Integrated reporting: Much ado about nothing?

By | 2022-02-03T12:13:16+01:00 February 3rd, 2022|

Brigitte de Graaff, Bert Steens, Kees Camfferman / Financial Reporting / 2-2021

Integrated reporting, which helps companies to share their value creation processes with their stakeholders, has developed rapidly in recent years. Due to the increased attention paid to the International Integrated Reporting Framework is-sued by the International Integrated Reporting Council, the number of companies worldwide engaging in integrated reporting is continually rising, which is presumably driven by the claimed benefits of this practice. Through recourse to legitimacy theory and management fashion theory, here we provide a preliminary assessment of the development of integrated reporting, alongside considering the potential influence of academic research in its growth. We review the existing body of academic literature on this topic, ultimately identifying 123 claims about the benefits of IR from 29 papers published in 15 journals between May 2011 and September 2016, before proceeding to analyse both the sources and the level of substantiation of these claims. Our findings suggest that only a few of the purported ad-vantages of integrated reporting are supported by actual empirical evidence, while most of the claims only cite a limited number of primary sources. Based on these results and our assessment of the development of the concept of IR, we propose a future research agenda.


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The assurance of non-financial disclosure: A longitudinal analysis of the academic and professional literature

By | 2022-02-03T11:50:09+01:00 February 3rd, 2022|

Michele Guidi, Marco Giuliani, Maria Serena Chiucchi, Stefano Marasca

/ Financial Reporting / 2-2021

Various studies argue that non-financial information is particularly relevant for business stakeholders. To reduce the risks related to information asymmetries and “window dressing” practices and to enhance the credibility of non-financial information, the need for assurance has arisen. In recent years, scientific and professional interest in the issues related to the assurance of non-financial information has increased. Up to now, there have been very few studies on the evolution of non-financial disclosure (NFD) assurance, nor have scholars addressed the possible gaps and future research perspectives in this field. A systematic review is developed with the following aims: first, to explore the evolution of the NFD assurance literature by systematising academic studies (i.e., papers published in scientific journals) and professional contributions (i.e., papers published in non-scientific sources) from the auditing field, and second, to understand whether theory and practice have influenced each other in the field of NFD assurance, i.e., whether a bridge between theory and practice can be identified within this discourse. The main findings are the following: firstly, four stages can be identified in the evolution of the study of NFD assurance, and secondly, there is virtually no interaction between theory and practice, as practically no scientific papers are mentioned in professional papers, while academic scholars consider professional publications only as empirical data sources.


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Integrated reporting and the epistemic authority of Big Data: An exploratory study from the banking industry

By | 2020-12-22T19:18:03+01:00 December 22nd, 2020|

Alice Francesca Sproviero  / Financial Reporting / 2-2020

This paper aims at exploring how corporate members involved in integrated re-port (IR) preparation assess the reliability of Big Data as a new source of information. It investigates IR preparation within a company operating in the Italian banking industry that has adopted Big Data since 2015. Using the epistemic authority lens (Kruglanski et al., 2005), this study reveals how corporate members draw mainly on their professional background and the Big Data-related initiatives to define the extent to which Big Data contributes to IR preparation, with educational background and corporate circumstances playing a less incisive part. Constructing performance indicators, identifying prospective information to contrast criminal phenomena and lending support to relational sustainability all act as in-formational and motivational factors that lead members to rely on Big Data while preparing the IR. The paper contributes to the infant literature on Big Data in corporate reporting by offering early practical insights into how Big Data informs IR preparation. It also provides evidence of a necessary intertwining between ac-counting-based knowledge and training initiatives on advanced analytics to fully exploit Big Data in IR preparation.

Insolvency, crisis, financial indicators, early warnings.

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Does the Integrated Reporting’s definition of human capital fit with the HR manager’s perspective?

By | 2020-12-22T19:05:30+01:00 December 22nd, 2020|

Maurizio Cisi, Francesca Alice Centrone, Laura Corazza  / Financial Reporting / 2-2020

The assessment of the organisation’s ability to create value over time through its human capital (HC) is crucial for every business. Several definitions of HC exist, quite ambiguous and not unique. This fuzziness is impacting, in turn, the business practice. This study is grounded on the concept of HC, as defined by the Integrated Reporting (IR) and it is focused on testing the self-identification of HR managers with the IR definition. With this work, authors want to question the inclusivity of the definition of HC, as well as, its practical suitability, recurring to a theoretical framework called dialogic-polylogic accounting. A first exploration of the HC definition from the IR framework has been con-ducted, representing the cause-effect links and some reflections on its semantics. Furthermore, the opinion of a purposive sample of key informants HR managers is explored through a qualitative content analysis on 19 semi-structured interviews. Such key informants have a first-hand knowledge about the community of Italian HR managers, and they have no experience in IR representing the voice of excluded, but potential users. Despite an initial sympathetic reaction, the HC practitioners stressed an excessive technical rigidity in IR definition, quite distant from their field experience on HC.

Human capital definition, Integrated Reporting, human resources, dialogic-polylogic accounting, non-financial reporting.

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Putting integrated reporting where it was not: The case of the not-for-profit sector

By | 2020-02-11T12:14:34+01:00 February 11th, 2020|

Girella Laura, Dameri Paola / Financial Reporting / 2-2019

Nowadays we are facing a new phase of capitalism. Information that is beyond financial capital and able to provide a more comprehensive picture of the path towards better transparency and accountability is increasingly needed and requested. A remarkable body of evidence already exist on how large, listed companies are facing this change, but very little is known about the non-for-profit sector. This work aims to analyse if and how new forms of reporting, such as integrated reporting, can be adopted by not-for-profit organisations to illustrate their efforts towards an improvement in their accountability processes. To this end, through an interventionist approach, the case of an Italian not-for-profit organization operating in the collection and redistribution of food is examined. It emerges that, integrated reporting can represent a valuable device that can be adopted also by the not-for-profit sector to improve its accountability. However, in order to be successfully implemented, some modifications have to be made in order to better encounter the  specificities of these organisational settings.

accountability, integrated reporting, not-for-profit

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Beyond Financial Reporting. Integrated Reporting and its determinants: Evidence from the context of European state-owned enterprises

By | 2020-02-11T12:04:04+01:00 February 11th, 2020|

Nicolò Giuseppe, Zanellato Gianluca, Manes-Rossi Francesca, Tiron-Tudor Adriana / Financial Reporting / 2-2019

Integrated reporting (IR), which aims to overcome the limitations of both traditional financial and stand-alone non-financial reports, has gained momentum as a single comprehensive tool merging financial and non-financial information. Initially conceived for private sector entities, IR is also establishing itself in the public sector context as a vehicle for transparency and accountability. This research offers empirical investigation of IR practices in the State-Owned Enterprises (SOEs) context. More specifically, the paper investigates the levels of disclosure provided through IR by a sample of 34 European SOEs and explores the effects of potential explanatory factors. The results indicate a fair level of IR disclosure and a trend of reporting information already requested under international accounting standards. The findings also highlight that industry (basic materials and financials) and size positively influence the level of IR disclosure in a particularly strong way, while governance features (board size and board gender diversity) and the provision of external assurance do not exert any impact.

integrated reporting, state-owned enterprises, non-financial disclosure, accountability

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Determining characteristics of boards adopting Integrated Reporting

By | 2019-09-27T09:13:59+02:00 September 26th, 2019|

Alfiero Simona, Cane Massimo, Doronzo Ruggiero, Esposito Alfredo / Financial Reporting / 2-2018

Nowadays, companies and markets are increasingly international and growing numbers of stakeholders are affected by the economic, social and environmental aspects of business, resulting in significant changes in how corporate information is both perceived and published. Over the last few years, this new scenario has led to many company boards voluntarily adopting an accounting and company performance tool, known as Integrated Reporting (IR), which is a single disclosure document that satisfies stakeholders’ increasing need for communication. This study’s objective is to contribute to existing literature on the relationship between financial reporting and corporate governance, investigating into whether certain characteristics of the board – including numbers, gender, nationality, average age – influence the decision to adopt IR or not. The analysis was carried out on a sample of 120 Italian listed companies in different sectors for the year 2014. These results showed a positive relationship between the decision to use IR and the size of the board and the presence of female boardmembers, whereas the presence of foreign and older boardmembers had a negative effect on adopting IR.

integrated reporting, board of directors, diversity, logit

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The Connectivity of Information in Integrated Reporting. Empirical Evidence from International Context

By | 2017-12-22T10:28:00+01:00 December 21st, 2017|

Incollingo Alberto, Bianchi Michela/ Financial ReportingRiviste / Fascicolo: 2-2016

In recent years, an increasing number of accounting scholars have been investigating the concept and the purpose of integrated reporting. After the issue of IIRC Framework, which is principle-based, it is now recognized that there is an urgent need for empirical analysis of the content of the reports at their first development stage. This in order to understand if the aims of this new reporting approach are realistic and achievable in practice. This paper responds to such call and it tries to contribute in two ways. Firstly, it illustrates the way in which the Guiding Principle of Connectivity of Information is applied at international level. In particular, we analyzed the compliance of disclosure practices in integrated reports of 2013 with the key forms of Connectivity of information presented in the Framework. Secondly, the paper tries to interpret the practices observed, in order to identify useful implementation criteria of this Guiding Principle. This is light of the fact that the Guiding Principle was noted as the most important to obtain a truly integrated report, but, at the same time, difficult to interpret and problematic to apply. The results of the analysis indicate an application of the principle extremely heterogeneous (and in such cases disappointing), confirming the need to establish practical guidelines to apply it. By this study, we made a preliminary attempt to identify some characteristic attributes of Connectivity of information within integrated reporting. The findings carry implications for eventual refinement of the IIRC Framework and, especially, to support companies wishing to prepare an integrated report.

Keywords: Integrated reporting, non-financial information, connectivity of information, IIRC Framework

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