Nowadays, there has been an emergent interest as regards to the impacts that corporations have on society and this has lead to an increase demand of corporate social disclosures (CSD). Stakeholders are not only considering the financial information but they are also valuing the approach enterprises meet their social responsibilities. It is also declared by Faux (2012, p.284) that a shifting requirement are drawn out by users on reporting since they are not merely paying attention to financial and economic performance but as well giving importance to the social performance of a corporation.
Generally CSD is defined as the "process of communication the social and environmental effects of organisations' economic actions to particular interest groups within society and to society at large" (Gray et al., 1996, p.3). CSD is also referred as corporate social responsibility (CSR) disclosures, social and environmental disclosures, social responsibility disclosures, CSR reporting and sustainability reporting. There is no unique definition for CSR but normally it is a term used to describe how corporations interact with the society.
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In recent years, corporations are under increasing pressure to provide CSD due to the establishment of numerous guidelines and codes that are set up to enhance corporate transparency and accountability. The Global Reporting Initiative (GRI) founded in 1997, has developed procedures for preparing social or sustainability reports. GRI promotes CSD practice to the maximum "standards of rigour and comparability" (UNCTAD 2004, p.89). Even in a developing country like Mauritius, the Code of Corporate Governance (2004) as per section 7 requires corporations to deal with sustainability reporting on comply or explain basis in respect to environment, social, ethics and health and safety issues. The CODE is voluntary but with alteration of Financial Reporting Act 2004 in 2009, the CODE is now made compulsory to all Public Interest Entities (PIEs).
CSD is also a fundamental technique for corporations to communicate to users of accounts on actions undertaken about their increased concern on social and environmental performance in the society. Many corporations engaged in publishing an increasing number of reports on their social performance and show they are more conscious as well approachable to the sustainability issues. These reports hold several tags which are usually known as the "sustainability reports" and "social or environmental reports" (UNCTAD 2004, p.11). Accordingly, CSD is expected to provide useful information to users by allowing them to execute economic decision making.
Importance of study
In Mauritius, there is little discussion about CSD within the annual reports of corporations. So far, the studies which include disclosure of CSR in corporate annual reports had carried out by Mahadeo et al. (2011) and they used content analysis to assess the level of CSD of Mauritian listed companies. A further attempt had made Ramdhony and Oogarah-Hanuman (2012) that considered the accountants' standpoints on improving the CSR reporting in Mauritius.
Additionally, the decision usefulness of traditional annual reports to users had previously examined by Mitrasingh (2006) but no assessment had been done to date with respect to the decision usefulness of non financial information aspect which is CSD in herein situation.
This study therefore adds to the extant literature on CSD in corporate annual reports in a various ways. Since it will provide evidence on users' perceptions about the significance of CSD and whether this disclosures within annual reports aids in the decision making process in a developing economy. This can also be beneficial to PIEs and other policy makers in Mauritius to know how far CSD within the annual reports are satisfying users' information needs in respect to companies' engagement to the society. Furthermore, it provides users' viewpoints on certain key issues that companies need to address regarding CSD within annual reports as suggested in this finding.
Aims and objectives of study
This research aims to investigate certain users views' represented by a group of accountants and accounting students, on the significance of CSD within the annual reports of Mauritian listed companies (MLC) and assess to what extent these disclosures are useful for decision-making process.
The objectives and aims of this study are as follows:
To examine to what extent the different CSD themes which include environmental, social, ethics, health and safety considered to be of importance to users in MLC' annual reports.
Always on Time
Marked to Standard
To assess how far CSD are decision useful that entails the information qualitative characteristics such as clarity, reliability and comparability within the MLC' annual reports.
To analyse usefulness of CSR disclosures provided within the annual reports of MLC for certain major decision-making activities.
To find out the underlying reasons why social information disclosed in MLC' annual reports, appears to hold certain shortcomings for decision-making process.
To recommend on improvements that can be brought in the context of CSD provided within the annual reports of MLC.
Structure of the Thesis
The study has been planned in six chapters and each section will address these key aspects as organised below.
Chapter 1: Introduction provides a brief background on CSD as well gives the research justifications and convey the objectives that will be examined under this study.
Chapter 2: Overview of CSR in Mauritius points out the regulation pertaining to CSR in Mauritius and introduces a background of MLC together with the legislation requirements with respect to CSD within their annual reports.
Chapter 3: Literature Review defines the key terms of this study and explains theoretical concepts surrounding the relevance of CSD. It further explores different studies into CSD and provides empirical findings which are linked to the research aims.
Chapter 4: Research Methodology describes methods employed together with the procedures undertaken to collect data for this research and considers the study's limitations.
Chapter 5: Analysis and Findings reveals the statistical analysis of data collected and presents relevant results in comparison to empirical findings discussed in the literature. It also performs analytical test to verify the hypothesis developed for this thesis.
Chapter 6: Conclusion presents a summation of the study which highlights major findings discovered in this research and provides suggestions that could be brought in forthcoming study.
Chapter 2: Overview of CSR and its related disclosures in Mauritius
2.1 The context of CSR in Mauritius
Mauritius is amongst one of the developing countries that given a statutory requirement for CSR initiatives as all registered  companies are required to contribute 2% of their book profit of the former year to a CSR fund. The National empowerment foundation issues the CSR guidelines in Mauritius. Moreover, the National CSR Committee provide an approved list of programmes that had subjected to be finance by a CSR fund and the approved programmes shall include one of the following areas of participation:
Socio Economic Development- Code 200
Health- Code 300
Leisure and Sports- Code 400
Environment- Code 500
Education and Training- Code 600
Calamities- Code 700
CSR is not a new phenomenon in Mauritius as the CSR initiatives can be tracked relatively 20 years back by the Mauritian corporate according to Deloitte (2008) survey. Following to the survey, 39% of the corporation's engaged in CSR activities since their start up and 25% of the companies had recently adopted the CSR initiatives. Additionally the Deloitte report revealed Mauritian enterprises undertake CSR actions for numerous reasons that include to be socially responsible, to enhance the well being of society and as well to improve their companies' image. According to Gokulsing (2011), local firms that employ CSR schemes cover a wide range of sectors in Mauritius.
2.2 CSR disclosures in Mauritian listed companies (MLC)
Mauritian companies listed on the stock exchange operate under several major sectors of the economy and since 1989 these corporations are into operation. The Stock Exchange of Mauritius LTD operates currently under two markets that comprise the Official Market, and the Development & Enterprise Market. For years, the number of listed companies had increased significantly and actually 42 listed companies operate on the Official Market leading a market capitalisation  of almost US$ 6 billion as at 31 January 2013.
In accordance with section 1 of the Code of Corporate Governance (2004), it expects all companies listed on the official list of the stock exchange of Mauritius to comply with the provisions of the code on comply or explain basis. Additionally the Financial Reporting Act 2009 made the CODE mandatory for MLC as per section 75 of the Financial Reporting Act 2004 which had revised in July 2009 that necessitates the corporations to demonstrate a corporate governance section within their annual reports.
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As regards to the CSD within annual reports, section 7 of the Code of Corporate Governance (2004) concerns the Integrated Sustainability Reporting and further provides guidelines on four keys themes. The CODE necessitate under section 7.2, that each corporation should regularly that is at least yearly give an account to its stakeholders on its policies and practices with regard to ethics, environment, health and safety and social issues.
Moreover, each CSD themes are governed and explained under the following sections as per the CODE:
Section 7.3: provides guidelines on the ethics disclosures and elaborate that every company should adopt a Code of ethics in order to set clear corporate values and standards of behaviour in its dealing. Company requires adopting ethical practices together with the application of honesty and integrity within its business environment.
Section 7.4: relates to the procedure on reporting of environmental issues and make clear that companies shall actively involved to manage their activities and minimise any negative impacts on the environment.
Section 7.5: deals with the health and safety disclosures that necessitate companies to build on and execute safety, health and environmental policies and procedures to at least act in accordance with exiting legislative and regulatory frameworks.
Section 7.6: address to the social issues and requires Mauritian companies to maintain social harmony over their employment strategies and ownership composition. The companies also shall adopt fair polices in staffing and promotion as well undertake procedures which are equally transparent and based on value.
MLC mostly made CSD available via their annual reports as figured out in the survey of Ramdhony et al. (2010). As their finding shown that 78.6% provide CSD through annual reports, 64.3% published it in standalone report, 57.1% use the internet web pages, 50 % adopt company brochures, 50% rely on advertisement and 14.3% use other modes.
Furthermore, in a recent study it was revealed that MLC increasingly provide CSR disclosures within their annual reports as confirmed by Mahadeo et al. (2011, p.545) that conducted a content analysis of CSD within the MLC' annual reports from 2004 to 2007. Their findings revealed the levels of CSD themes are increasing significantly since they discovered there is an augmentation in the volume and variety of CSD supply by these corporations.
3. Literature Review
This section provides an overview under the concept of CSD and presents the prior studies together with the empirical findings to illustrate its importance and decision usefulness.
3.1 Defining key words
3.1.1 Corporate social disclosure (CSD)
The term CSD had defined in several ways and it can be derived in definitions contributed by different authors. The most widely used definition for CSD has previously defined by Gutherie and Mathews (1985 cited Hackston and Milne 1996, p.78) as follows:
"Provision of financial and non-financial information relating to an organization's interaction with its physical and social environment, as stated in corporate annual reports or separate social reports"
Branco and Rodrigues (2006, p.245) further described CSD as "information about companies interaction with society and it is an important instrument in the dialog between business and society."
CSD had known under several themes and Othman et al. (2011, p.121) argued that the contents of CSR disclosures remain voluntary. The nature of CSD had been identified under the CSR Framework as developed by Ernst and Ernst (1978 cited Mouraby 2007, p.23). CSD practices are mostly defined as per the early survey of Ernst and Ernst (1978 cited in Hassan 2010, p.17) that classified CSD themes under the following areas:
Environment (pollution control, prevention of nature destruction, protection of environmental resources, and other ecological revelation);
Energy (energy saving and other disclosures that relate to consumption this of resource);
Fair business practices (recruitment and advancement of special interest groups, socially responsible practices, and other declaration on fair practices);
Human resources (employee health and safety, worker training, and other disclosures that guarantee the well-being of employees);
Community involvement (wellbeing activities, education and arts, and other activities disclosures in participation for the benefit of community);
Products (safety, reducing pollution from product utilization and other product-related disclosures) and
Other social responsibilities disclosed.
3.1.2 Decision usefulness
Decision usefulness describes useful information as that being relevant to economic decision-making as per Faux (2012, p.286). The concept applied to establish whether the financial reporting allow decisions that assist the realization of some goals (Joseph 2002, p.104). The other words to decision usefulness comprise of "user utility" and "usefulness and use" (Faux 2012, p.287).
3.1.3 Annual report
Walden and Stagliano (2003, p.138) defined annual report as an enterprise most significant communication vehicle that are use by corporations to portray financial health of the firms and their act in the environmental, social and corporate citizenship matter.
Gray et al., (1995a, p.82) further summarised annual report as follows:
"the annual report not only is a statutory document, produced regularly, but it also represents what is probably the most important document in terms of the organization's construction of its own social imagery".
3.2 Theoretical rationale behind corporate social disclosures
There are several theories that had attempted to explain the theoretical relevance for the provision of CSD which are described under the following four perspectives:
3.2.1 Social Contracting Theory highlight corporations have a social contact with the community to execute particular duties within the bound of justice (Mathews, 1987 cited Tilt 1994, p.49). It intends to retain or demonstrate the notion that organisation's operations are in conformity with community expectation (Deegan and Rankin 1997, p.579).
3.2.2 Legitimacy Theory emphasis corporation perform some activity so as to achieve authority from community and to maintain good liaison with parties outside the company (Mirfazli 2008, p.396). CSD is an essential technique for organisations to create and sustain their legitimacy, giving a justification why organisations provide such disclosures (Hall 2002, p.5).
3.2.3 Stakeholder Theory suggests that corporation acts and reports in accordance to the needs and power of its stakeholders groups as per Ullman (1985 cited Mouraby 2007, p.13). The implication is that corporation should disclose both environmental and social issues within their financial reporting as maintained by Solomon (2002).
3.2.4 Decision Usefulness Theory considers not only investors but other range of users into the fundamental criterion that reveals accounting information should be useful for decision-making by numerous users (Tilt 1994, p.49). Organisations, therefore, engaged in CSD seeing that users find it useful for their decision-making process (Deegan and Rankin, 1997; Solomon and Solomon 2006).
3.3 Prior Studies on CSD
The topic under CSD has formerly been addressed in several research papers and Deegan (2002, p.288) summarised these research as being descriptive, normative; positive in nature as well others tend to be theory-building. Moreover, Gray et al. (1995b, p.50) had identified and categorised CSD research under the following three broad studies: decision usefulness studies, economic theory studies, and social and political theory studies. Gray et al. (1995b, p.50) further explained decision usefulness was either in "ranking" studies where participants are asked to rank various accounting information in respect of perceived importance or the investigation of disclosures effects on share price behaviour.
The studies on decision usefulness of CSD had been examined in a survey, market reaction, and experimental studies as indentified by Milne and Chan (1999 cited Branco and Rodrigues 2007, p.77). The "survey" studies have focused on carrying out survey of potential users of information as explained by Branco and Rodrigues (2007, p.77). Certain surveys have investigated the importance and decision usefulness of CSD to a single group of users that include (Buzby and Falk, 1978; Teoh and Shiu, 1990; Epstein and Freedman, 1994; Solomon and Solomon, 2006; De Villiers and Van Staden, 2012; De Klerk and De Villiers, 2012). While other studies focused to several users of accounts such as (Tilt, 1994; Deegan and Rankin, 1997, Al-Khater and Naser, 2003; Yaftian, 2011; Wong, 2012).
On the other hand, "market reaction" studies focus had based on considering the market reaction on CSD (Branco and Rodrigues 2007, p.77). Deegan and Rankin (1997, p.564) argued several studies such as (Ingram, 1978; Anderson and Frankle, 1980; Shane and Spicer 1983; Blacconniere and Patten 1994) have focused on the stock market reactions of CSD. The "experimental" studies whereas had assessed the impact of CSD on investment decision (Branco and Rodrigues 2007, p.77) and include studies carried out by (Milne and Chan, 1999; Chan and Milne, 1999; Milne and Patten, 2002; Faux, 2012). According to De Villiers and Van Staden (2012, p.188) numerous "experimental" studies enquire participants like students, accountants, and analysts in alternative to investors on the effect of CSD to execute an investment decision and found CSD is used differently in the short term and long term investment decision making.
3.4 Importance of different CSD themes
3.4.1 Previous studies on importance of different CSD themes
Prior studies have as well scrutinized the importance of different CSD themes within annual reports. The study of Epstein and Freedman (1994) provided a single user's perceptions on significance of diverse CSD themes and found user ranked product quality as most important disclosures, followed by environmental, ethics, community involvement, employee relationship and others. In contrast, Yaftian (2011) figured out in Iran environmental disclosure was the most preferred theme to the broader user's groups and subsequently ranked human resource, customer satisfaction and product quality, community activities and energy consumption respectively. Alternatively in a developing country like Indonesia, Gunawan (2010) has surveyed stakeholders' perceptions to the most significant information upon CSD within the corporate annual reports and finding revealed every stakeholder hold different opinion and demand.
3.4.2 Empirical findings on importance of CSD themes
This sub-section provides empirical findings about the value of CSD themes to users of accounts. Evidence specifically relate on four key CSD themes as per section 7 of the Code of Corporate Governance (2004) in Mauritius that include environmental, social, health and safety and ethics disclosures.
In Australia, Deegan and Rankin (1997) surveyed five categories' users of accounts on the materiality of environmental information within annual reports. Results denoted that annual report is a key medium for environmental information and users do demand environmental disclosures within companies' annual reports. The majority of users (67.8 percent) expect environmental data from the annual report in contrast to minor groups makes use other means. Additionally many users' groups found to consider the annual report as a key source of information about an organisation's environmental performance in other studies (Tilt, 1994; Epstein and Freedman, 1994). For instance, Epstein and Freedman (1994, p.106) surveyed individual investors and the finding show (82 percent) of the users have strong requirement of environmental disclosures within the annual reports. But Chan and Milne (1999, p.254) found users response asymmetrically to the corporate environmental performance and as well Gunawan (2010, p.68) finding has not supported environment disclosure important to stakeholders in Indonesia.
Tilt (1994) had examined pressure groups for CSD and determines if they employ the social disclosures made within the annual reports. The authors deduced that community pressure groups were users of social information as finding indicated that (82 percent) read certain type of social information and (52 percent) of the surveyed groups are strongly looking for social disclosures. Since social disclosures within annual reports provide actions of the corporation in improving the quality of life of its workforce and the societal state of its surroundings (Gallego-Alvarez 2008, p.583). However, Milne and Chan (1999) study's revealed the investment analysts and accountants mostly unfavoured and disregarded narrative social disclosures within corporate annual reports.
Health and safety theme
This theme provides issue that help users of accounts to know on health and safety policies and practices adopted by the corporation, ultimately gain the confidence of wider society (Mouraby, 2007 p.24). Evidence shows in the survey of Rankin and Deegan (1997, p.577) that users of accounts valued health and safety issues within the corporate annual reports as well supported with facts that investors highly consider whether health and safety measures are undertaken by corporation. This type of information helps customers to determine that they use secure products (Gunawan 2010, p.63) and Cooper (2003, p.237) stated that health and safety information had considered being of importance by employees.
Ethics disclosures are also viewed to be of importance as pointed out by Mouraby (2007, p.24) since a corporate having a code of ethics or any form of disclosures on ethical principal can arouse trust in people as this demonstrate corporation has got good codes of conduct and is useful when trying to make an opinion of a particular company. Epstein and Freedman (1994, p.106) provided the confirmation that majority users desired corporate ethics disclosures within the annual reports. In addition, Creyer (1997, p.428) conducted a survey on whether firm's behaviour influences the purchasing behaviour of customers. The finding confirmed ethicality of firm's behaviour is an important criterion during the purchase consideration and they are likely to reward ethical behaviour by a motivation to pay higher prices for a firm's commodity.
3.5 Reasons for the significance of CSD in annual reports
Mandatory financial reporting lead to disappointments amongst various stakeholders and they claim corporation voluntarily supply more inclusive facts about their long-term schemes together with their actions as declared by Boesso and Kumar (2007, p.269). It is also maintained by FlÃ-strand and StrÃ-m (2006, p.581) that accounting information is being less relevant when there is a failure to embrace certain intangibles values in the financial statement. Thus, through disclosure of relevant information such as CSD can reduce information asymmetry and so increase the corporation transparency (De Klerk and De Villiers 2012, p.26).
John Elkington (1997 cited Bruce et al. 2012, p.3) introduced the triple bottom line also known as ''people, planet, profit'' and so to take account of corporate social responsibility in company's annual reports. Triple bottom line reporting try to response the growing demands of both community and business stakeholders in giving an account on environmental, social and economic impacts altogether as expressed by Storer and Frost (2002 cited Ramdhony and Oogarah-Hanuman 2012, p.197). Therefore, to some extent CSD bridges the gap on non financial issues (Ramdhony and Oogarah-Hanuman 2012, p.196) and this reduces uncertainty concerning a corporation's future which supplement truthful forecast to users for decision making (2010, p.4). Hassan and Harahap (2010, p.204) also argued CSD has an important role since it helps stakeholders in their decision making process.
There are numerous corporate means of communication for CSD such general media, environmental reports, advertising (Gray et al., 1995a, p.82). Nevertheless, annual report continues to be commonly the company's communication tool used and almost certainly the most important record in approach to acknowledge its social descriptions towards all stakeholders as declared by Gray et al. (1995a, p.82). Since, annual reports are easy to make comparisons due to it is made on a regular basis and is obligatory to all corporations to be produced by legislation (Tilt 2000, p.193). Moreover, it is relatively credible as well understandable compared to other media (Tilt 1994, p.56) and according to Arvidsson (2011, p.293) CSD is sufficiently reported within the annual reports.
In recent time, however internet and website had acquired recognition for CSD because it facilitates timely information, increases corporate transparency and accountability with regards to social and environmental issues (Cho et al. 2006, p.934). In the study of Craig and Bailey (1987 cited Deegan and Rankin 1997, p.566) users also revealed annual report in general had not been suitable means for communication of social information since they suggested CSR was poorly presented and communicated within this document. Ultimately users claimed that other booklet is appropriate to communicate corporate social information. But most of the recent empirical studies (Tilt, 1994; Epstein and Freedman, 1994; Deegan and Rankin, 1997; Yaftian 2011) evidenced annual report as the most suitable medium for CSD.
3.6 Decision usefulness of CSD
3.6.1 Qualitative characteristics for decision usefulness of CSD
Decision usefulness of CSD can be explained by the broadest range of qualitative characteristics and information that provides more qualitative characteristics are viewed to be more useful to stakeholders as indicated by Wong (2012, p.175). Crawford and Williams (2010, p.523) regard CSD should be timely, relevant and reliable. The GRI (2006 cited Wong 2012, p.120) considered the qualitative characteristics of CSD should be clarity, reliability and comparability. These qualitative features can be explained as follows:
Clarity: means user's ability to understand and effortlessly tells what they desired to know that it has a main role in making information understandable (Wong 2012, p.123). Furthermore GRI (2006, p.16) explained CSD should be reported in a mode that it is comprehensible, useable and easily available to stakeholders. The information should avoid jargon words and unnecessary facts (GRI 2006, p.16).
Reliability: entails information should support quality and materiality in order stakeholders can trust these disclosures and that this information can provide evidence (GRI 2006, p. 17). Therefore CSD should result in a way that user can consider the information to be faithful, consistent and complete which it intent to represent.
Comparability: implies information should present in a way that over time stakeholders are capable to indentify changes of the reporting entity and within the corporations as per GRI (2006, p.14). In orders words, stakeholders should be able to compare firm's CSR performance with respect to the firm past action and can be benchmarked with other entities (GRI 2006, p.14).
3.6.2 Empirical evidence on the decision usefulness of CSD
The survey of Solomon and Solomon (2006, p.573) provide confirmation that CSD was "decision useful and would continue to grow of importance and usefulness in the near future." In the same line, several studies found CSD decision useful to users such as (Deegan and Gardon, 1996; Deegan and Rankin, 1997; Deegan and Rankin 1999; De Villiers and Van Staden, 2010). Additionally, certain studies found CSD decision useful but inadequate (Solomon and Solomon 2006; Tilt, 1994).
Further enquiry had investigated the usefulness of social information in general with no assessment upon the diverse types of social information such as (Murray et al. 2006) and proved that social exposure has an impact on the market. While other surveys, for examples, (Epstein and Freedman, 1994; Patten, 1995) explored diverse kinds of social disclosures and discovered that not all social and environmental information had regarded as useful by investors.
Nevertheless some prior studies found CSD limited or moderate usefulness for user's information (Milne and Patten 2002, p.19). Gray et al. (1995b, p.50) also noted most of the past studies like (Belkaoui 1984; Firth 1978, 1979; 1984) have found CSD "moderately important" by the financial community. Moreover, the usefulness of social disclosures for investment decision-making had also been examined in Milne and Chan (1999) study to investment analysts and their findings revealed users perceived moderate usefulness of social information. Furthermore, Teoh and Shiu (1990, p. 71) concluded that social responsibly information disclosed in annual reports have limited impact on institutional investors' decisions.
3.6.3 Usefulness of CSR disclosures for certain major decision-making activities
CSD supports users in formulating more informed decisions about a company of concern. UNCTAD (2004, p.89) put forward that CSD aid in investment, staffing, buying and campaigning decision. This section therefore explores the usefulness of corporate social information for certain major decision-making activities.
CSR disclosures help users in making decision such as whether to buy, sell or hold equity instruments in a corporation (De Klerk and De Villiers 2012, p.21). In Qatar, users viewed CSR reporting is important since it assist investors to make investment decision (Al-Khater and Naser 2003, p.543). Moreover, evidence shows users employed social information for their investment decisions as revealed in finding of Epstein and Freedman (1994) and environmental information within the CSD theme has employed for investment purpose (Solomon and Solomon, 2006; De Villiers and Van Staden, 2010).
CSR disclosures help in staffing and retention of more talented employees (Samuel et al. 2004,p.423) because employees progressively cared more about organizational environmental performance to decide the organisations that they will supply their labour as maintained by Deegan and Rankin (1997, p.562). A study conducted by Simms (2002 cited Ramdhony and Oogarah-Hanuman 2012, p.198) discovered majority British businesses regard social responsibility will be further crucial in the future enrolment of workforce.
CSR reporting is beyond investment decision as confirmed in the finding published by Co-Operative Bank (2009 cited Wong 2012, p.89) that the notion of ethical purchasing is favourably revealed amongst customers and it had argued that CSD increase customers loyalty as per Samuel et al. (2004, p.423). Given that consumers are more increasingly sensitive and choosy to corporation's products with respect to their social and environmental actions (UNCTAD, 2004 p.5).
Supporting corporate running operations decisions
Users viewed CSD important to corporations so as to justify their continuation in society and their existence are validate as along they fulfil the objectives of citizens as confirmed in Al-Khater and Naser (2003, p.543) study. Therefore CSD leads to more supportive community (Samuel et al. 2004, p.423) and the willingness of wider community to endure and support corporation existence (O'Dwyer 2002, p.406).
3.7 Shortcomings linked with CSD for decision-making process
Although CSD are of importance and decision usefulness, still such disclosures appear to hold certain deficiencies for decision-making process. In general, CSD lack completeness in relation to full disclosure of ethical, social, environmental impacts as little coverage of negative impacts are disclosed by corporation according to Adams (2004, p.749). Moreover, disclosures are entirely in descriptive statements in making provision of "good" news only as confirmed in Belal (2001, p. 286) study. Given that CSD provided by corporations is predominantly voluntary information (De Villiers and Van Staden 2012, p.200) and so corporations do account for all its social, environmental, ethical impacts.
In a recent article Alon et al. (2010, p.18) further stated that CSD is a component of organisational marketing and could be served by corporation as a marketing strategy not merely to raise corporation's ethical standards but additionally improve the company image and prolong competitive advantage. Evidence shows in Ramdhony and Oogarah-Hanuman (2012, p.199) findings that CSR disclosures are viewed as a means to strengthen the corporation's required reputation.
Another main barrier to the advancement of social and environmental accounting is the failure to quantify impacts and performance in the matching objective mode as financial accounting (Epstein, 2003 p.20). The possible suggested reason could be so far "there still exists no universally accepted theoretical framework of corporate social accounting" on the word of Hackston and Milne (1996, p.78). Ultimately this makes the verification of CSD difficult as it can be undertaken in the auditing of financial statements (Epstein 2003, p.20).
In addition, the annual reports are claimed to provide very low levels of social disclosures as confirmed by Ahmad and Rahim (2005, p.13) in countries such as Jordan, Bangladesh, Malaysia and Singapore. Empirical findings from the users' perspectives also found CSD insufficient within annual reports (Yaftian, 2011; Solomon and Solomon 2006; Tilt, 1994). Friedman and Miles (2001, p.20) further supported that the content of CSD had been poor in quantity and quality as corporations revealed intensely qualitative, incomparable and least amount of CSR disclosures. Furthermore, CSD also result to be deficient in clarity due to the shortcoming of sounding like jargon (Clarkson 1995, p.98). For these reasons, CSD have certain shortcomings which consequently result in quality, consistency and comparability problems as declared by De Villiers and Van Staden (2012, p.195).
3.8 Recommendations on the improvement for CSD
As seen previously, CSD had certain drawbacks for the basis of decision making therefore this section discusses ways wherein CSD can be improved. Earlier, Craig and Bailey (1986 cited Deegan and Rankin 1997, p.566) surveyed a panel of users to investigate the ways social information could be improved within the corporate annual report. The recommendation provided by the panel had been in terms of visual stimuli, clear phrase, objective reporting, quantification, and chosen the establishment of legislation to address this issue.
In Mauritius, Ramdhony and Oogarah-Hanuman (2012, p.204) discovered guidelines for CSR reporting within the Code of Corporate Governance (2004) were limited since any standard had prescribed to be followed and they recommended specific guidelines could be drafted by a committee of experts. They further suggested the guidelines for CSR reporting in Mauritius could be based on GRI as it had launched to bring consistency in CSD. Their findings also revealed corporations need to respect the 'comply or explain' basis as required by the Code as well concluded the imposition of fines for both non-disclosure and disclosing false information can be adopted to improve CSD.
On the other hand, Al-Khater and Naser (2003, p.547) reported most of the users in Qatar prefer a law to support the disclosure rather than CSD to be enforced by the authorities. While, users in Iran considered mandatory CSD should be prepared as per government guidelines in order to improve accountability as per Yaftian (2011) finding. Furthermore, Tilt (1994, p.63) also gathered facts that community desired standards or legislation to be established so as to guarantee corporations are adhering to the responsibility towards society. As maintained by Walden and Stagliano (2003, p.138), through supplementary authoritative guidance CSD could result to be more informative and bring consistency within firms and comparability among firms.
Nevertheless, though there is the introduction of statutory regulations there is lack of compliance among corporations and guideline without auditing control and enforcement will not stimulate complete compliance as argued by Fallan and Fallan (2009, p.446). It is in line with Epstein and Freedman (1994, p.108) study, that evidenced users agreed these disclosures should be dealt by an independent accountant's verification. De Villiers and Van Staden (2012, p.200) findings also found CSD should be audited to enhance CSD though it is a costly solution. The audit procedures must however be directed by suitably qualified people that mutually understand the audit process and accept the ethical, social and environmental responsibility of corporation as stated by Adam (2004, p.751).
4. Research methodology
The research methodology helps as a structure to detail on the data collection method and explain the sort of information gathered which make sure information is collected properly relative to the research aims. Since findings of a research are considerably influenced by the research methodology. Hence, there is a need to plan and organise the research process carefully.
Research aims of this study are to analyse the views of certain users of accounts on the importance and decision usefulness of corporate social disclosures in the Mauritian listed companies' annual reports.
4.1 Data collection method
There are two types of data collection, which are specifically the primary and secondary data. Primary data is usually collected through interview, questionnaire, observation and experiment. In contrast, secondary data is information that has been gathered beforehand and published for another purpose which can as well be of use in a particular situation. The secondary data techniques carry the form of external sources, which include computerized database, books, journals magazines and other printed materials. In this study, both primary and secondary data collection techniques have been employed to gather information.
4.1.1 The primary data approach
The primary data collection technique used for this research work principally has based on a questionnaire approach which was distributed to the targeted groups. The advantages of using a questionnaire survey are firstly it saves time as such that interview is very time consuming and respondents can be not accessible. It also ensures higher reliability than other techniques and is most cost effective. The information can additionally be gathered in a standardised way but it has a major drawback of low response rate (Arvidsson 2011, p.282).
4.1.2 Secondary data approach
The secondary data is also employed in this study to review the previous studies and findings as well to have information on the CSR disclosures issue by various frameworks. The following secondary data collection techniques were used in this study:
Computerized database depicts information accumulated from online sources via numerous search engines such as Google and Google Scholar. The key words used to seek out information were "corporate social disclosure" and its other related terms such as "CSR disclosures", "social and environmental reporting". Then information was sorted out which relate to the research aims. In addition various websites that include Emerald, EBSCO, JSTOR and Springer Link were of constant use. The web site for Stock Exchange of Mauritius also provided an overview and related rules pertaining to CSD for MLC.
Books and journals provided a pool of information from various authors and supply valuable insight of the subject matter that are widely made available in libraries. A review of previous dissertations was also conducted that are accessible in the library of University of Mauritius for consultation.
Framework on guidelines of CSR and its related disclosures
The GRI website was of constant use and the sustainability reporting guidelines issued by GRI (2006) was employed in the study. The Code of corporate governance (2004) was a major secondary source of the subject matter since it is the sole documentation that detailed the guidelines for CSD in Mauritius. Reference had also been made to the Finance Act 2009 and the website of National empowerment foundation was of use as it provides guiding principles on CSR in Mauritius.
4.2 Population and sample size
The research address to users of accounts the viewpoints' and to make sure that an appropriate sample population chosen for this study, reference was made to the previous studies' target population. For instance, Tilt (1994, p.47) pointed out there are many user groups for CSD that include shareholders, government, employees, community and the general public. Moreover, based on the various prior studies, accountants were a main respondent as users in studying the importance or decision usefulness of CSD such as (Deegan and Rankin, 1997; Al-Khater and Naser 2003). While Craig and Bailey (1987 cited Deegan and Rankin 1997, p.566) consider a panel of 12 people of being representative "user groups" of corporation annual report that include share investor, manager, accountant, stockbroker, journalist, employee, environmental activist, university lecturers and accounting student.
Accordingly for this survey accountant and accounting student are the target population among the various sample groups presented by Craig and Bailey (1987). Moreover, these user groups are likely to support the view of IASB framework since they are assumed has a reasonable knowledge on accounting. The accountants chosen for this study are the professional accountants in Mauritius as they are familiar with various features of corporate reporting. While, the accounting students are the final year undergraduates in University of Mauritius due to their knowledge on the subject matter as these students hold accounting programme comprised of Financial Reporting module.
Additionally, the Mauritian listed companies (MLC) were the selected almost the various entities in Mauritius because these corporations have to adopt the Code of governance (2004) as per the Financial Reporting Act 2009. Hence, these corporations need to include a corporate governance section on comply or explain basis annually within their annual reports.
4.2.2 Sample size
A sample of 50 professional accountants has chosen at a random basis from the pool of 1880 members of professional accountants in Mauritius. On the other hand, there have 120 undergraduates that are actually leading towards, an Accounting degree in University of Mauritius and it has decided that only 50 undergraduates would be randomly selected to participate in this survey.
4.3 Questionnaire Design
After a general examination of existing literature, the questionnaire has designed and intended to collect information in regards to accountants and accounting undergraduates' views base on importance and decision usefulness of CSD. Furthermore, query did address to major limitations corresponding CSD that appear to hinder the decision making process and propose improvements which can be brought forward to enhance corporations CSR reporting.
The questions have been structure to closed-ended questions with the use of scaling in order to permit better analysis of information. Respondents were requested to denote their views on a five-point Likert scale in selecting options on 1 "very low importance" to 5 "very high importance" and 1 "strongly disagree" to 5 "strongly agree". The questionnaire can be viewed in (Appendix 1) of this study. The questionnaire has parted into three sections and questions have intended to find the following:
Question 1: Collects the profile information of the respondents that allow in classifying which user category they belong given and assesses their degree of knowledge on CSD so as better conclusion can be drawn based upon their knowledge of the subject matter.
Question 2: aims to investigate whether users hold the different CSD themes of importance within the MLC' annual reports. The themes include environmental, social, health and safety, and ethics disclosures as specified by Code of Corporate Governance (2004).
Question 3: examines users standpoints' why they regard is a matter of importance for CSD within the corporate annual reports. It tries to find out if CSD in annual reports provides: relevant facts; aid to assess the social and environmental impact of corporations; support all stakeholders in the decision-making process and whether it party bridges information gap on non financial issues.
Question 4: finds out which suitable mediums of communication that is considered being the most appropriate for CSR reporting to stakeholders by the MLC. The aim behind this question is to examine whether the annual report has viewed to be the most significant information source for CSD. Since corporate use various sources to disclose CSR disclosures such annual report, company's websites, general media and other booklet.
Question 5: analyses to what extent users consider CSD useful within the MLC' annual reports for certain major decision-making activities. These various decision-making activities include investment, employment, buying, and support the running operations of the corporations.
Question 6: enquires if users perceive CSD decision useful and whether it supports the qualitative characteristics that include clarity, reliability and comparability as put forward by GRI (2006 cited Wong, 2012) in order information to be useful.
Question 7: seeks to find out users' perceptions concerning whether CSD in MLC' annual reports appear to hold certain shortcomings in order to perform decision-making process. The drawbacks asked to users are if CSD result to be: lack of completeness; low levels of social disclosures; no proper framework for CSD; failure to quantify their social and environmental impacts; disclosures are done to enhance corporate reputation.
Question 8: considers users' opinions about the recommendation propose on how CSD can be improved in MLC' annual reports. Evidences in prior studies suggested that CSD could be better enhance with guidelines issued by the relevant authority; the imposition of fines for false information; being more objective in reporting; a law to support the CSR disclosures and the process of audit could enhance CSD.
4.4 Pilot Testing
The questionnaire at first has been given out to some accounting students and junior accountants to have their opinions. The objective was to come across any flaws in the questionnaire to know whether the questions were hard to understand, or it was too lengthy. Afterwards, some modifications have made following to their advices. Then the questionnaire, has reviewed by an academic lecturer and after certain recommendations the questionnaire went through additional changes. Finally after the amendments have made, the distribution of the questionnaire has made to two professional accountants and two accounting undergraduates. They have all finished the questionnaire within 9 minutes and found the overall questionnaire good in terms of understanding, presentation and content.
4.5 Limitations of this study
The main drawback of this study is in regards to the sample chosen as the study could not consider the various users of accounts due to the limited time available. Moreover, the investors or shareholders have not included within the selected users groups who argued to be assumed as being the primary target audience for such disclosures (Murray et al., 2006, p.229). This is because of the unavailability of their personal information such as names and email addresses. Hence, short of having other user's groups in the sample were a shortcoming in analysing the overall users' views on the importance and decision usefulness of CSD.
On the other hand, the questionnaire has also kept short in order the respondents do not feel disinterested in answering the questions and subsequently the various aspect on CSD could not been explored in the study. Furthermore, problems had also been related to the late submission of questionnaires which ultimately caused a delay for data analysis despite several requests made to the respondents to return the questionnaire on time.
5. Analysis and Findings
This chapter presents findings with comparison to some empirical studies as discussed in the literature. For this study, SPSS software is used to analyse data from the questionnaire to generate charts, descriptive statistics and to perform the different analytical test such as Kruskal Wallis test, Mean test, Chi-square test just to name a few.
5.1 User Background Information (Question 1)
5.1.1 User category
Information on users is fundamental since it allows to classify information gathered from them and to assess the sufficiency of sample chosen. For this study, two users groups were targeted that comprise mainly professional accountant and accounting undergraduate as shown in Table 1. It can be seen only 70 questionnaires were received out of the 100 questionnaires sent to them.
Figure 1 depicts only 29 professional accountants and 41 accounting undergraduates participated in this survey. This explains a quite satisfactory number of respondents took part because in both cases more than half of the sample participated out of 50 questionnaires distributed to each user category.
5.1.2 Degree of knowledge on CSD
The option 'poor' to 'excellent' knowledge on CSD had been provided in the questionnaire and none of the users evaluated with a 'poor' knowledge on CSD as illustrated in table 2. It meets the view of the IASB framework that states users are assumed to have reasonable knowledge on accounting. Thus, this assessment helps to know how users with such traits could relatively to be influence in making economic decision in respect to CSD.
The figure 2 below shows mostly all users have either a 'fair', 'good' or 'very good' knowledge on CSD. It can be noted 22.9% claim to have 'fair' knowledge, 51.4% hold 'good' knowledge, and 24.3% were from a 'very good' knowledge while only 1.4 % assert to have 'excellent' knowledge on CSD.
5.2 Importance of the different CSD themes in Mauritian listed companies' annual reports (Question 2)
This question attempt to find out to what extent users consider the environmental, social, ethics, health and safety themes of importance within the MLC' annual reports as specified in the Code of Corporate Governance (2004). Users were required to indicate their level of importance in the following order:
"Very Low Importance"
"Very High Importance"
A Kruskal Wallis test was performed to know the level of importance attached to the different CSD themes as per each user category and to test the following hypothesis:
H0: There is no significant difference in ranking importance of the different CSD themes among user groups.
H1: There is a significant difference in ranking importance of the different CSD themes among user groups.
The environmental theme was second highest rank (mean=3.93) to the overall user groups. It can be noticed this theme is substantially considered of significance to accounting undergraduate (mean=37.96) while accountants provided a (mean=32.02) in valuing this theme and explain users are giving importance to green issues. This is consistent with prior findings conducted in Australia where users viewed environmental themes as an important CSD theme within the corporate annual reports (Deegan and Rankin 1997) also support (Tilt 1994; Yaftian, 2011) study and so is inconsistent to (Chan and Milne, 1999; Gunawan, 2010) survey.
Next, the third preferred themes was the social themes (mean=3.86). In this respect, both user groups find social disclosure vital as on average accountant and accounting student provided a mean of 34.62 and 36.12 correspondingly. Therefore this assessment is in accordance with Tilt (1994) survey while is contradictory to Milne and Chan (1999) finding that evidenced users do not valued the social disclosures within corporate annual reports.
Significance of health and safety disclosure within corporate annual reports to users was as well echoed in Deegan and Rankin (1997) study.
Thus all the four CSD themes within MLC' annual reports are of "high importance" to user groups as deduced from table 5 that all 'Mean' values tend to be greater than 3.5 and are closer to 4 indicating high importance. There is also found to be no significant difference in ranking importance of the different CSD themes among user
Hence, the study is consistent to most empirical findings that reflect annual reports as the generally suitable medium of CSR reporting to stakeholders (Tilt, 1994; Epstein and Freedman, 1994; Deegan and Rankin, 1997; Yaftian 2011) due to the various advantages discussed in the literature (see section 3.5) and is also in line with Gray et al. (1995, p.82) argument . While is in contradiction with Craig and Bailey survey (1986 cited Deegan and Rankin, 1997) that users do not perceived annual report as an appropriate medium for CSR reporting.
From the table 7 above it can be noticed that majority users (47 users) found CSD useful for the investment decisions. As it can be noted 35 agree and 12 strongly nominated CSD within MLC' annual reports is useful for such decision making activity. Therefore this finding is in accordance with most of the empirical studies such as (Al-Khater and Naser, 2003; Epstein and Freedman, 1994; Solomon and Solomon, 2006; De Villiers and Van Staden, 2010) that confirmed users viewed CSD within the corporate annual reports useful for investment decision.
The table 8 confirmed users as well perceived CSD within the MLC' annual reports are useful for employment decision. It can be seen more than half of the sample (42 users) agrees accordingly to this query. While few denote (11 users) CSR disclosures within this statutory document is not useful in forming a decision in respect to employment. Hence, it highly support (Deegan and Rankin, 1997; Samuel et al., 2004) views that claimed CSD within annual reports help for staffing decision.
It can be concluded from figure 3 above that majority users argue CSD within MLC are decision useful. Since 51.71% and 15.71 % users did positively answer to this query. This means CSD allows assisting the realisation of some goals and so being relevant to economic decision making. The finding is in line with most of the prior study that found CSD decision useful to users (Tilt 1994; Deegan and Gardon, 1996; Deegan and Rankin, 1997; Deegan and Rankin 1999; Solomon and Solomon 2006; De Villiers and Van Staden, 2010). Moreover, it also supports the decision usefulness theory (see section 3.2.4 of the literature).