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Volume 5 Issue 4
Barcelona 2007
How to Ensure the Quality and Reliability of Intellectual Capital Statements?
Kai Mertins, Wen-Huan Wang and Markus Will
Fraunhofer IPK, Berlin, Germany
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To gain competitive advantage in Europe, it is vital for small and medium sized enterprises (SMEs) to utilise knowledge efficiently and to tap into full innovation potential. Reporting those intangible assets systematically to customers, partners or investors has become a critical success factor. Thus, managing “intellectual capital” (IC) becomes increasingly important for future-oriented organisations. The Intellectual Capital Statement (ICS) which is an instrument to assess, develop and report an organisation’s IC and to monitor critical success factors systematically, supports strategic management decisions.
For customers, investors and especially creditors, after receiving an ICS, one of the first things that usually comes into their mind is: Is this information “reliable”? To ensure a high quality level of ICS and to be accepted by, for instance, the financial market, it is important to have a neutral third party who certifies the reliability of the document. Learning from the experiences of ISO 9001 certification, assessment for the European Excellence Award and of financial audits, an ICS audit methodology has been developed. The ICS audit verifies the conformity with the European ICS guideline respective ICS implementation process and the completeness of the ICS content. Furthermore, it will check whether the content is plausible, verifiable and representative for the company. To ensure the sustainability of the ICS, the auditor will get a picture of whether the ICS content is communicated and the stated actions for improvements are in progress or already realised.
Furthermore, the SME will get a detailed analysis of causes for the company‘s IC strengths and weaknesses and receive further improvement recommendations by an expert who knows the IC practices of other companies.
The main focus of this paper is to demonstrate how to ensure the quality and reliability of IC reporting and how to promote the sustainable realisation of actions by ICS audits.
Keywords:
intellectual capital, intellectual capital statement, quality management, audit methodology, knowledge management, SME European Commission/Research
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