CHINHOYI UNIVERSITY OF TECHNOLOGY

SCHOOL OF BUSINESS SCIENCES AND MANAGEMENT

THE IMPACT OF INDUSTRY GROUPING ON SOCIAL ACCOUNTING
DISCLOSURE PRACTICES IN ZIMBABWE
A DISSERTATION BY
MATINETSA MUTONDO
(C108739Y)
A DISSERTATION SUBMITTED TO THE SCHOOL OF BUSINESS SCIENCE AND
MANAGEMENT IN PARTIAL FULFILMENT OF REQUIREMENTS FOR THE
AWARD OF
BACHELOR OF SCIENCE (HONS) IN ACCOUNTACY
MR HOSHO
May 2014 15

CHAPTER 1
INTRODUCTION
According to www.corporatewatch.org The Phrase corporate social responsibility was coined
in 1953 with the publication of Bowens Social Responsibility of Businessmen which posed the
question what responsibilities to society can business people be reasonably expected to
assume? Since then, stakeholders have become more and more interested in companies
corporate social responsibility activities. According to www.kpmg.com companies trying their
best to show their responsibility to the society. The article also notes that stakeholders of
companies are demanding corporate accountability through straight forward corporate social
responsibility disclosure.
This chapter introduces the reader to the general research problem and what the researcher aims
to achieve at the end of the research. It looks at the general background of the study area and it
explains the impact of industry grouping on social accounting disclosure practices of the
Zimbabwe Stock Exchange listed companies. It will go on to look at the give the research
objectives, the research questions, significance of study, scope of study, assumptions, limitations
and definition of terms.

1.0 BACKGROUND OF THE STUDY

Gray et al (2000) defined social accounting as the preparation and publication of an account
about organisations social, environmental, employee, community, customer and other
stakeholder interactions and activities and, where, possible the consequences of those
interactions and activities.
Alexander and Britton 2000 viewed social accounting as the reporting of those costs and
benefits which may or which may not be quantifiable in monetary terms arising from economic
activities and substantially, borne or received by the community at a large or particular group not
holding a direct relationship with the reporting entity.

A number of studies investigated the relationship between a company industry and the levels of
social disclosures have been carried out; these include that of Cerf (1961), McNally el al (1982),
Cooke (1992). McNally et al (1982) e features that companies from a particular industry group
may adopt disclosure practices additional to those mandatory for companies from all industries,
while Wallace et al (1994) found that manufacturing companies in Japan disclose more
information than non manufacturing companies, Further, Inchausti (1997) reasons that if a
company does not adopt the same disclosure strategies as others in the same industry it could
negatively impact on share price. Inchausti (1997) also suggests the relationship between the
extent of disclosure and industry membership may be due to political costs theory, as industry
membership may affect the political vulnerability of a company.
(Gray et al 2001) took annual social disclosures of the top hundred UK companies using the
longitudinal. They found that social disclosure was related to characteristics of company, its
profitability, and size as well as industry type. Basing on the study by Milne 2002, industry
type has a strong impact on the disclosure of social accounting. Usually firms tend to provide
information regarding their industry type (Tondkar et al 2005). Manufacturing industries will
choose to disclose more information on employees as compared to companies in chemical
industries that are, probably disclosing environmental information (Cooke and Hannifa 2005)
Benefits of social accounting disclosure include that it provides with an ongoing record of how
your organisation has developed and changed over time , it gives a record of what the
organisation is doing and sorts of impacts it will be having on its employees and the entire
surrounding communities. It also helps in getting feedback on how things are going from the
range of people involved in your organisation or enterprise. Social accounting enables the entity
to identify the areas where things are working well and not so well and can be in a position to use
this information to help continue with what it will be doing well and make improvements to
change what is not working so well. It also helps to achieve organisational aims and values.
The table below shows that 33 companies (82.5%) from various industry groupings made social
accounting disclosures at least for one year in their annual reports in Nigeria from (2005-2007) .
Analysis based on industry, showed that chemical and paints, construction and petroleum
3

marketing had 100 percent disclosure of social accounting information. The lowest level of
social accounting information was 66.7% contributed by Breweries and conglomerate while
companies in the building materials (75%), food/beverages and tobacco (80%), and healthcare
(83.3%) level of disclosure from year 2005 to 2007. Therefore, it can be deduced that there is a
growing concern for companies reporting social performance in their financial statements.
Number of companies disclosing social accounting by industry in Nigeria from 2005 to 2007
Table 1
Industry
Breweries
Building materials
Chemical industry
Conglomerates
Construction
Food/beverages
Tobacco
Health care
Total

No; of companies
3
4
4
6
2
10
6
5
40

Companies
social disclosure
2
3
4
4
2
8
5
5
33

with % of disclosure
66.7
75
100
66.7
100
80
83.3
100
82.5

The analysis of Zimbabwean corporate reports indicates that financial issues receive detailed
coverage, with very little mention of social issues. Although the emphasis of corporate reports on
financial issues, issues of social involvement have been reported, often as footnotes to financial
issues. According to www.thestandard.co.zw there is a strong backup in Zimbabwe that locallyoperating companies are mostly focused on their economic growth and they tend to ignore their
operations and activities to the well being of the communities . The article also noted that there
are a number of companies in Zimbabwe that have played many roles to improve their
surrounding communities such as a local funeral insurance company called Nyaradzo Group.
According to Mathibela, A. (2013) companies such as Nestle and Econet had directed on
activities of corporate social responsibility. He noted that most of the companies have
international links and not necessarily Zimbabwean in origin. He also noted that the difficult still
remains of most local companies to manage expected levels of social practices.

The Herald (2012) had an article Genuine Corporate Social Responsibility comes from the
heart which highlighted that there was a noted increase in corporate social responsibility
activities performed by firms in Zimbabwe.
The state of corporate financial, environmental and social accounting disclosure in Zimbabwe
by Rodney Ndamba (2009) showed that only three percent of Zimbabwe Stock Exchanges
(ZSE) active listed companies could disclose social issues in five key areas of a societal
expectation model of the research when applied to their annual reports. These companies were
mainly from the mining sector while the majority of companies from other economic sectors.
A number of South Africas companies in 2001 including Small Medium Enterprises have
managed to report according to Global Reporting Initiative (GRI)s 3G Guidelines. On social
issues, the guidelines require companies to disclose information on their labour practices and
decent work provision. Similarly, companies are also failing to attract the much desired foreign
investors due to undisclosed social issues. Consequently, the current accounting practices in
Zimbabwe have not recognised the growing importance of social and environmental accounting
disclosures. It is imperative that companies in Zimbabwe understand that sustainability reporting
is not for public relations but energy efficiency, waste reduction and pollution prevention.
Further, if Zimbabwe is to attract sustainable capital inflows; the ZSE needs to consider social
and environmental accounting disclosures as a listing requirement in line with regional markets.
The industry accounting profession also needs to actively promote and adapt to social reporting
practices in line with international developments.
Social disclosure in developed countries
Several researchers have written extensively on social disclosure in developed countries, these
include Adams, Hill ,Roberts 1998 ,Gray 2001, these studies suggested that reporting of social
disclosure has improved over the years in developed countries.Araya quoted by Ismail and
Ibrahim 2008 reported that multinational companies in the developed countries are leading when
it comes to producing social information. It was reported that from 1990 to 2003,58% of all
separate reports published around the world came from Europe ,20% Asia and only 2% came
from Africa and the Middle East.
Social disclosure in developing countries
5

According to Abu Shiraz 1998 lack of regulation was one of the most common obstacles that
authors in developing countries were faced with in their efforts to encourage company to disclose
social issues, he also added that the shortage of accounting in developing companies was another
reason social issues were not being disclosed, he added that skills like those of law and
engineering which enabled effective social reporting system were not available in developing
countries.
According to Iyoha 2010 the concern was mostly given on how efficient firms are in terms of
the level of profits and the level of dividends paid, and no much concern was given to social
issues. Lack of legislation was one of the noted challenges that authorities in developing
countries had in their efforts to encourage disclosure of social aspects in reports. In addition Al
Khater and Naser 2003 included the aspect of costs to be a limiting factor to companys social
disclosures in developing countries. Studies on social disclosure in less developed countries have
shown that the target has been mainly on human resources Thompson and Zakaria 2004.
In light of this, this study seeks to analyse how industry grouping impacts corporate social
responsibility disclosures of the Zimbabwe listed companies.
1.1 PROBLEM STATEMENT
Social accounting disclosure is requirement from each operating firm around the world .These
disclosures are expected to meet the desired need for information to all the companys
stakeholders in adherence to the accounting standards. However some companies are not being
in a position to disclose social accounting practices due to the industry they belong .The problem
is then to what extent and how industry grouping is impacting social accounting disclosure
practices in Zimbabwe.
1.2 RESEARCH OBJECTIVES
1. To ascertain the social accounting issues currently disclosed in the annual reports of
Zimbabwe Stock Exchange listed companies.
2. To determine the extent to which industry grouping impacts on social accounting disclosure
practices in Zimbabwe.

3. To investigate the relationship between industry grouping and social accounting disclosure
practices in Zimbabwe.

1.3 RESEARCH QUESTIONS

1. What social issues are currently being disclosed in annual reports of Zimbabwe Stock
Exchange (ZSE) listed companies?
2. To what extent is industry grouping impacting on social accounting disclosure practices in
Zimbabwe?
3. What is the relationship between industry grouping and social disclosure practices in
Zimbabwe?
1.4 STATEMENT OF HYPOTHESIS
Hypothesis -Industry grouping does not impact on social accounting disclosures.
1.5 SIGNIFICANCE OF THE STUDY
It is hoped that this study will evaluate the challenges and prospects facing companies on the
Zimbabwe Stock Exchange with regard to designing social accounting concepts and reporting. It
will facilitate social cost reporting responsiveness and disclosure to investors and social
regulatory bodies.
The study is going to provide the researcher with skills for future academic and scientific
researches and will enhance the researchers understanding in the field of social accounting. It
will also apply knowledge acquired over the years at Chinhoyi University of Technology in
moulding practical solutions applicable to the industry .The study attempts to surface out the
impact of industry grouping on social accounting disclosure practices in Zimbabwe and the
usability of these disclosures in the development of industries if disclosed.
It is going to give more awareness on industry groups and their disclosures as well as the limiting
factors of social accounting disclosures, also the corporate structures of different industrial
groups to needs of disclosure, the relationship of the two and also the literature of social
7

accounting and industry grouping. The study is going to assist the accounting profession
members to identify problem areas within the disclosure of social accounting statements of
companies and to manipulate better approaches to the problems. It will also give them the need
to put more emphasis on such areas to address fairness and truth on social accounting disclosures
as needed.
1.6 DELIMITATIONS OF THE STUDY
The study is going to investigate companies among listed companies on the Zimbabwe Stock
Exchange. There are sixty-two companies in their varied sectors from which samples are to be
selected. The study will focus entirely on the social accounting disclosures among industry
groups which the existing disclosures are not meeting the requirements of the stakeholders. It is
also concerned on how best these disclosures can be to enhance the provision of a uniform
platform of accountable social disclosures.
1.7 LIMITATIONS OF THE STUDY
It is imperative to inform any reader of the piece of work of the analysis. The quality of the
research is likely to be curtailed by the following:
1

Time constraints as the research is going to be undertaken partly during the course of the

semester, as a result other relevant data may be overlooked.

Poor internet connections at the school may delay some downloading of companies annual

reports from the ZSE website.

3 Some of the research needs the researcher to buy news papers hence adding of costs.
4 The study is going to use only annual reports of the Zimbabwe Stock Exchange listed companies
and there will be limited or no information about companies which are not on the Zimbabwe
Stock Exchange.
1.8 SCOPE OF RESEARCH
The research will mainly be focused on companies listed on the Zimbabwe Stock Exchange. A
sample of companies belonging to each industry group is to be taken, and their annual reports are
going to be analysed.
1.9 DEFINATION OF TERMS
8

1. Corporate social accounting disclosure

It is the reporting of information concerning activities done by a company to give back to the
society in which it operates.
2. Industry grouping
It is the classification of companies into categories depending on the type of operations they have
in common.
3 Listed company
4 Stock exchange

1.10 CHAPTER SUMMARY

This chapter looked on how the term Corporate Social responsibility came about and its
importance in todays world. It also looked on how much stakeholders are considering Corporate
Social Responsibility and its disclosure for the going concern of companies. The chapter also
provided the research objectives, questions, scope, significance; limitations and delimitations .It
highlighted the benefits of social accounting disclosure. It also mentioned the sequences of social
disclosures in developed and developing countries. Some of the authors who carried out studies
on the relationship between industry type and social accounting disclosures were also noted.
The history shows that the social disclosure among companies is impacted by the industry type
they belong. This has been evidenced by a number of studies which were taken by different
authors in different countries.

CHAPTER II
LITERATURE REVIEW
2.0 INTRODUCTION

This chapter begins by highlighting the theoretical framework on social accounting, industry
type, and social accounting disclosure and on social accounting disclosure versus industry
grouping. The chapter further gives an empirical framework of different authors and
organisations in relation to social accounting disclosures of companies belonging to different
industry types.
2.1 THEORATICAL REVIEW
2.1.0 Industry grouping

An industry group is a classification method for individual companies, usually grouped based on
common lines of business. According to the economy watch.com an industry is a group of
companies that perform similar functions. It refers to all company groups, or the production of an
economic good within an economy. Industry analysis is a type of an investment research that
begins by focusing on the status of an industry or sector. An industry group is a classification
method for individual stock or companies, usually grouped based on common lines of business.
Industry group is a good place of research for investors to start when doing individual company
research. Most companies within one industry tend to rise and fall as a whole, by knowing the
trends in place within the industry group, the investor can better understand the investment
potential of that company within that group. Industry classification is a commonly accepted
factor to distinguish social disclosure among different companies in legitimacy studies.
2.1.1 Social accounting

Because of the novelty of the subject, we are faced with the multiplicity of the definitions of
social accounting and not of clearly defined framework. There were many concepts and
definitions of social accounting and was the most important:
Range of the activities concerned with the measurement

and analysis of social

performance of business organisations and delivers that information to relevant groups

and communities in order to assist them in making decisions and assessing the social
performance of those organisations (Cooper and Taylor 2005)
Means a report on all costs incurred by the units economic contribution in the fight
against pollution and provision of health care and insurance and other social activities
10

carried out to protect the society and the environment in which work through
(Bebbington and Monova 2008).
A system that deals with measuring the impact of project activities and impact of the
community and report on information resulting from this measurement for both internal
and external parties assigned to this project and the mutual relations with the society
Spence 2009.

Gray (2000) defined social accounting as the preparation and publication of an account about an
organisations social, environmental, employee, community, customer, other stakeholder
interactions and activities and where possible the consequence of those interactions.
Alexander and Britton (2000) viewed social accounting as the reporting of those costs benefits
which may or may not be quantifiable in monetary terms, arising from economic activities and
substantially, borne or received by the community at a large or particular group not holding a
direct relationship with the reporting entity.
2.1.2 Social accounting as a basic accounting

On the basis that the primary objective of accounting is service of society and social welfare.
These have a dear impact on the philosophy of social accounting. In terms of change in all
concepts, objectives, assumptions and principles underlying the conceptual framework of
account to match with financial statement to serve the society in the first place and is not to serve
the stakeholders.
2.1.3 Social accounting disclosure

A number of studies have been published on the subject of social accounting disclosure Bettie et
al (2004) came up with two categories of analysing narratives in the annual reports. He came up
with the subjective approach which uses ratings and the semi objective approach which uses
content analysis. Content analysis have been selected for this study because it has been widely
used in social accounting disclosure studies , to include disclosure studies by Gray at
el(1995),Jamil (2003),Kuasirikin and Sheen(2004).
Evans 2003 defined disclosure as supplying information in the financial statements including
the statements themselves, the notes to the statement and the supplementary disclosures
11

associated with the statement. It does not extend to the public and private statements made by
management information provided outside the financial information.
It was broadly interpreted by (Wolk, Tearney, and Dood 2001) as information in both financial
statements

and supplementary communication including footless post statements events,

management discussions and analysis of operations for the forthcoming year, financial and
operating forecasts and additional financial instruments covering segmental disclosure and
extensions beyond historical cost.
Social accounting disclosure is done to:

Increase properties of all stakeholder and managers, in stakeholder theory, companies

considers the existence of expectation which different each other of group.

Support the continuity of company business.
Legitimise their own existence Brown and Deegan 1998 in Parsa and Kouhy 2000

2.1.4 Industry grouping versus social accounting

A review of literature on the social practices may be seen as providing the context and
justification for a theoretical and empirical study.
Hackston et al and Dierkes, Preston (1997) have contended that company industry is a potential
factor in disclosing of social practices, they revealed that if an industry engages in activities
which could have a substantial social effect then is likely to disclose more of social issues than
other industries. Mark (1991) tested this impact in Newzealand, it was also examined by
(Wallace 1995) on which the same conclusion was derived from the 85 companies which were
listed in Hong Kong in 1991.
Gao (2009) noted that the extent to which public pressure companies ace regarding social issues
varies across industries .Pattern (1991) suggested that the classification of a company to an
industry is crucial in determining the level of social reporting .Milne (1998) reported that
manufacturing industries provide more social information than non manufacturing industries,
this was further supported by Abu Baker (2000) who also revealed the same thing. Disclosure of
social information basing on industry type was also supported by Ismail and Ibrahim (2008).

12

Stray and Blantine(2000) used systematic samples from six sectors in UK.Questionneres were
sent to 696 companies .The overall response rate was 33% and the study observed that there is a
positive relationship between the sizes of sectors, in other words there were variations in
reporting practices within individual sectors.
Grey et al (2001) took social disclosures in the annual reports of the top hundred UK companies
and they found that social disclosure in UK was related to industry affiliation, Ullman (1985)
contributed some important new insights to social accounting disclosures, He wrote about
methodological and theoretical problems that are still valid .Ullman criticised research that was
previously performed and new research directions are proposed. A number of studies
investigated the relationship between a company industry and the level of

social disclosures.

McNally et al (1982) features companies from a particular industry group may adopt disclosure
practices additional to those mandatory for companies from all industries. Further, Inchausti
(1997) reasons that if a company does not adopt the same disclosure strategies as others in the
same industry it could negatively impact on share price. Inchausti (1997) also suggests the
relationship between the extent of disclosure and industry membership may be due to political
costs theory, as industry membership may affect the political vulnerability of a company.
The theme of this review is the pattern in which social disclosures are ranked by industry types.
The state of corporate financial environmental and social accounting and disclosure in Zimbabwe
by Rodney (Ndamba 2009) showed that only three percent of Zimbabwe Stock Exchanges
(ZSE) active listed companies could disclose social issues in five key areas of a societal
expectation model of the research when applied to their annual reports.
2.2 EMPIRICAL REVIEW
Dzingai Kennedy Nyahunzvi (1998) carried out a study to determine the nature and adequacy of
corporate social responsibility reporting among Zimbabwe hotel groups. Content analysis was
used to examine websites, annual reports and mission statements of Zimbabwe hotel groups.
He found out that Zimbabwe hotel groups gave primacy to financial performance rather than
social and environmental themes in their social reporting. In comparative terms the hotel groups
lag behind some of their developed worlds counterparts in corporate social reporting. The
13

research findings suggested that corporate social responsibility initiatives reporting are still a
peripheral issue among Zimbabwe hotel groups.
Clodia Vurro, Francesco Perini (2003) examined a three year disclosure experience of a sample
of fortune hundred companies, the paper aimed to propose and test a model that relates the
structure of corporate social responsibility disclosure to corporate social performance. Combined
content of corporate social responsibility reports and corporate social performance data, the
paper built a longitudinal dataset starting from the population of worldwide companies included
in the accountability rating between 2004 and 2007. Longitudinal regression analysis was
performed on a sample size of one hundred and fourteen firm year observations involving thirtyeight firms over a three year period. Evidence was found that the level of disclosure does not
improve firm ability to manage stakeholders. However a finer grained analysis of the structure of
disclosure showed that better social performers are those who increased the breadth of their
disclosure to stakeholders and evenly distributed disclosure across stakeholders.
It was found that not only the importance of structuring the report in a comprehensive way and
extending coverage to multiple stakeholders and related issues but also to balance between
informative needs, thus avoiding concentrated structures. Accordingly, companies that report on
more themes, presenting a balanced and comprehensive product develop a better ability to
manage their stakeholder network, thus gaining higher corporate social performance.
Nongnooch Kuasirikun, Michael Sherer Thailand (2004) identified that little was known of
the possibilities of corporate social reporting in Thailand. He carried out a study which focused
on moves towards the appreciation of corporate social reporting in Thailand. He aimed to
investigate the effects of social accounting disclosures in Thailand .He used the survey method to
investigate this problem. The survey focused on the annual reports of Thailand companies and
thereby attributed to a tradition of related prior empirical work upon corporate social accounting
practices which has to date largely focused upon English speaking and western contexts. Its
concerns were to gain insights into and to critically appraise various dimensions of these annual
reports so as to construct a critique of corporate social disclosure in Thailand.

14

It was found that it was of importance for relevant agencies to recognise that accounting in
Thailand should be conducted in a way that was consistent with the needs of the Thailand
society.
The international journal of accounting according to (Marc Newson and Craig Deegan 1998)
aimed to explore the social disclosure policies of the large Australian, Singaporean and South
Korean multinational corporations. This exploration was needed as there was little knowledge by
companies of practising social accounting disclosures. The concern was on why large
corporations respond to global expectations rather than simply to the expectations of people
residing in the corporations home country. Surveys which were conducted in 1998 and 1999
were used to obtain global expectation of people. It was found that there was minimal association
between global expectations as represented by the two surveys and social disclosure policies of
large multinational corporations. The study also discovered that country of origin and industry of
operation appears to significantly influence disclosure practices.
Ebimobowei (2011) also studied on social accounting disclosures in the annual reports of
Nigerian companies. He identified a problem that more concern was given on profit
maximisation and social disclosures were ignored yet those social disclosures were on demand.
Forty companies were mandatorily chosen from eight sectors. Data was collected from annual
reports of companies from 2005 to 2007 and the measure of disclosure was by content analysis
and descriptive analysis. He found out that 82.5% of the companies disclosed social information
on their chairman and directors reports whilst the other 17.5% ignored social accounting
disclosures.
France Maphosa (1997) found out a problem that there was lack of legal framework mandating
social responsibility. He noticed a gap on how social accounting disclosures were being legalised
by accounting boards. He carried out a study to investigate on how the processes of social
accounting practices were being carried out by companies. He used a sample of sixty-three listed
companies of the ZSE in 1996. The companies were contacted by mail. He found out that social
issues included in the annual reports took up between two lines and one page of the whole report,
and they tended to be general. The findings showed that little attention was being given to social
accounting disclosures in the annual reports of companies.

15

To give insight into the nature and the extent of the research of corporate social disclosure
undertaken by Portuguese authors. Branco and Delgado (2011) carried out a research which was
based on an electronic search. Journals which mostly focused on Portugal companies published
between 1998 to 2008 were used. They used the content analysis method to collect data .The
published reports indicated that there were limited social issues published. There was also a great
scope for expanding the amount of research on corporate social reporting in Portugal.
Gray et al 2001 aimed to find the relationship between social and environmental disclosure and
four variables which are capital employed, profit, number of employees, and turnover. They took
social and environmental disclosures in the annual reports of the top hundred UK companies for
eight years , the regression and longitudinal analysis was used. It was found that social and
environmental disclosure was related to company characteristics of profitability, size, and
industry affiliation. It was also found that manufacturing industries chose to disclose more
information on employees compared to companies in chemical industry that are probably
disclosing environmental information.
The social responsibility of business has become an important issue in recent years. Many
industries are jumping into the bandwagon of disclosing social aspects using various media to
communicate their practices in this arena to their stakeholders .It was suggested that
companies report on the social accounting in line with what their key stakeholders expect.Sacaris
(2004) argued that firms are more socially responsible simply by the type of their activities. He
investigated activities in different industries and how the industries further disclose their social
practices.
Differences in operation and nature of industries also bring differences in social practices. This
was clearly supported by (Kohers 2002). He concentrated on the banking industry and argued
that variances in social disclosure practices between industries is so great that research needs to
stick to only one industry. There have been some single industry studies in the corporate social
disclosure area. Saches et al (2004) focused on an analysis on Orange Communications in
Switzerland. He performed content analysis on the annual reports of Orange Communications
and he found out that the industry mostly devoted in reporting social issues of employees. They
believed employees information was only important to disclose as far as social disclosures are
concerned. They took employees to be both benefit providers/receivers and risk
16

providers/receivers. Comparing the social practices of an oil company where employee safety
issues are so important (Moore 2001:304) focused on the supermarket industry and looked at
social responsibility through the stakeholders ,employees , customers ,shareholders ,suppliers
,environment and community but did not analyse which stakeholder group was granted more
attention.
Differences in social disclosure among industries are also brought about due to differences in the
controlling panel of the organisational social aspects. Different companies in different industries
have their selected individuals or specified sections to tackle social accounting practices and
disclosures. This was supported by the study of (Rasche and Esser 2006), who researched and
noted that the handling of social issues by management, the board of directors brings about
changes in social accounting disclosure practices.
Humid (2004) further examined on how different industries practice different social disclosures.
He carried out a study focusing on items disclosed. He conducted a content analysis on the
annual reports of the forty-eight firms in the service industry. He concluded that firms in this
industry focused on disclosing customers and employees information as they are companys
primary stakeholders. Social disclosures are also affected by how the industry companies are
impacting on their environment and society. This was supported by (Mitnick 2000). He
investigated on the impacts of companies to society in different industries depending on their
processes and activities of manufacture. He concluded that for companies with a great negative
impact on area of social accounting disclosure for example environment, it will not report that
social practice to a greater extent but will report on other areas where it has a positive impact.
This ignorance of positive impact necessitated good reputation thereby giving room to attract
new and more investors.
A further support of the subject matter of industry type affecting social disclosure practices was
given by (Andrew Lipunga 2008). The study aimed to explore the social reporting practices in
the banking industry of Malawi, it aimed to investigate on how different banks are practising
their disclosure as far as social accounting practices are concerned. The study used content
analysis to examine the annual reports of sampled banks. The study found that the banks
disclosure was 100%. It also found out that most banks disclosed on community related activities
followed by products and customer practices. The study also provided an insight to literature
17

towards the level of social accounting disclosure from a developing country focusing on the
banking sector which is a paramount sector in the economy of a country.
Industry type impact on social disclosure practices was also supported by the study of (Rob
Mohammed, David and Sinclair 2001). They concluded that the measure of industry
classification had significant impact on the results showing influence of various factors under
various specifications of industry types. Revert 2009 also supported that the most influential
variable in variances in social disclosure practices is industry type. Pahuja (2009) also carried out
a study on the manufacturing companies of India. He carried out some content analysis on the
annual reports of those manufacturing companies. It was concluded that the level of
environmental and social disclosure was highly explained by industry type.
Hooks et al (2002) studied social disclosures in the annual reports of NZ Electrical companies.
He found out that most social aspects were not adequately disclosed resulting in information gap
between companies stakeholders and the disclosures published.

The differences in social

disclosures by industry were noted by (Dierkes and Preston 1997) to be influenced by

stakeholder pressure and regulations imposed on some industries. In addition some industries
tend to disclose more corporate information due to their nature and consumer oriented firms are
likely to exhibit more concern to demonstrate their social responsibility to their community, to
improve their reputation and expand profits (Cowen and Scott 1987).
Owalabi (2008) analysed the extent of social disclosure in companies listed on the stock
exchange of Nigeria by sectors. He aimed to identify variances among industries

in social

accounting disclosure practices in Nigeria. He carried out content analysis on twenty listed
companies in the Nigerian stock exchange, covering ten industry types of the economy from
2002 to 2006.Results showed that 35% of companies show social disclosure in their annual
reports and social information was disclosed by multi-national companies (MNC) more than
indigenous companies.
Difference in values among industries is identified to be causing differences in the social
disclosure practices. Pasi Tuominen, Terrhi Uski (2008) aimed to illustrate whether the difference
in values and principles of corporative public limited companies result in differences in corporate
social disclosure among organisational types. They extended framework with some previous
18

literature on corporation. Using qualitative methodology, they compared values and objectives as
well as communication and reporting of the corporative to those of the listed companies. The
analysis and the synthesis of corporate social reporting and cooperation literatures provided
academics and practioners with ideas on how to move toward a model of corporative social
reporting. It was found that values and principles of corporation do not significantly guide the
corporate social reporting of our case corporative. It indicated that corporative fall behind in its
corporate social reporting to those of the listed companies. Ponnu and Okoth (2009) Kenya
aimed to analyse the disclosure practices of Kenyas listed companies. They carried out a content
analysis and chi-square of all the fifty-four listed companies in the Nairobi stock exchange. They
found out that corporate social reporting disclosures, received mostly disclosed the social aspect
of community involvement. It was also noted that there were significant differences among
various industry groupings with respect to company background and themes of corporate social
disclosure.
Themes of social aspects considered by different industries also constitute to differences in
disclosure practices. Cooke and Hannifa (2000) aimed to determine the level of disclosures made
and the disclosures classified by various categories and then compared by industry grouping. A
sample of five hundred companies listed on the Australian stock exchange in 1994 was obtained
from the Australian graduate school of management data base in order to examine the site
rehabilitation and other disclosures provided by mining companies compared to those in other
industries. It was noted that there were differences in disclosure themes and levels when grouped
by industry.
Differences in effective operating systems of industries also lead to different social disclosure
practices. Industries with highly profitable companies tend to consider stakeholder interests in
favour of maintaining their good performances of high levels of profitability. Industries with top
rated companies which will be supporting largely on the countrys economy sustainability are
considered to be disclosing more information on social aspects. This was supported by the study
of (Syed 2009) who examined the relationship between corporate characteristic and human
resources disclosure. He concluded that industries with firms with high levels of profitability
intend to disclose more on human resources.

19

The financial performances of different companies in different industries also contribute to

variances in social accounting disclosure practices among industries. These variances in social
disclosure were supported by the study of (Micah ,Ofurun and Ihendinihu 2012). They carried
out a study on the relationship between financial performance and human resources disclosure
among Nigerian companies. They used financial data of five years and they concluded that the
effect of financial performance accounted for 7.5 % of the variances in human resources
disclosure. Financial performance impact on social disclosures was also supported by
(Karaibrahimoglu 2010 ). He investigated corporate social disclosure practices for 2007 and
2008 in USA. The sample used Fortune five hundred where one hundred companies were
selected randomly. Disclosures were investigated using content analysis of annual non-financial
reports. He used five themes for social practices that are employment, society, supplier,
government and consumer. Findings revealed that differences in financial performances lead to
differences in social disclosure practices.
According to Uwuigbe, U. and Egbide, B. (2012) firmscorporate financial performance
measured by accounting based data which is return on total assets which is profit before interest
and tax divided by the total assets has a significant positive relationship with the level of
corporate social responsibility disclosures. The research suggested higher

financial

performances in firms, lead to their ability to devote to financial resources for the improvement
of sustainable environments in the areas which they operate. According to (Ebiringa, O.T et al.
2013) profitability revealed by net profit is positively associated to corporate social disclosure
of Oil and Gas firms of Nigeria studied. The study noted that economic performance of a firm
impacts managements decision to engage in corporate social disclosures and that profitable
companies are more likely to disclose more

social information in order to have a better

reputation to the public thereby screening themselves from less profitable companies.
Research by Li, Q. et al. (2013) found that companies that perform better are more likely to
disclosesocial accounting information than worse performing ones and produce higher quality
corporate social responsibility reports. Vitezic, N. et al. (2012) found that firms with better
financial performance are more aware of their corporate social activities and make necessary
disclosures concerning those activities. Maskun, A. (2013) analysed the relationship of
profitability and social accounting disclosures using return on assets to measure company
20

profitability and found that it has an impact on corporate social accounting disclosure. The
research concluded that due to large profits companies tend to ignore the financial condition if
some of the profit is allocated to corporate social expenditure since the company would be
focusing on gaining trust and protection from society thereby making it even more profitable.
According to Rouf, A. (2011) the percentage return on equity was positively associated with
companys corporate social responsibility disclosure. This was supported by Hussainey, K et al.
(2011) who also found that profitability was the main determinant for Egyptian listed companies
to disclose CSR information.
The differences in level of social accounting disclosure practices among industries are also
supported by how stakeholders in different industries behave towards social disclosure. The
behaviour includes the benefits foreseen after disclosures have been made. This was supported
by (Weber 2008) who observed and concluded that social disclosure leads to increased sales of a
company, while (Schiebel and Pochtrager 2006) concluded that social disclosure lead to
employee satisfaction , ( Fafaliour et al 2006) believed that social disclosure practices lead to lost
trust in business and capital market.
Organisational orientation to different to different stakeholders also lead to different
disclosures .Podnar and Jancic ( 2006 : 299) also noted that given competitive environments
companies find themselves in environments that cannot treat all stakeholders in the same way
and even communication will be so different. Annual reports of companies in different industries
tend to disclose with different intensity of stakeholder information.
Nature of industries also leads to variances in social disclosure practices among industries.
Nature relates to the basic characteristics of something, in this case its referring to the common
business aspects experienced by all companies grouped in a certain industry .This note had been
supported by (Farache and De Sousa Filhob 2008) , these carried out a study to investigate
disclosures in different companies . They concluded that differences in industry nature lead to
different social disclosures. It has been supported that it is so because of different activities being
encountered in different companies during manufacture, extraction or trade. It is said that some
activities are stakeholder favourable whilst others are not and it was noted that companies with
negative impacts tend to disclose less on social aspects in fear of losing future investors.
21

Nature of industries impact on social disclosure was also supported by the study of (Carlisle and
Faukner 2004) who emphasised that oil and gas industries disclose more on environmental
performance, it is argued that it is so because the nature of their business consider the impacts of
operations and products upon the industry.
It was also supported by the study of (Parsa and Den 2008). They took out a study on how the
nature of industry impacts social disclosure practices. Content analysis was done on the annual
reports of twentyfour listed companies of Australia. The study resulted in conclusions that
industry characteristics affect the nature of social disclosure practices among industries.
Stary and Ballantine 2000 also aimed to analyse how companies in different sectors disclose
their social information. They used systematic samples to collect companies from six industry
types that are banking, electronics, automobiles, water and energy, food and drink in UK.
Questionnaires were sent to six hundred and ninety-six companies. The received sample was
about two hundred and seventy-seven companies given an overall response rate of 33%. It was
found that one third of the companies disclosed environmental and social information and that
one fifth of the remainder planned to do so in near future.
Christian John Mbekomize , Lillian Walley Dima(2013: Volume 43:3) aimed to communicate
social and environmental effects of business operations to society. The purpose of their study was
to determine whether firms listed on the Botswana stock exchange disclosed on social issues in
their annual reports and the extent such firms disclose on social practices. The study also aimed
to investigate if industry grouping influences social disclosure practices. All the listed companies
formed the population sample of the study. Secondary data was obtained from the annual reports
and content analysis was done to determine the extent of disclosure. This extent was determined
using the number of sentences describing social issues such as human resources, environmental
information and community involvement. The results showed that industry type and ownership
determined the level of social disclosures.
Good social practices by companies also influence the level of disclosure. Recommended social
practices among companies enable more customers to flock to such companies.
Rania Kamla , Hussain G Ramal (Issue 6 : 2013) examined social reporting by Islamic banks
with special emphasis on themes related to social justice, by using critical theory and immanent
22

critique , they attempted to explain and delineate reasons for disclosures and silences in Islamic
banks. They examined by using content analyses of annual reports and websites of 19 Islamic
banks. It was found that Islamic bank disclosures emphasized their religious character through
claims that they adhere to Shanias teachings. Adams et al 1998 UK analysed the factors leading
to various social disclosure practices among industries. They used content analyses on one
hundred and fifty annual reports of Netherlands, Sweden, Switzerland, France, Germany and UK
to verify the level of disclosures. It was identified that industry grouping was among the factors
that significantly affected social accounting disclosure practices.
According to Bayoud , N ,S et al 2012, there is positive relationship between industry type and
the level of corporate social disclosure practices. Their study showed that highly environmentally
sensitive industries have high levels of social disclosure practices compared to insensitive ones.
Pled V and Latridis G E 2012 also found out that more environmentally sensitive firms such as
those that produce harmful products are more likely to disclose a higher level of social
accounting. In Sweden, research which was done by Tagesson, T. et al. (2008) grouped industry
type using the divisions by the Scandinavian Information Exchange and came up with eight
industries. The findings of the research were that there are significant variences in the disclosure
of companies in different industries.
Policies adopted by companies in each industry also lead to different accounting disclosure
practices. Compliance by different industries to international social standards contribute to these
variances. This was supported by the study of Tungrhapheephakon 2001 who provided that the
international board had given pressure on the Thailand Ministry of industry to introduce
measures which provide guidelines for organisations for an advanced socially and
environmentally sound business practices.
Social disclosure is also affected by the industry a company operates in. Gangi and Trotta C 2013
carried out a univariant and multivariate analysis of the data which was found on the annual
reports of companies and he concluded that the extent of social accounting disclosure practices
depend on the reputation of the industry. According to Gamerschlag R et al 2010 industry
membership affects the amount of corporate social disclosure practices. They noted in their study
that firms from polluting industries tend to have a high level of social and environment.
Corporate characteristics also have an influence on social accounting disclosure practices. Lu Y
23

and Abeysekera 2014 examined influences of corporate characteristics on social and

environmental disclosure practices of the Chinese listed firms. He carried out a content analysis
on annual reports and he found out that there existed a positive relationship between industry
type and corporate disclosure practices.
Poter and Krammer 2002 found out that industries with higher accountability to public
controversy have high levels of social accounting disclosure. It was also noted that differences in
exposure created variances in social disclosure policies for firms in different industries ( Amato
and Amato 2007 ). Innovation and differentiation of industries also tend to affect level of
disclosures. It was argued by Hull and Rothenberg 2008 that industry with low innovation and
differentiation tend to have low corporate social disclosure compared to companies with high
levels of differentiation and innovation. This is so because companies with low innovation may
not recognise corporate social disclosure practices provided there exist high levels of competition
influencing the companys performance.
The level of leverage of the companies classified in a certain industry also affects the level of
social accounting disclosure. According to Mahadeo, J.D. et al. (2011) leverage is positively
related to environmental, health and safety disclosures. This research suggested that higher
leverage leads to higher social visibility which will compel these companies to make social
disclosures to reassure stakeholders. Research by Yulita, L. (2010) showed that leverage
significantly impacts on the companies social responsibility. This was also supported by Fuertes,
T.A. and Garcia, C.L. (2013) who found that leverage is favourable since it explains information
provided by firms related to their social activities.
However the study which was done by Lucyanda, J. and Siagian, G.P (2012) showed that
company leverage signifies no relationship on corporate social responsibility. This was supported
by (Chek, I.T. 2013), Echave, J. and Bhati, S.S. (2010), Istianingsih, M.S.Ak. (2013) who found
that there exist no correlation between corporate social disclosure level and company leverage.
Uwuigbe, U. and Egbide, B (2012) observed that there exists a significant negative relationship
between firms financial leverage and the extent of corporate social responsibility disclosures.
The research suggested that firms with high debt profile and a higher risk of insolvency would be
not willing to engage in extra costs on corporate social and environmental issues.

24

The level of social disclosure among industries is also affected by, whether the companies
operating in different industries are local or foreign companies. According to Blonigen, B. and
OFallon, C. (2011) it was noted that foreign firms consider corporate social responsibility
activities for public relations when they face higher extents of local scrutiny. In Malaysia, an
article by Lemarie, M. (2013) revealed that the level of money spent on corporate social
responsibility activities in Malaysia in 2012 came from foreign firms with a presence in
Malaysia. She also noted that the majority of local companies were not being socially
responsible.
According to Neff, R. (2011) local firms in Korea were being more socially responsible than
foreign firms. The article revealed that most of the foreign firms earnings were directed to
shareholders as dividends whilst shares to Korea were 0.32 percent. On the other hand Korean
firms have much more corporate social responsibility with Samsung group affiliate donating ten
percent of its profits to the regional society.
However Yussof H et al 2012 conducted a research on the relationship between social accounting
and industry type. He used the SPSS to analyse data found. He concluded that there exists a non
significant relationship between industry type and social accounting disclosure. Yaftian A et al
2012 also aimed to investigate the existing relationship between industry type and social
accounting disclosure practices. He carried out a descriptive analysis on the data and applied
multiple linear regression techniques. He found out that industry type was not significantly
related to overall social accounting disclosure practices.
2.3 CHAPTER SUMMARY
Having critically assessed the literature associated with social accounting and industry grouping,
it can be evidenced that the two work hand in hand. The literature provided evidence that social
accounting disclosure is signified by industry grouping, it also brings attention to the relevant
authorities in Zimbabwe to introduce measures towards improving the field of social accounting
disclosure practices. The empirical part of the literature was also considered, that is the past
studies carried out on social accounting and industry grouping.

25

CHAPTER III
RESEARCH METHODOLOGY
3.0 Introduction

26

In this chapter the methodology used to carry out the study is explained. It highlights the
research design, the research population and sample, research philosophy, data collection
methods and, the instruments used in the research, focusing on the merits and demerits of each
method used. The chapter also looks at the data analysis and data validity. It will end by giving a
summary of the whole research methodology.
3.1 Research philosophy
The exploration of philosophy is significant with particular reference to the research
methodology. It helps the researcher to refine and specify the research methods to be used in the
study, that is, to clarify the overall research strategy to be used. This would include the type of
evidence gathered and its origin, the way in which such evidence is interpreted and how it helps
to answer the research questions posed. Knowledge of philosophy will enable and assist the
researcher to evaluate different methodologies and to avoid inappropriate use of particular
approaches. Positivism adopts a clear quantitative approach to investigating phenomena as
opposed to post positivism approaches which aim to describe and explore in depth phenomena
from a qualitative perspective. In this study a quantitative approach is to be adopted.
3.2 Research design
The research design refers to the planning of the approaches to solve a research problem, it is in
itself a master plan specifying the methods and procedures for collecting and analyzing needed
information Zikmund (2000). It gives a framework of the research plan of action. There are
many types which include exploratory, conclusive and descriptive research designs.
The research design used is the quantitative research design. The design tried to describe the
effect of industry grouping on social accounting disclosure practices. It is flexible in terms of
data gathering techniques and yield quality information therefore reliable. It is often used to
generalise findings such as those obtained through questionnaires and interviews. The
quantitative approach provides an unbiased and legitimate answer to the hypothesis tested.
This approach was considered relevant for the study as it can be applied to published documents
of sample companies of the population. The approach is descriptive in nature and usually

27

presents the findings in numbers, figures or statistical parameters. Quantitative research design
uses structured research instruments for data collection.
3.3 Research Population
The populations selected in this study are companies annual reports of either 2012 or 2013
depending on the accessed report for each company of the fifty listed companies from eighteen
different industry types of the Zimbabwe Stock Exchange.
3.3.0 Research Sample
In order to gain the advantages of an in-depth study and effective coverage, samples are drawn
from companies listed on the Zimbabwean Stock Exchange. Fifty companies are considered
using stratified random sampling method. Stratified random sampling was used because
companies listed fall under different industry types. Industry type was used as an appropriate
attribute to come up with a stratum from which the sample elements were drawn. This attribute
was found relevant to the study because it enabled the researcher to appreciate views from
various companies on social accounting disclosure practices in their respective industry groups.
All the eighteen industries were drawn. In order to select samples within the industries, random
selections of all companies belonging to each group were conducted.
The simple random sampling gives each subject of the study population an equal chance of being
selected, thus free from bias and favour (Ujo, 2004:145). The sample size represents about
80.6% of population of listed Zimbabwean companies on the ZSE. Selection is based on an effort
to maintain an industry mix representative of the listed Zimbabwean companies.
3.4 Research instruments
Structured research instruments in form of annual reports content was used in this research.
Annual reports were used because they were considered to be the main document used by
investors to make investment decisions (Deegan and Rankin 1997). The annual reports were
downloaded from the company websites.
3.5 Data collection procedure

28

This study used the scoring method and the content analysis procedure to measure social
accounting disclosure. The content analysis method was chosen due to its ability to analyze
different types of communication tools including those in written code. It was also used due to
the fact that this study focused on one document which is the annual report. The social
accounting themes to be used for scoring include community involvement, environmental
disclosure, human resources, employees and consumer disclosures.
A one is awarded for disclosure of a theme and a zero for non-disclosure. A disclosure index is to
be used to determine the percentage disclosure per each company of all the themes. Percentage
of disclosure of each industry is arrived at by finding the average percentage disclosure of the
companies falling in that particular industry.
In order to extract the social disclosure information themes, all areas (financial and non
financial) of the annual reports were considered that is, chairmans statement, reports of
directors, report of auditors, audit committees report, corporate governance report, statement of
accounting policies, profit and loss account, balance sheet, statement of cash flows, note to the
accounts, statement of value added, year financial summary, graphic illustrations, financial ratios
and notes.
This method of data collection is classified under secondary sources of gathering information.
Secondary data was chosen because it is easy to collect since the researcher had no much time to
go for interviews and questioners and as well it is comprehensive and presented in such a way
that one can get the relevant information and leaves the rest. However this data collection
procedure is challenging in a way that some of the data is so comprehensive and it takes time to
sift as the researcher read the whole annual report in search of social disclosure practices.
Information can also be collected using the primary sources. These include interviews and
questioners. Interviews allow for probing to acquire full understanding of responses to ensure
correct interpretation however it was neglected as it posed challenges to the researcher in that it
is time consuming, can be very expensive, low geographical coverage, respondent bias (tendency
by respondent to impress or create false personal image).The respondent can feel embarrassed if
asked personal questions and that data analysis may pose some serious challenges as well.

29

Interviewers have to undergo intensive training to ensure they ask questions in the same manner
which may be very costly.
Questionnaires though they allow comparison of different responses to the same questionnaire,
they were not used in this study since they required a high level of motivation for the
respondents to share information, they are characterised by a low response rate, responses may
be delayed, it assumes no literacy problems, the researcher does not have control over who
actually completes it and incomplete questionnaires may be returned to the researcher.
3.6 Data validity
The analysis of annual reports carried out by the researcher was valid and reliable since the
researcher extracted information directly from the published audited annual reports. The
researcher made significant efforts to make sure that the reliability of instruments remained high .
An un-weighted CSRD index is used to provide an evaluation of corporate social disclosure
which treats all items equally where an item scores 1 if it is disclosed and 0 otherwise implying
that all items are equal in importance. According to Khasharmeh,H.A. and Desoky, A.M. (2013)
this approach reduces subjectivity making the data more reliable.

3.7 Data analysis and procedure

Descriptive statistics are used to analyse the data using Statistical Package for Social Science
(SPSS) version 16.0. SPSS is a computer application that provides statistical analysis of data.
The variable review of the SPSS is used to define the dependent and the independent variables. It
is used to classify the variables name, label, size, type and alignment. Dependant variables such
as social themes disclosure and social overall percentage disclosures of companies and industries
were defined using the variable view. The independent variable of industry type and companies
were also defined. After the variable view, data for the defined dependant and independent
variables was now entered using the data view. From there the data was high lightened and
analysed using descriptive statistics. Then the researcher made use of percentage calculations to
make it easier to interpret data, a given percentage out of total population sample. If it is

30

presented in percentages, even the uneducated category can easily deduce the meaning of the
results.
The researcher made use of pie chart presentation because these facilitated summarization and
communication of the meaning of data.

3.7 Chapter Summary

The chapter outlined the research philosophy, research design, the sources of data, the techniques
of collecting data, as well as the research instrument used. The researcher appraised the
techniques used by justifying as to why they were used. The chapter went on to further explore
population and the samples used. It also outlined the data validity and data analysis and
procedures.
The quantitative research design was used in this research for the purposes of its flexibility and
its ability to yield quality information. A sample of 50 companies was taken from listed
companies on the Zimbabwe stock exchange which suited the purposes of the research and a
checklist was prepared on corporate social disclosure information that may be disclosed by the
companies in the sample. Secondary data from the annual reports of the sample companies was
used and content analysis applied to extract information on the extent of corporate social
disclosure. The statistical package for social sciences was used in the data analysis (SPSS).

31

CHAPTER IV
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.0 INTRODUCTION
This chapter presents the findings of this paper and analysis of these findings. Tables, charts and
graphs are used to present, analyze and illustrate data findings. An analysis of the impacts of
industry grouping on social accounting disclosure practices is made though comparing social
disclosure practices made by listed companies in different industries in Zimbabwe. Through the
techniques of descriptive statistics relationship between industry type and social disclosing is
analyzed and its strength assessed.
4.1 VARIABLES AND MEASUREMENTS
4Table 4.0 Dependant variable
Variable
Social

Items

Description
-community

accounting
disclosure

Reference

Measurement

involvement
5

-environmental
disclosure
-employee

Scores : % ratio
Cooke &
Hannifa (2005)

information
-human resources
-consumer
information

Community involvement
Community involvement disclosure focuses on the disclosures of the company implications to the
surrounding community. It includes health and education facilities, government campaigns towards
communities as well as donations to communities. This study considered the disclosures of
participation in government campaigns and community programmes including health and
education, as the themes representing community involvement disclosure.
32

Environmental disclosure
Environmental disclosure refers to the reporting of considerations of the operating firm to its
surroundings. The negative and positive impacts of the companys processes and products to the
environment. Environmental disclosure include, pollution disclosures, environmental campaigns,
disclosure on the cutting down of trees et cetera. This study considered only three aspects on the
environmental disclosure that is the disclosure of environmental protection programmes, raw
materials and environmental policies
Employee information
This refers to the disclosure of information that is related to employees of the company. Such
disclosures help in the motivation of employees thus leading to the accomplishment of targeted
goals as there will be more improved levels of the standards of working. This information includes
employees salaries, benefits, health and safety standards, employee appreciations and accidents et
cetera. This study considered the disclosures of health and safety, employee appreciation and the
benefits and accidents as the social accounting themes representing employee disclosures.
Customer information
Customer information refers to the disclosure of information that is customer related . the
disclosure of such information benefits the company in gaining more customers as it will be
highlighting the extent their customers will be satisfied of their products. Such disclosure includes
customer satisfaction and appreciation, the products, as well as awards. This study considered
disclosures of awards, customer appreciation and products.
Human resources information
Human resources disclosure refers to disclosures of training programmes, how the management is
acting towards the leading the company.

Table 4.1 Independent variable

33

Variable

Items

Description
Reference
-Banking &finance

Measurement

-Beverages
Industry type

18

-Tourism

ZSE website;

-Engineering

http://www.

-Agricultural
-Mining
-Food
-Pharmaceuticals
-Insurance
-Retail
-Building &
Assorts
-Printing & paper
-Technology
-Property
-Industrial holding
-Agri-industrial

4.2 DATA FINDINGS AND ANALYSIS

Table 4.2 demographic analysis

34

Ordinal

Industry
Beverages
Tourism
Engineering
Agriculture
Mining
Food
Pharmaceuticals
Insurance
Retail
Building
Transport
Printing
Technology
Paper & packing
Property
Industrial
Agri-industrial
Banking &
finance
Total

Companies in industry

Sample

Number
2
2
4
7
4
3
1
5
4
2
1
1
1
2
4
7
2
6

Percentage
3.23
3.23
6.45
11.29
6.45
3
1
5
3
3.23
1.61
1.61
1.61
3.23
6.45
11.29
3.23
9.68

Number
2
2
3
6
4
3
1
5
3
1
1
1
1
1
4
6
2
4

Percentage
4
4
6
12
8
6
2
10
6
2
2
2
2
2
8
12
4
8

62

100

50

100

Source: developed for the research

Based on the table above the agricultural and the industrial holding industries hold a greater
composition of companies listed on the ZSE constituting 11.29%. They are followed by the
banking and finance industry with 9.68 %. The beverage, tourism, building and associates,
packing and paper, agri-industrial all constitute 3.23 % of the ZSE listed companies. The
pharmaceuticals industry is the lowest with only one company which active on the ZSE.
The pie chart below summarizes the forms of disclosure by companies

35

Figure 1
The pie chart in figure 1 above shows that the most used form of reporting by companies is the narrative
form since from the above figure it constitutes 52% of the sampled companies, the narrative form only
gives a description of what the organisation has done as much as social practices are concerned , while 36
% of the companies disclose using non-monetary forms, 8% discloses using monetary forms , monetary
forms include sums of funds used to contribute towards social accounting that is in terms of donations,
awards and even costs related to social issues . Only 4% used photographs, photograph presentations
include images of built institutions, schools, hospitals, orphanage homes, images of awarded certificates
or images of cheques donated, products being manufactured, employees safety equipments etc.

Table 4.3 Results of social themes disclosure by companies

Themes

Items
Participation in

community
involvement

government campaigns
Community programmes(

Score

% score
16

32

26

52

health & education)

36

Average % score

42

Environmental policies

environmental

raw materials
Environmental protection
programmes
Employee appreciation

employees

information on
accidents /benefits
Health & safety standards
Customer satisfactions

customers
Human
resources

Products
Customer
awards( promotions)
Human resources

23
12
15

46
24
30

50
14

100
28

24
43
26
1

48
86
52
2

44

88

participation &

33

58

46

88

appreciation

Table 4.3 shows social disclosure practices by companies. The disclosures were divided into five
themes which are community involvement, environmental disclosure, employee information,
customer information and human resources disclosure. Under community involvement 16 or
32% companies disclosed on information regarding participation in government campaigns while
26 or 56 % disclosed on community programmes such as education and health.
For environmental disclosures 23 or 46 % disclosed on environmental policies, 12 companies or
24% disclosed on raw materials and 15 companies or 30 % disclosed on environmental
protection programmes. On employee disclosure of information all the sampled companies
disclosed on employee appreciation, 14 companies or 28 % disclosed on employee benefits and
accidents while 24 companies or 48 % disclosed on the health and safety of employees.
For customer information 43 or 86 % disclosed on customer appreciation, 26 or 52 % disclosed
on products whist only 1 company disclosed on customer awards. Lastly 44 companies or 88 %
managed to disclose on human resources social disclosure practice.

Table 4.4 Descriptive statistics for social disclosure practices by companies

37

Descriptive Statistics
N

Minimum

Maximum

Mean

Std. Deviation

Community involvement

50

.60

.405

Employees information

50

.96

.298

Human resources

50

.98

.174

Environmental disclosure

50

.52

.595

Customer information

50

.90

.303

Valid N (List wise)

50

The statistics above illustrate higher disclosure on employees information (mean of 0.96),
human resources (mean =0.98), customer information (mean=0.90), environmental disclosure
(0.52), and community involvement (mean=0.60). The maximum and minimum values of all
themes are 1 and 0 respectively. The noted differences in means signify different disclosures
among different companies.
Figure 4.0 The pie chart below shows overall disclosures social disclosure by industries

Figure 2

38

From the pie chart above the mining and agricultural sector have the highest social disclosure
level constituting 90% and constitute 8% of the pie chart area. The industrial holdings
,engineering and the agri-industrial all constitute 80% social disclosure level and constitute 7%
of the pie chart area, retail industry have 73% disclosure, and carry 6 % of the chart area
insurance have 72% ,while the banking and finance ,beverages ,food and property have 70%
social disclosure, building and associates have 68 % , paper &packing have 65% ,printing
&publishing ,technology and pharmaceutical all have 60% social disclosure ,transport have 40%
disclosure and the lowest rated is the tourism industry which has only 20 % social disclosure
and constitute 2% of the pie chart area .Disclosure percentages differences signify relationship
between industry type and social disclosure.

Table 4.5 Descriptive statistics of the social disclosure by industries

Descriptive Statistics
N

Minimum% Maximum%

Social disclosure score

18

Valid N (list wise)

18

25

90

Mean%
67.78

Std. Deviation
15.847

The statistics above show that the minimum disclosure of the 18 industries is 25% and the
maximum percentage disclosure is 90%. The mean disclosure is 67.78%. The difference in social
disclosure percentages signifies the relationship between industry type and social disclosure
practices.
4.3 CHAPTER SUMMARY
The study investigated social disclosures for the year 2013 of the Zimbabwean listed companies.
Themes of social accounting and their locations in the annual reports were examined using
content analysis in the annual reports of fifty companies. These companies covered eighteen
industries which are found on the Zimbabwean stock exchange. The study revealed that most
companies use the narrative way of disclosing social information, since its constituting 52% of
the sampled listed companies, and very few companies use photographs with 4%.

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The averages scores of disclosures basing on social themes were community involvement =42%,
environmental accounting=33%, employees information =58%, customer information 46% and
human resources =88%. The descriptive statistics of disclosure of themes by companies revealed
the highest mean to be 0.96 and the lowest to be 0.52. The descriptive statistics of disclosure by
industry showed a maximum percentage of 90 % for the agriculture and mining sectors and a
lowest percentage of 25% for the tourism sector.
The analysis done revealed that the mining and the agriculture sectors had a higher disclosure
percentage of 90 % and the tourism sector had the lowest percentage.

CHAPTER V
SUMMARY, CONCLUSSIONS AND RECOMMENDATIONS
5.0 INTRODUCTION

This chapter presents a summary of the major findings of this research, followed by conclusions.
The conclusions presented then culminate in policy recommendations in line with the research
findings. This chapter seeks to give summary of findings, recommendations and to make

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concluding remarks on the subject under probe. The recommendations were made based on the
information gathered and the findings made during the research.

5.1 SUMMARY
Chapter one considered the general introduction; the research background, problem statement,
research, questions and hypothesis, research objectives, significance of the study, limitations, and
delimitations. Chapter two covered a detailed review of related literature. It covered the
theoretical framework of industry grouping, social accounting and social accounting disclosure,
empirical studies on the relationship between industry type and social accounting disclosure
practices. Chapter three outlined the research methodology used in data gathering, analysis and
presentation. Chapter four presented the findings, analysis and interpretation of such. Chapter
five then concluded the research with summary and major findings, conclusions and
recommendations to the ZSE listed companies, and the Government, to what can be done to
improve the social disclosure practices among industries.
The result of companies industry types tend to be related to social disclosure practices since
notable differences in percentage disclosures were identified. The positivity of the industrial
impacts on social disclosure practices were identified due to the differences in public exposure
which created differences in policy ways of companies. It can be concluded that higher levels of
public exposure enables the company to be more socially concerned (Porter et al 2002) ,
( Sembiring 2005) and (Amato et al 2007) .
5.1.0 Implications
The study provide information which could help in the understanding of social accounting
disclosures and industry grouping of the Zimbabwean listed companies as well as their
relationship. As discussed in chapter four the findings of the research provided a positive
relationship between industry type and social accounting.
5.1.1 Limitations
The research only used the industries found on the stock exchange classifications and the other
industry types of companies not found on the stock exchange were ignored which may lead to

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insignificant results on the hypothesis that there exists a relationship between industry type and
social accounting disclosure.
The other limitation is that only the 2013 financial year annual reports were used, comparisons
with other financial years was restricted , thus the results do not wholly show the changes and
developments of corporate social disclosure in industries over time. To add, corporate social
disclosures are still at low levels in Zimbabwe, which makes it difficult to examine corporate
social disclosure practices over a long period of time.
Lastly the study only used the annual reports as the sources of data. There exists possibility that
that some of the social accounting practices were partly disclosed due to the availability of other
media used for communication. These include the interim financial reports and social reporting
articles.
5.2 CONCLUSSION
Many studies have been carried out with a view to analyze and come up with increased
recommended levels of social disclosure practices. In contrast the Zimbabwean listed companies
reveal an average disclosure of social accounting regardless of the increasing challenges which
are facing the majority of these operating firms..
According to this study managers should strive their best to seriously consider social disclosure
practices as tool to conduct more valuable social and environmental grounds as it influences
reputation of companies, attract investors.
Social accounting from the study had been favorably being disclosed in developed countries than
developing ones. It can also be concluded from the research that more of the social disclosed was
in narrative form. Many studies have been carried out on the relationship between social
accounting disclosure and industry grouping as reveled in chapter two of the research. Noted
differences among different industries are caused by differences in financial performances,
nature of industry, differences in profitability levels, differences in operating systems,
governmental links , stakeholder handling , et cetera. The findings in chapter four of noted
differences among industries bring an overall conclusion that industry grouping impacts social
accounting disclosure practices of the Zimbabwe Stock Exchange companies

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5.3 RECOMMENDATIONS
For further research

It is recommended that future studies should consider non-listed and listed companies as
samples for the study.

The researcher to also investigate the subject matter in other countries so that meaningful
conclusions can be derived across various investigations on good performing, average
and poor performing industries on social accounting disclosure.

It is also urged that researches in the future should increase the number of social themes
to be checklisted, for more detailed results.

To the government

Make conscious efforts to introduce legislated innovative initiatives towards social

accounting disclosure practices in Zimbabwe.

It must establish social disclosure procedures to be followed by companies which meet

the requirements of all stakeholders, and which maintain the sustainability of the
companies as well as their going concern as far as social accounting practices is
concerned.

To the university

Efforts should be made to increase the books in the school library which have a greater
depth of social accounting.

There is also need for workshops regarding social accounting to be conducted by

accounting students, for a broader knowledge of all aspects of the accounting profession.

To the policy makers

Policies regarding emphasis on social accounting disclosures should be implemented to

companies so as to increase the levels of social accounting disclosure among industries.

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