of companies listed on the Zimbabwe Stock

Exchange

To determine the extent to which corporate performance impacts on social accounting

disclosure practices in ZSE listed companies.

1.3 Research Questions

What are the social accounting issues currently disclosed in the annual reports of
Zimbabwe Stock Exchange listed companies?

How are Zimbabwe Stock Exchange companies performing?

What is the extent to which corporate performance impacts on social accounting

disclosure practices in Zimbabwe Stock Exchange listed companies?

1.4 Hypothesis
In order to achieve the objective o the study, the following hypothesis is stated is null form
H1: There is no relationship between corporate performance and social accounting disclosures
practices in Zimbabwe.
1.5 Significance of the study
The study is going to be done in partial fulfillment of a Bachelor of Science Honours Degree in
Accountancy and different stakeholders will benefit from it.
1.5.1 Gain to the researcher

The researcher will acquire research skills and broaden his knowledge on the subject of
the study.

The research will also give a platform for the researcher to link theory learnt to practice.

The study will give the researcher a dipper and comprehensive knowledge of the
importance of corporate social responsibility and disclosure practices.

1.5.2 Gain to the University.

The study will be used by the institution as a guide in future researches on the same field
of the study as it adds to the existing body of knowledge.

1.5.3 Gain to the public/society

If the findings of this study are positive, the society will benefit from large companies
managing the environment and social challenges in a more effective and accountable
way.

1.6 Assumptions
The research was based on the following assumptions:
The research would be successful in that information necessary was made available on
time and in earnest.
It was also assumed that the questionnaires issued were easy to understand and were
completed and returned on time.
The researcher assumed that there would be enough funds carry out the research.
1.7 Delimitation
The study will be limited to companies listed on the Zimbabwe Stock Exchange only and will be
confined only to Harare. The research is focused on the relationship between corporate
performance and social accounting disclosure practices and will use company profitability to
measure performance from 31 March 2011 to 31 March 2013.
1.7.1 Limitation

Time constraint-The research is done in a limited space of time. There is need for the
researcher to work around the clock to see to it that the project is done in limited time he
has so that he submits it in time.

Lack of cooperation from management and company officials in providing relevant and
reliable information to the student. To combust this the student have to resort to interview

techniques whereby he gets information right from the source through a series of
questions prepared.

Respondents might not have a good understanding of corporate performance in relation to

social accounting disclosure practices. The researcher should aim his research towards
scholars who have a good understanding of the topic under study.

Confidentiality-some respondents may feel that they should not disclose some of the
information they may consider pertinent to the subject for fear of victimisation, therefore
the researcher shall use secondary data, and other sources of information such as from
questionnaires and interviews.

1.8 Definition of Terms

Social accounting Social accounting is accounting similar to traditional accounting, it is a
method of quantifying a companys performance using social and environmental effects. It is
also the identification and recording of business activities regarding social responsibility.
Remuneration- Payment or compensation received for services or employment. This includes
the base salary and any bonuses or other economic benefits that an employee or executive
receives during employment.
Stakeholder- A person, group or organization that has interest or concern in an organization and
can affect or be affected by the organization's actions, objectives and policies for example
creditors, directors, employees, government (and its agencies), owners (shareholders), suppliers,
unions, and the community from which the business draws its resources.
Environmental accounting- The ability to provide accurate information in the financial
statements regarding the estimated social cost occasioned by the production externalities on
the environment and how much deliberate intervention cost had been incurred to bridge the
gap between the marginal social cost and the marginal private cost by a firm.
1.9 Chapter summary
The chapter created the framework of the study by outlining a comprehensive background of the
study, statement of the problem which prompted the research on the relationship between

corporate performance and social accounting disclosure practices. The objectives of the study the
delimitations and limitations of the study and significance of the study to different stakeholders
were also discussed in this chapter.

Chapter II: Literature Review

2.0 Introduction
This seeks to give a clear understanding of the study through what other authors have written
about the corporate performance of a firm and social accounting disclosure. Taylor and Procter
(2005) define literature review as an account of what has been published on a topic by other

accredited scholars and researchers. In line with this, the researcher examines the related
information on the topic under study. The purpose of literature review is to review knowledge
and understandings related to the subject matter.
2.1 Theoretical Review
2.1.1 Social Accounting
Social accounting is the process of communicating the social and environmental effects of
organisations economic action to particular interest groups within the society and to society at
large hence it involves extending the accountability of organisation (companies) beyond
traditional role of providing a financial account to the owners of capital in particular
shareholders. Such an extension is predicted to upon the assumption that companies do have a
wider responsibility than simply to make money for their shareholders (Gray et al 1995 p3).
It takes different forms reflected in a variety of names which includes social responsibility
accounting, corporate social reporting, social audits, employee and employment reporting and
stakeholder dialogue reporting. Gray 2002 calumniated that social accounting is not an
established part of accounting practice nor has it been adopted by any of the different branches of
the alternative project, However within the last 30 years social accounting has been the major
growth areas in accounting Gray 2001. It has became the focus of most accountants and
accounting academics Gray et al 1995; ODwye et al 2005; Gray 2001. These scholars noted its
importance in the business context in developed countries for example Deegan and Rankin 1996;
Gray et al 1995; Guthrine and Mathews 1985; Hackston and Milne 1996 and in develoing
countries Aba-Baka and Naser 2000; Imarn 2000; Mashat, A.A-2005 hence stakeholders noted
that social problem may be addressed to some extend by measuring , identifying and valuing the
effects of business on the environment and society (Mathews 1997).
To a lesser extend social accounting considers extending disclosure into non-traditional areas like
information about employer, community service and reduction of pollution. The term social
accounting is also used to describe accounting that takes into account externalities. It is now
emerging in private firms though researchers says public sector firms are more likely to be
evaluated using it. Stakeholders call for business on society Gallhofer and Haslam 2003 as cited
in Katula 2007 p168. Hence has led to accountability by organisations to extend to the public at

large (Gray et al 1997; Rob et al 1996 ). Social accounting enables accounting to participate in
the welfare of the society.
Gray (2001) focused on 3 aspects of social accounting namely social audit, silent social account
and the new wave of social accounting. Mathews divided it into 4 categories namely social
indictors accounting used for measuring social events in terms of setting objectives and assessing
the extend over which it can be attained over the long term, Secondly social responsibility
accounting used to disclose non-financial and financial, qualitative and quantitative information
on firms activities in reports. The third aspect is socio-economic accounting used to evaluate
publicly funded activities. It uses both financial and non financial information in evaluating and
finally total impact accounting which shows the negative effects of the organisation on the
environment.
Social accounting was seen as a concern with community, employee, consumers and
environmental issues. Involvement with other countries is also added. Whilst social reporting has
taken very many different forms the dominant form has been the reporting of social information
by organisations and companies through annual reports. Such reporting is either mandatory or
voluntary.
2.1.2 Social Accounting Disclosure
It has received immense attention in the academics and business organisations Gray et al (1995).
The disclosure includes provision of information on human resource aspects, products and
services, involvement in community activities and environmental reporting. A cleaner
environment and a better society for instance is regarded whereby companies decide voluntary
(European Commission 2001).
Though Gray Kough and Lavas (1995) considers corporate social disclosure as being the subject
of substantial accounting research, it lacks a coherent theoretical framework. Since the 1990s
they have been significant growth in environmental and social auditing and reporting Gray
(2000). The explanation is not only unconnected with business desire to create and maintain their
societal legitimacy. The legitimacy theory is the more probable explanation for the increase in
environmental disclosures since the early 1980s (ODonovan 2002). Other researchers who have
agreed to this theory are ODonovan (1999), Walden and Shwark (1997), Gray et al (1995a),

Wilmshurst and Frost (2001), Other theories that provide a social theoretical foundation to
substantiate the value of social accounting research and by extension their disclosure includes the
stakeholder theory (Guthrine and Parker (1990), Roberts (1992), Gray et al (1998a). The
legitimacy theory is a wide value system centre.
Corporate disclosures provide a firm the opportunity to spread value information mainly to
financial stakeholders as stock analysts, capital markets and institutional investors get evaluated
on its financial measures.
Despite the necessity for disclosures on social and environmental issues, there has been a
variety of factors, which may affect either positively or negatively firms to provide these reports.
Firms size and the characteristics of industry seem to play the most important role in the
disclosure of environmental issues, according to many studies (Da Silva Monteiro and AibarGuzmn 2009, Brammer and Pavelin 2008,).
2.1.3 Global Reporting Initiative (GRI)
Global Reporting Initiative (GRI) is the most widely used. They were founded in 1997 by the
Coalition for Environmentally Responsible Economies (CERES) and the United Nations
Environmental Programme (UNEP). The current version of the guidelines (GRI-G3) was
published in 2006. GRI provides indicators to companies in order to measure and report their
economic, social and environmental performance. GRI guidelines were selected by Adams
(2004) because of their high international profile and influence. Samy et al (2010) used the GRI
guidelines in their research pointing out that GRI is an attempt to overcome possible problems
for companies that may occur using other measurement standards.
Moreover their opinion is granted on the perception of WBCSD which face GRI as widely
acceptable reporting guidelines. GRI guidelines could become a mean of evaluation for
investment decision as shareholders will be able to understand past performance and future
objectives (Willis, 2003). Schadewitz and European Research Studies, Vol XIII, Issue (4), 2010
Niskala (2010) shared the opinion that companies may obtain higher stock returns if they apply
GRI guidelines, something that is reassured by their research.

GRI has been an object of research in many studies either as a measure of corporate social
responsibility measurement (Panayiotou et al 2009a) or as a way for qualitative evaluation of
sustainability reporting (Stiller and Daub 2007, Skouloudis et al 2009, Skouloudis et al 2010,
Gallego 2006, Tagesson et al 2009,Mio 2009, Clarkson et al 2008, Sutantoputra 2009).
According to all above, GRI reporting can be used as a tool for research in corporate social
responsibility practices, providing strict guidelines and a wide variety of issues for evaluation on
the economic, social and environmental field. The use of GRI guidelines as an instrument in
order to measure CSR practices is justified by the research of Gjlberg (2009).
2.2 Empirical Review
Objective 1
Research Paper 1
Author : Uwuigbe, Uwalowa and Olayinka Marte Uadiola (February 2011)
Aim
The study was an investigation of the level of social environment disclosure amongst listed
companies in the brewery and building material industry in Nigeria.
Method
As secondary source of data the researcher adopted corporate annual reports of firms because
annual reports are readily available and accessible. Period under review was the 2004-2008 due
to heightened interest in that time. To measure social environmental disclosure in annual reports
the researcher used the content analysis method for data analysis (Ng 1985, Milne and Adler
1999).
Findings
Descriptive analysis reveals that on average all the sampled firms from the selected industries
have some form of corporate social environmental information disclosed in annual reports and
disclosure was comparably higher in brewery industry than building material industry.
Research Paper 2

Author : Appah Ebiomobowa (20 August 2011)

Aim
The study examines the practice of social accounting disclosure in Nigerian companies.
Method
Sample and source of data -A unit of 40 companies from 8 sectors in the Nigerian Stock
Exchange for the period 2005-2007. Corporate social disclosure in annual reports was examined
using convenience sampling of the population. A total of 120 annual reports were used for this
study while content analysis method was used to measure social accounting disclosure. The
researcher used descriptive analysis technique to analyse data gathered.
Findings
The main results were that 33 companies, 82.5% from various industry grouping made social
accounting disclosure at least for a year in their annual reports. Chemical, paint, construction and
petroleum marketing had 100% social accounting disclosure of information. Breweries 66.7%,
building materials 75%, food and tobacco 80%, healthcare 83.3% level of disclosure from 20052007 therefore it was concluded that they is a growing concern for companies reporting social
performance in their financial statements.

Research Paper 3
Author : France Maphosa (1997)
Aim
An analysis if corporate reports give more attention to financial issues than social issues.
Method
All 63 companies listed on the Zimbabwean Stock Exchange were contacted by mail and asked
for their copies of annual reports for 1995-1996 financial year. Content analysis technique was
used in social research on annual reports.

Main Results
Of the 63 companies contacted 41 sent their annual reports. The analysis of Zimbabwe corporate
reports indicates that financial issues receive detailed coverage with little mention of social
issues. Social issues took up between two lines to a page of the whole annual report.
Research Paper 4
Author : Nongooch Kuasirikun and Michad Sherer (2004)
Aim
A survey carried out on Thailand companies annual reports to ascertain corporate social reporting
in Thailand.
Method
Content analysis method of corporate reports was used to identify the characteristics of corporate
social responsibility and environmental disclosure.
Main Results
The most disclosed subject in Thailand corporate annual reports is employee information like in
the UK, US and Australia while community involvement was the second most reported social
disclosure in the UK, US and Australia and environmental information is the second most
disclosed in Thailand annual reports.
Research Paper 5
Author : Shujie Yao, Jianling Wang and Ling Song (July 2011)
Aim
The paper aimed to identify the determinants of corporate social responsibility disclosure in
China listed companies on the Shanghai Stock Exchange in 2008 and 2009.
Method

The key methodology was to develop a multivariate model to test the hypothesis and identify key
determinants in corporate social responsibility disclosure. The content analysis method approach
was also used.
Findings
It was found that corporate social responsibility disclosure is positively associated with firm size,
media exposure, share ownership concentration and institutional shareholding. In addition
companies in environmentally sensitive industries tend to disclose more information.
Researcher Paper 6
Author : Mohammed Hossain (2008)
Aim
An empirical investigation of the extent of both mandatory and voluntary disclosure in listed
banking companies in India.
Method
The sample is the banking sector of India. The bank companies were 38 as of 2004. The
researcher wanted to determine the level of disclosure using both a weighted disclosure index
and an un-weighted disclosure interest.
Main Results
The main results were that India has achieved the highest standard of disclosure practices
especially in mandatory disclosure and has made some progress in voluntary disclosure.
Voluntary disclosure was not as high as mandatory disclosure.
Research Paper 7
Author : Shahed Iman (2000)
Aim

To examine areas of corporate social and environmental accounting and reporting and assess the
position of corporate social performance reporting in Bangladesh.
Method
The method consists of two parts which are a survey of the literature on corporate social and
environmental disclosure, a survey of the actual reporting practices of 40 listed companies of the
Dhaka Stock Exchange.
Main Results
The listed companies in Bangladesh place greater emphasis on human resource disclosure and
still provide relatively low level disclosure on environmental impact. Most of Bangladesh
companies have not welcomed the environmental reporting practices as yet. Only a few
enlightened companies started the practice but their level of disclosure is very poor (Ahmed
1998).
Research Paper 8
Author : Mamman (2004)
Aim
A study of the social accounting information disclosed in financial statements by companies
listed on the Nigerian Stock Exchange.
Method
The content analysis method was used on financial statements of 30 listed companies in the
Nigerian Stock Exchange in 2002.
Main Results
There was a growing tendency of firms reporting information on social performance in their
financial statements. The dominant area of social accounting disclosure was human resource and
the next area was environmental contribution.
Research Paper 9

Author : Jamil et al (2003)

Aim
To examine the disclosure level of social accounting information and what have been disclosed
in annual reports of Malaysian companies.
Method
The research method used was the content analysis technique. A total of 100 companies for the
period 1995-1999 were used with a total of 500 annual reports being gathered.
Main Findings
The disclosure level in Malaysia was considered low whereby less than 30% of companies
studied made disclosures. Companies in Malaysia prefer to disclose social accounting in their
chairmans statements, financial statements and Directors report in form of narrative information.
Human resources, community involvement and environmental information were identified as the
most popular disclosures.
Objective 2
Research Paper 1
Author : Peter A Stanwick and Sara D Stanwick (1998)
Aim
To examine corporate social performance and financial performance
Method
The sample were firms listed on Fortune Corporation Reputation index, firms listed in the top
500 companies of pollution and information for profitability and sales from Fortune 500 listing.
Financial performance was based on level of profitability (Owen, Ferreri and Parker 1987)
Main Results

The main results show that a stronger relationship between financial performance and corporate
social performance exists.
Research Paper 2
Author : Marc Orlitzky, Frank L. Schmidt, Sara L. Rynes (2003)
Aim
A study of the relationship between corporate social or environmental performance and corporate
financial performance. The researcher looks to further the research because the current evidence
is too fractured or too variable to draw any generalisable conclusion
Method
The researcher uses the meta analysis technique which was Hunter and Schmidts (1990)
statistical aggregation technique for cumulating correlations and correcting for various study
artefacts in order to estimate the true score correlation.
Main Results
The meta analysis has shown that across studies corporate social performance is positively
correlated with corporate financial performance, the relationship tend to be bidirectional and
simultaneous and reputation appears to be an important mediator of the relationship.

Research Paper 3
Author : Ahmal R and K Courtis (1999)
Problem
The growing concern for corporate social responsibility disclosure and its importance of
communication between an organisation and its stakeholders has led firms to become more
committed responsible to shareholders. The concern about how corporate social responsibility
disclosure positively and negatively affects shareholders perceptions has forced large companies
to consider not only their financial performance but also environmental and social performance.

The firms has becomes interested in annual reports that contain social activities hence leading to
this study to research if they is a relationship between the two.
Method
The study utilised different methods to achieve objectives. It employed a triangulation approach
approach. This study uses content analysis questionnaires and interviews (qualitative and
quantitative). Interviews were used to attempt to comprehend the nature of the relationship
between the variables. The population included 135 Libyan organisations across four different
industries. Annual reports of 2002-2009 were chosen for this study because they were used to
examine captured data by the by annual reports like descriptive statistics, correlation analysis and
regression analysis.
Findings
Perceptions, opinions and attitudes of financial managers and information managers towards the
importance of corporate social responsibility disclosure were examined. The review of the
managers perspective on the relationship between corporate social responsibility disclosure and
organisational performance indicates that there is a positive relationship. This means that the
level of corporate social responsibility disclosure plays a key role in order to improve a
companys performance. The results shows that there is a growing support for corporate social
responsibility disclosure and its importance of communication between company and its
stakeholders.
Research Paper 4
Author : Mustaruddin Saleha , Norhayah Zulkifli, Rusnah Muhamad
Aim
The study attempts to address the question of whether corporate social responsibility is linked to
financial performance.
Method

The longitudinal data analysis method was used to address the question. Initial sample consists
200 largest companies which are taken out of 499 companies listed on the main board of Bursa
Malaysia. Data is from the period 2000-2005.
Findings
The result confirms that there was limited evidence of a significant effect of the corporate social
responsibility on financial performance in the long-term.
Research Paper 5
Author : Theofanis Karagiorgos (2010)
Aim
The study is an attempt to explore the relationship of corporate social responsibility and firms
financial performance in Greek firms
Method
Based on the stakeholder theory and mainly on the theory of good the researcher try to find out if
an improvement in the corporate social responsibility action results in higher returns. The
empirical analysis was used to test if there was an impact on stock returns using voluntary
disclosure.

Findings
The main results of the study were that there were a positive correlation among stock returns and
corporate social performance in Greek companies and managers should implement corporate
social responsibility action to improve performance.
Objective 3
Research Paper 1

Author : Margarita Tsoutsoura (March 2004)

Aim
The study explores and tests the sign of the relationship between corporate social responsibility
and financial performance.
Method
Two measures were employed to measure corporate social responsibility namely the KLD rating
data and the Domini 400 Social I index. Financial performance was measured using accounting
variables like the return on assets, return on equity and return on sales. The source of data was
the compustat database using firms in the S and P 500 index for 1996-2000.
Main Results
The study indicates that the sign of the relationship is positive which supports those studies that
found a positive linkage in previous researches (Waddock and Graves 1997,McGuire 1998).
Research Paper 2
Author : Ronald M. Roman, Sefa Hayibor and Bradley R. Agle (1999)
Aim
The study was a search for the link between corporate social performance and corporate financial
performance.

Method
The researcher started by gathering all the articles included in the Griffin and Mahon (1997)
table. Each article was independently viewed by the authors and categorised according to the
positive, negative and no effect established by Griffin and Mahon. They took the results of the
previous researchers made their own assessment and make a comparison.
Main Results

The findings were an overall impact of this reclassification effort is a dramatic decrease in the
number of studies that showed a negative correlation between the two.
Research Paper 3
Author : Cedric E. Dawkins and John W.Fraas (October 2008)
Aim
The researcher attempted to examine the relationship between corporate social performance and
annual report disclosure.
Method
The sample for the study consists of 217 S and P 500 companies divided into 148 low corporate
social performance and 69 high corporate social performance.
Findings
The analysis suggests that companies strategically link their corporate social performance and
disclosure practices because there is a positive relationship between corporate social
performance and annual report disclosure.
Research Paper 4
Author : Nagib Salem Muhammod Bayound (2012)

Aim
To examine and extend the literature by obtaining a deeper understanding of the link between
corporate social responsibility disclosure and organisational performance in terms of financial
performance.
Method

The methodologies used in the study are content analysis, historiography and questionnaires.
Qualitative research will also be used.
Main Results
They is a growing support for corporate social responsibility disclosure and the importance of
communication between a company and its stakeholders. They is a positive relationship between
corporate social responsibility disclosure and corporate performance.
Research Paper 5
Author : W. Gary Simpson and Theodor Kohers (2002)
Problem
Efforts to examine the relationship between corporate social reporting and performance
scientifically have proven the relationship complex and the theoretical and methodology different
Carrol 2000, Griffin and Mahon 1997, Rowley 2000, A better understanding of the link between
the two would be invaluable to mergers and stakeholders. The purpose of this research was to
extend earlier research on the relationship because previous research has resulted in
contradictory conclusions although must indicate a positive link.
Method
Sample and data were collected from national banks and examined for CRA compliance in 1993
and 1994. Two measures for financial performance were considered to capture major dimensions
of financial performance in banks. The measures used were return on assets ratio and losses to
total loan.
Findings
The findings were that there is a strong indication that the link between social and financial
performance is positive. This mean return on assets for the group of banks rated outstanding was
1.75% compared to 0.984% for the banks that received a need to improve rating. The findings for
this investigation were important because they validated strong positive relationship between
corporate social reporting and financial performance in a different setting

Research Paper 6
Author : Margarita Tsoutsoura (March 2004)
Problem
The study was to test the sign of the relationship between corporate social responsibility and
financial performance. The sign may imply a negative, positive or neutral links. The argument
for a negative relationship was backed by Friedman 1970 and other economist. According to
their theory socially responsible firms have a competitive disadvantage (Aupperle et al 1985)
because they incur costs that can be avoided by individuals or government. On the other hand
many empirical results reveal that no significant relationship because they are so many variables
that intervene. Lastly they is a positive relationship since actual costs are converted into benefits
Method
The researcher used two methods to measure corporate social re/sponsibility. Firstly the KLD
rating data for companies in S and P 500, convert the absolute KLD 5000 to a scale with 10 of as
a base and any lower score than 10 shows that the corporate social responsibility concerns about
the company are more than strength or using the Domin 400 Social index proxy. As in
McWilliams ,A and D Siegel 2000 the measure of corporate social responsibility is a dumy
variable with a value of 1 (one) if a firm is included in DSI 400 in a given year (for having
passed the social screen) and 0 (zero) otherwise.
Company performance was measured using accounting ratios like return on assets, return on
equity, return on sales. The control variable were risk, size and industry McWilliams A and D.
Siegel 2000
Findings
In general the results are stronger when the KLD scores are used as a measure for corporate
social responsibility rather than when Domin index participation is used. In both cases results
show a positive association between corporate social responsibility and corporate performance.
Research Paper 7

Author : Daniel Mogaka Makori and Ambrose Jagongo (October 2013)

Aim
The objective of the study is to establish whether there is any significant relationship between
environmental accounting and profitability of selected firms listed in India.
Method
The data for the study were collected from annual reports and accounts of 14 randomly selected
quoted companies in Bombay Stock Exchange. The data was analysed using multi regression
models.
Main Results
The findings were that they is a significant negative relationship between environmental
accounting and return on capital employed and earnings per share and a positive relationship
between environmental and net profit margin and dividend per share. It was concluded that
environmental reporting should be made compulsory so as to improve organisational
performance.

CHAPTER III: RESEARCH METHODOLOGY

3.0 INTRODUCTION
The chapter outlines a detailed description of the research design and methodology used in this
study. The study determined the level of social accounting disclosure in Zimbabwe as a
developing country. The purpose of this study is to explore the relationship between corporate

performance in terms of financial performance and social accounting disclosure practices. The
research aims to examine the relationship in different sectors namely manufacturing, banking,
mining and service sectors. Quantitative method namely the content analysis method of
collecting data will be used in this study so as to ensure validity and reliability. It will be used on
annual reports. The chapter ends with a summary.
3.1 Research Design
Churchill (2002:7) defines a research design as simply the framework or a plan for a study used
as a guide in collecting and analysing data and Crowell (2009:4) defined it as a systematic step
used to accomplish the purpose of the study. The main objective of this study is determining the
relationship between firms corporate performance and the level of social accounting disclosure.
Quantitative methods of collecting data will be adopted for this research,these methods are
drawn from natural science and hence usually used in social science (Morgan and Smircich
1980). Quantitative methods acquire knowledge by manipulating information through difficult
qualitative methods for example multivariate statistical analysis (Morgan and Smircich 1980).
Patton (1990 p.14) states that this method requires the use of standardised measures so that the
varying perspectives and experiences of people can be fit into a limited number of predetermined
response categories to which numbers are assigned. In this study quantitative analysis includes
content analysis only.
3.1.1 Content Analysis
This research uses content analysis as the first method to collect quantitative data on social
accounting disclosure in annual reports of firms in Zimbabwe. Kolbe and Burnett (1991) mention
that, using this method is significantly helpful in exploratory research, because there is no need
to make generalizations or adopt a set of theoretical perspectives. The researcher uses content
analysis as a technique for gathering data because it has been used in prior social accounting and
corporate social responsibility reporting for the purpose of identifying and evaluating the extend
of disclosures of different items. The prior researchers includes Metts and Grohskopf 2003
Guthrie et al.2 004, Gray et al, 1995, Rutherford 2005 and Berelson 1952, Smith and Taffler
2000, Stanton et al. 2004, Sydserff and Weetman 2002, Guillamon-Saorin et al, 2006 among
others.

3.2 Population and Sample

3.2.1 Population
Jacobs (2012) defines a population as a larger group from which individuals are selected to
participate in the study. Burns and Groove (2003; 213) also describe population as all elements
that meet the criteria for inclusion in a study. Research population includes target and accessible
population, where target population is the entire set of units for which the survey data are to be
used to make inference and accessible population is the actual population on which the results
can be generalized. The target population for the current study comprised of 68 companies
quoted on the Zimbabwe Stock Exchange companies.
3.2.2 Sample
Thompson (2012) stated that a sample size is the number of observations used for calculating
estimates in a population. Sample size reduces expenses and time by allowing a researcher to
estimate information about a whole population without having to survey each member of the
population. The annual reports of 2012 from Zimbabwean firms were chosen for the study
because these were the latest and published hence easy to collect. The annual reports were from
four sectors representing this sample namely manufacturing, banking and services, mining and
insurance sectors. The researcher has chosen these sectors because they have their annual reports
published and are interested in corporate social responsibility activities and disclosing (Pratten
and Mashat 2009, Ahmed 2004). The annual report were collected from company Websites or
and visiting company offices and some were received by mail.

3.3 Sources of Data

The research made use of secondary data because it minimizes the danger of collecting
haphazard data and makes sure that data collected meets the objectives of the research.
3.3.1 Secondary data
Saunders et al (2011, p 233) noted that secondary data is a collection using data previously
collected for some other purposes. The research made use of data that already existed and

collected for other purposes. The research will use texts, the internet, newsletters journals, and
financial reports from previous years. Secondary data help the research to have a platform on
which to extract objectives, the problem in reality and the best solution thereof. It also enabled
the study to obtain data at a relatively low cost since data is readily available.
3.4 Data Validity and Reliability
Another aspect of content analysis is to assess the validity of data which is essential in this study.
Validity in content analysis can be related to two things, unreliability limits the chance of
validity, reliability does not guarantee validity and in pursuit of high reliability validity tends to
get lost (Krippendorff 2004). Evaluating both reliability and validity ensured that coding of the
text will be done in the same way, which in turn diminished the chance for inaccuracy and
biases.
3.5 Data Analysis Procedure
3.5.1 Statistical analysis
A number of statistical analyses were used to examine the data captured by the annual reports
and the questionnaire used in this study. According to (Oppenheim 1998), different statistical
tools can be used for different purposes depending on the nature of the data. The statistical
analysis program SPSS (statistical package for social sciences) was used in this study. The
techniques and methods used in this study includes the following

3.5.2 Descriptive Statistics

Measures of dispersion, measures of central tendency, and measures of distribution were used to
describe the data in this study.
3.5.3 Correlation Analysis
Both Pearson correlation coefficients and Spearmans rank-order correlation were used to
determine the correlations between corporate performance in terms of financial performance and

categories of social accounting disclosure practices across the whole sample, which included
four different sectors, from 2011 to 2012.
3.6 Summary
The chapter discussed in depth the research method used for the study. Only quantitative
methods were used. Only one research method was used namely content analysis method on
annual reports. The chapter also showed data analysis methods and sources of data.

CHAPTER IV: DATA PRESENTATION, ANALYSIS AND INTERPRETATION

4.0 INTRODUCTION
This chapter reports the findings from the research. It shows the results of content analysis on
annual reports from four different sectors and the results of the statistical analysis. Data gathered
from companies annual reports is analyzed in this chapter. Descriptive and correlation analysis
are also included. Data is presented using tables, graphs and charts.

4.1 Content Analysis of Annual Reports

To analyze 30 annual reports content analysis was used on annual reports for the period of 2012
in different sectors (banking and services, mining, insurance and manufacturing) of 30
Zimbabwean organizations. The results were used to describe social accounting disclosures. The
categories and nature of social accounting disclosure is presented in this section.
The result of the content analysis method shows that companies do make social accounting
disclosures in four categories (environmental, community involvement, directors remuneration
and employee disclosure). In their annual reports 27% of the companies disclose social
accounting information in four categories, 23% of the companies in three categories, 30% in two
categories and 13% in one category. Companies that do not present any social accounting
information their annual reports are 7% in total.
Table 4.1: Social Accounting Disclosure by Category
Annual Report

No. of Categories Disclosed

4

Number of Annual Reports (No)

30

Percentage of Annual Reports (%)

27

23

30

13

100

%: percentage of Social accounting information disclosure in the sector

The table above will further be illustrated by the figure below in terms of a bar graph
Figure 4.1: Social Accounting Disclosure by Categories

Total

From the graph it can be seen that an average of less than ten annual reports from different
companies disclosed social accounting information in each category. This because some
companies do not disclose any social information at all and those that disclose only disclose on a
small portion of their annual reports.
Table reveals results between four different industry sectors in social accounting information
disclosure. The Banking and Services sectors have the highest social accounting disclosures in
all four categories with community involvement being the highest disclosed category and the
manufacturing sector being the second highest disclosing sector. Insurance and the Mining sector
respectively follow.
Table 4.2: Social accounting information disclosure by Categories
Annual Reports

Companies

Total

Section

Banking and
Services

Mining

Insurance

Manufacturing

Community Involvement disclosure

No

10

21

Environmental disclosure

No

17

Employee disclosure

No

17

Directors
disclosure

remuneration

No

16

No: number of Social accounting information disclosure in the sector

The table shows that community involvement and employee disclosure information is high
compared to environmental and directors remuneration disclosure which is low in these sectors.
Figure 4.2: Social Accounting information Disclosure by Categories

The figure above attempts to disclose social accounting information disclosed by companies
listed on the Zimbabwe stock exchange. The banking and services industry has the highest
disclosure of information with the highest being community involvement and employee
disclosure. Most of the companies had some form of social accounting disclosure except only
two companies which had no disclosures.

Table 4.3: Social Accounting Disclosure Information Areas

Categories and subcategories of social accounting disclosure information

Annual Reports

No

Community Involvement disclosure:

Education

26.67

Public healthy

13.33

Sporting and recreation

13

43.33

Arts and culture

23.33

Sustainability

11

36.67

Energy

30

12

40

Pension funds

22

73.33

Healthy and safety

18

60

Share ownership

13.33

Environmental disclosure:

Directors remuneration disclosure:

Directors interests
Employee disclosure:

%: Disclosing companies as a percentage of total sample

Figure 4.3: Social accounting disclosure Areas

Social accounting information that have been widely disclosed by many companies is employee
disclosure with the number one subcategory being pension data followed by healthy and safety
of employees which are 73.33% and 60% respectively disclosure in annual reports.

4.2 Statistical Analysis

To determine whether they is a relationship between social accounting disclosure and corporate
performance using financial measures namely return on equity and return on assets with three
different tests (descriptive analysis, correlation and regression analysis).
4.2.1 Descriptive Analysis
All the variables used in this study have been shown in the table below. The data that was
obtained on the annual reports can be ranked as (1) Return on Equity (mean = 0.24431) and (2)
the Return on Assets (mean = 0.9560)
The table below also shows sum, variances and all average indexes for all variables in the study.
Community involvement disclosure is illustrated by the indexes as the highest disclosure with an
average mean of 0.70, followed by environmental disclosure with an average mean 0.67, with an
employee disclosure (mean = 0.60) and slightly less disclosures on directors remuneration
scoring an average mean of 0.57.
4.2.2 Skewness and Kurtosis
For the dependant and interdependent variables shown in the table below skewness and kurtosis
indicate that the overall disclosure index and all dependant variables are normally distributed.
At 0.05 level of significance both skewness and kurtosis coefficients are not significantly
different from zero (0). Only Return on Equity and Return on Assets are significantly different
from zero (0).

Table 4.4: Descriptive Statistics for All Variables

Descriptive Statistics
N

Minimum Maximum Sum

Mean

Statistic Statistic Statistic Statistic Statistic Std.

Error

Std. Variance Skewness

Deviation

Kurtosis

Statistic Statistic Statistic Std. Statistic Std.

Error
Error

Return on
Equity

30

-.146

1.973

7.329 .24431 .066185 .362509

.131

3.975 .427 18.783 .833

Return on
Assets

30

-.064

.309

2.868 .09560 .015487 .084827

.007

.443

Community
Involvement

30

21

.70

.085

.466

.217

-.920 .427 -1.242 .833

Environmental
Disclosure

30

20

.67

.088

.479

.230

-.745 .427 -1.554 .833

Employee
Disclosure

30

18

.60

.091

.498

.248

-.430 .427 -1.950 .833

Directors
Remuneration
Disclosure

30

17

.57

.092

.504

.254

-.283 .427 -2.062 .833

Valid N
(listwise)

30

4.2.3 Correlation Analysis

.427 -.015 .833

The researcher conducted an investigation using Pearsons and Spearmans correlation

coefficient on SPSS (Statistical Package for Social Sciences) to find the relationship between
corporate performance and social accounting disclosure practices in four categories (H1) (Return
on Assets and Return on Equity).
4.2.4 Pearsons Correlation
The relationship between corporate performance and social accounting disclosure practices is
reported on the table below using Pearsons correlation coefficient.
Table shows that some independent variables are essential for corporate performance indexes.
There is a significant and positive correlation between some independent variables and some
corporate performance indexes.
Environmental disclosure, return on equity and return on assets have a positive relationship at
0.379 and 0.307 and the significance level is less than 5%. This means that they are significantly
and positively correlated indicating that in this sample as environmental disclosure increases
return on equity and return on assets also increases.
In addition to that community involvement disclosure, environmental disclosure, return on equity
and return on assets has a positive correlation coefficient at 0.782 and 0.450 at the significant
level of 1%. This means they are significantly and positively correlated indicating that in this
sample as community involvement and environmental disclosure increases return on equity and
return on assets also increases.
From the table below the results of pearsons correlation coefficient shows that they is a
relationship between corporate performance in terms of return on equity and return on assets and
social accounting disclosure practices in four categories, community involvement disclosure,
environmental disclosure, employee disclosure and director remuneration disclosure.

Table 4.5: Pearson Correlation Coefficients (correlation [above] & p-value [below]) on the
relationship between Corporate performance and Social Accounting Disclosure Practices
Correlations

Pearson
Correlation

Return

Return

Employee

Directors

Environmental

Community

on

on

Disclosure

Remuneration

Disclosure

Involvement

Equity

Assets
.526**

-.147

-.268

.379*

-.309

.003

.438

.153

.773

.096

30

30

30

30

30

30

.526**

.020

-.051

.450**

.782**

.918

.789

.307*

.945

Return on Equity Sig. (2tailed)

N
Pearson
Return on
Assets

Correlation
Sig. (2tailed)
N
Pearson

Employee
Disclosure

Correlation
Sig. (2tailed)
N
Pearson

Directors

Correlation

Remuneration

Sig. (2-

Disclosure

tailed)
N
Pearson

Environmental
Disclosure

Correlation
Sig. (2tailed)
N
Pearson

Community
Involvement

Correlation
Sig. (2tailed)
N

Disclosure

.003
30

30

30

30

30

30

-.147

.020

.384*

.144

.208

.438

.918

.036

.447

.270

30

30

30

30

30

30

-.268

-.051

.384*

-.048

.161

.153

.789

.036

.803

.394

30

30

30

30

30

30

-.055

.136

.144

-.048

.154

.379*

.307*

.447

.803

30

30

30

30

30

30

-.309

.013

.208

.161

.154

.096

.945

.270

.394

.416

30

30

30

30

30

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).

4.2.5 Spearmans Rank-Order Correlation

.416

30

Table reports the test of the analysis of the correlation between corporate performance and social
accounting disclosure practices in four categories using Spearmans rho.
The value for Spearmans rho from the table below indicates that they is a significant positive
correlation coefficient between community involvement disclosure, return on assets and return
on equity of 0.877 and 0.704 at the significance level of 0.01. This means that when the level of
community involvement disclosure is increased return on assets, return on equity also increases.
Community involvement disclosure, return on assets and return on equity are positively and
significantly correlated. With return on assets 0.877, p-value < 0.01 and return on assets 0.704, pvalue < 0.01.
The correlation between employee disclosure, environmental disclosure, return on equity and
return on assets indexes of 0.384, 0.363, and 0.365 is also significantly and positively correlated.
This means they are significantly positively correlated indicating that in this sample as level of
employee disclosure and environmental disclosure increases so does the return on assets and
return on equity.
The results pertaining to correlation between dependant variables and independent variables on
using both Pearsons correlation and Spearmans correlation are relatively similar. There is a
significant and positive correlation between community involvement disclosure, employee
disclosure and environmental disclosure with either return on assets or return on equity.

Table 4.6: Spearman Correlation Coefficients (correlation [above] & p-value [below]) on
the relationship between corporate performance and social accounting disclosure practices

Correlations
Communit

Environme

Directors

ntal

Remunerati

Disclosur

on

on

Involveme

Disclosure

on

Equity

Assets

nt
Correlation
Community

Coefficient

Involvement

Sig. (2-tailed)

Environmenta Coefficient
l Disclosure

Sig. (2-tailed)

1.000

.154

.161

.208

.704**

.877**

.416

.394

.270

.493

.029

30

30

30

30

30

30

.154

1.000

-.048

.144

.363*

.200

.416

.803

.447

.070

.289

30

30

30

30

30

30

.161

-.048

1.000

.384*

-.229

-.054

.394

.803

.036

.223

.775

30

30

30

30

30

30

.208

.144

.384*

1.000

.323*

.020

.270

.447

.036

.967

.918

30

30

30

30

30

30

0.704**

.335

-.229

.323*

1.000

.798**

.493

.070

.223

.967

.000

30

30

30

30

30

30

.877**

.365*

-.054

.020

.798**

1.000

.029

.289

.775

.918

.000

30

30

30

30

30

30

N
Directors
Remuneratio
n Disclosure
Spearman'

Correlation
Coefficient
Sig. (2-tailed)
N
Correlation

s rho
Employee

Coefficient

Disclosure

Sig. (2-tailed)
N
Correlation

Return on

Coefficient

Equity

Sig. (2-tailed)
N
Correlation

Return on
Assets

Coefficient
Sig. (2-tailed)

Return

Disclosure

N
Correlation

Employee Return

N
*. Correlation is significant at the 0.05 level (2-tailed).

**. Correlation is significant at the 0.01 level (2-tailed).

4.3 Corporate performance and Environmental disclosure

Figure 4.3.1: Corporate performance and Environmental disclosure

From the above line graph as a company increases disclosure pertaining the environment the
return on assets of the company increases meaning profitability therefore they is a positive
relationship between performance in terms on return on assets and environmental disclosure but
however as environmental disclosure increases the return on equity drops.

4.3.1 Corporate performance and Community involvement disclosure

Figure 4.3.2: Corporate performance and Community involvement disclosure

The line graph above shows that as the level of community involvement disclosure is increased
corporate performance in terms of return on assets does not change but remains constant
meaning they is no relationship but as the level of disclosure is limited or reduces performance
increases in terms of return on equity.

4.4 Regression analysis

In this research a multiple regression analysis was adopted using SPSS to code, enter and
compute measurements of regressions.
4.4.1 Regression analysis on Return on Assets (ROA)
Table 4.4.1: Model summary (Return on Assets)

Model Summary
Adjusted
Model

R Square
.144a

R Std. Error of the

Square

.021

Estimate

.136

.690404

a. Predictors: (Constant), Employee Disclosure, Environmental

Disclosure, Community Involvement, Directors Remuneration
Disclosure

The Adjusted R- squared is a coefficient of determination which shows how the dependent
variable (ROA) varies with the changes of the independent variable (employee disclosure,
environmental disclosure, community involvement disclosure and directors remuneration
disclosure). For this research adjusted R squared is 0.136 which means that there was a variation
of 13.6% on ROA of listed companies due to changes in employee disclosure, environmental
disclosure, community involvement disclosure and directors remuneration disclosure and other
factors affecting ROA by 86.4%.
Table 4.4.2: Anova (ROA)

ANOVAa
Model

Sum of Squares

df

Mean Square

Sig.

Regression

.004

.001

.133

.969b

Residual

.204

25

.008

Total

.209

29

a. Dependent Variable: Return on Assets

b. Predictors: (Constant), Employee Disclosure, Environmental Disclosure, Community
Involvement, Directors Remuneration Disclosure

From the Anova statistics in the table above of the processed data shows that there is a
significance level of 96.9% of the sample used. This means the sample is not ideal for making a
conclusion for the whole population because it has a significance value (p-value) more than 5%.
Table 4.4.3: Coefficients (ROA)
Coefficientsa
Standardized

Model
(Constant)

Unstandardized Coefficients

Coefficients

Beta

Std. Error
.083

.040

-.001

.037

.023

Directors Rem discl

Employee disclosure

Comm Involvement dis

Environmental discl

Sig.
2.069

.049

-.003

-.015

.988

.036

.131

.643

.526

-.009

.037

-.053

-.243

.810

.004

.037

.022

.099

.922

a. Dependent Variable: ROA

From the above table the established equation is:

Y=0.083 - 0.001X1 + 0.023X2 - 0.009X3 + 0.004X4
From the above equation, it can be interpreted that community involvement, environmental
disclosure, employee disclosure and directors remuneration disclosure to a constant zero, Return
on assets would stand at 0.083. A unit increase in community involvement disclosure would lead
to a decrease in corporate performance of companies by a factor 0.001, a unit increase in
environmental disclosure would lead to an increase in corporate performance of companies by a
factor 0.023, a unit increase in directors remuneration disclosure would lead to a decrease in
corporate performance of companies by a factor 0.009 and a unit increase in employee disclosure
would lead to an increase in corporate performance of companies by factor 0.004. From the table
there is no independent variable that is significant at 95% level of confidence.
4.4.2 Regression analysis on Return on Equity (ROE)

Table 4.4.4: Model summary (ROE)

Model Summary
Adjusted
Model

R Square
.381a

a. Predictors:
Disclosure,

Community

Square

.145

(Constant),

R Std. Error of the

Estimate

.008

.361045

Employee

Disclosure,

Environmental

Involvement,

Directors

Remuneration

Disclosure

The Adjusted R- squared is a coefficient of determination which shows how the dependent
variable (ROE) varies with the changes of the independent variable (employee disclosure,
environmental disclosure, community involvement disclosure and directors remuneration
disclosure). For this research adjusted R squared is 0.008 which means that there was a variation
of 0.8% on ROE of listed companies due to changes in employee disclosure, environmental
disclosure, community involvement disclosure and directors remuneration disclosure and other
factors affecting ROA by 99.2%.
Table 4.4.5: Anova (ROA)

ANOVAa
Model

Sum of Squares
Regression

df

Mean Square

.552

.138

Residual

3.259

25

.130

Total

3.811

29

F
1.059

Sig.
.003b

a. Dependent Variable: Return on Equity

b. Predictors: (Constant), Employee Disclosure, Environmental Disclosure, Community
Involvement, Directors Remuneration Disclosure

From the Anova statistics in the table above of the processed data shows that there is a
significance level of 0.3% of the sample used. This means the sample is ideal for making a
conclusion for the whole population because it has a significance value (p-value) less than 1%.
Table 4.4.6: Coefficients (ROA)

Coefficientsa
Standardized

Model

Unstandardized Coefficients

Coefficients

Beta

(Constant)

Std. Error
.495

.161

Comm Involvement dis

-.209

.149

Environmental discl

-.018

Directors Rem discl

Employee disclosure

Sig.
3.076

.005

-.269

-1.403

.011

.144

-.024

-.126

.041

-.162

.146

-.225

-1.108

.278

-.001

.149

-.001

-.007

.005

a. Dependent Variable: Return on Equity

From the above table the established equation is:

Y=0.495 - 0.209X1 - 0.018X2 - 0.162X3 - 0.001X4
From the above equation, it can be interpreted that community involvement, environmental
disclosure, employee disclosure and directors remuneration disclosure to a constant zero, return
on equity would stand at 0.495. A unit increase in community involvement disclosure would lead
to a decrease in corporate performance of companies by a factor 0.209, a unit increase in
environmental disclosure would lead to an decrease in corporate performance of companies by a
factor 0.018, a unit increase in directors remuneration disclosure would lead to a decrease in
corporate performance of companies by a factor 0.162 and a unit increase in employee disclosure
would lead to an decrease in corporate performance of companies by factor 0.001. From the table
community involvement disclosure, environmental disclosure and employee disclosure are
significant at 95% level of confidence of 0.11, 0.041 and 0.005 respectively. This means
community involvement disclosure, environmental disclosure and employee disclosure have a
significant influence on corporate performance of ZSE listed companies ( Peter A Stanwick and
Sara D Stanwick, 1998).

4.5 Chapter summary

The chapter investigates the relationship between corporate performance in terms of financial
performance and social accounting disclosure practices. The researcher used four ZSE
companies in four sectors (banking and services, mining, insurance and manufacturing). Now
there is great need for management to take greater responsibility of corporate responsibility as its
disclosure affects business performance through things like company reputation. Now
stakeholders urge companies to disclose social accounting information as it enhances corporate
performance.
The content analysis on annual reports have reviewed that most companies disclose in four
categories of social responsibility and only a few do not disclose. Disclosures like community
involvement are very high in every sector of the industry with little being disclosed on directors
remuneration. Environmental and employee disclosure were very high in the banking and
manufacturing industries. These findings indicate that annual reports are directed at stakeholders
interests.
This chapter reviews that companies are showing great concern by increasing disclosures in their
annual reports. To improve performance there is need for companies to disclose more on
community involvement, environment and employee data.
The previous results say higher levels of social accounting disclosure are positive association
with financial performance hence the results of this chapter provide a strong support extricate the
impact of social accounting disclosure on corporate performance.
Contributions done by this study to research is that it extends previous research using
institutional resource based perspectives and it brings out the importance of social accounting
disclosures thereby encourages companies to disclose more in their annual reports.
However the research focuses on annual reports only and lives out other mass media used by
companies to communicate to stakeholders and all the sample consists most of the companies
listed it is small and the use of a larger sample would yield better results on the relationship and
more reliable .

CHAPTER V: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

5.1 Summary
Chapter one (introduction) focused on the background of the study where the research
highlighted on global perspectives on the issue under study to find out how developed disclose
corporate responsibility information. The chapter also highlighted the research objectives,
research questions and also touched on the justification of the study, delimitation, limitations and
definitions of difficult words and phrases.
Chapter two (literature review) reviewed the literature covered by previous authors that related to
the objective of this research. The literature review touched on a number of theories in social
accounting such as the stakeholder theory, global reporting initiative and other traditional
theories. The chapter also highlighted on the disclosure of social accounting and where it
originated by Gray (1995, 2000, 2001 and 2002). The chapter also covered the empirical review
which shows previous studies and investigations similar to the one under study and gives their
findings and recommendations.
Chapter Three (methodology) provided the research methodology. The research was largely
descriptive since it aimed at answering the questions concerning the relationship between
corporate performance and social accounting disclosure practices. The researcher opted to use
only secondary data obtained from websites because it was much easier. A sample size of 30
companies was used for the study and the researcher made use of a statistical package for social
sciences and content analysis to ascertain social accounting information disclosed in annual
reports.
Chapter Four covered the presentation, analysis and interpretation of findings. Data gathered was
presented in the form of line graphs, bar and column graphs. Data was analyzed using mean,

mode, standard deviation and complex methods like correlation and regression analysis and
possible explanations were given and were supported by literature.
Summary of Research Findings

ZSE companies disclose social accounting information in four categories which are
community involvement disclosure, environmental disclosure, employee data and
directors remuneration disclosure with 27% disclosure in four categories, 23% in three,
30% in two, 13% in one and 7% with no disclosure at all.

The statistical analysis showed that they is a significant coefficient between the
dependent variable (return on assets and return on equity) and interdependent variables
(community involvement disclosure, environmental disclosure and employee data)
meaning they is a relationship between corporate performance and social accounting
disclosure practices.

5.2 Conclusions
The study revealed that Zimbabwe Stock Exchange listed companies disclose social accounting
information and that they is a significant and positive correlation between corporate performance
and social accounting disclosure practices meaning they is a relationship between corporate
performance and social accounting disclosure practices.

5.3 Recommendations
The following recommendations were proposed subsequent to the findings

For further studies researchers should use things like mass media for example
advertising, interim reports and separate reports because this research focused only on
annual reports

It is difficult to find the appropriate theory to use to analyze the relationship between
corporate performance and social accounting disclosure practices, previous studies have
used the legitimacy theory but future researches should use all the theories namely the
legitimacy theory, stakeholder theory and agency theory to produce excellent results.

The content analysis method used to collect data on annual reports is complex to use and
possesses a challenge of bringing out wrong results because of the coding process hence
future studies should use content analysis, interviews and questionnaires thus using both
primary and secondary data.

Management should strive to improve social accounting disclosures in their annual

reports and those that do not disclose this information should do so because it improves
financial performance because of reputation with consumers and accounting setting
boardies should provide more frameworks for financial and non-financial social
disclosures on listed companies.