Early assessments of the gap between integrated reporting and current corporate reporting

2015 ◽  
Vol 23 (1) ◽  
pp. 92-117 ◽  
Author(s):  
Warwick Stent ◽  
Tuyana Dowler
Keyword(s):  
Problem Solving ◽  
Systems Thinking ◽  
Financial Stability ◽  
Best Practice ◽  
Small Sample ◽  
Integrated Reporting ◽  
Content Type ◽  
Reporting Practices ◽  
Corporate Reporting ◽  
Mandatory Requirement

Purpose – The purpose of this paper is to provide early assessments of the changes for corporate reporting processes, which an emerging initiative like integrated reporting (IR) will require. The authors also consider the potential for these changes to contribute towards resolving major problems such as financial and environmental crises. IR is gaining momentum globally, and the implementation of some form of future mandatory requirement in this regard appears likely. Design/methodology/approach – The authors begin by developing a reporting checklist based on the requirements for IR, which they use to assess the gap between current “best practice” reporting processes and IR. They then propose systems thinking, a widely accepted approach to problem-solving, as a theoretical basis for assessing the IR Framework and for deeper consideration of the gap analysis. They demonstrate, at a paradigm level, how systems thinking can be used to assess IR and find that IR has the potential to offer specific and implementable strategies for operationalising systems thinking principles. Findings – The authors assess 2011 annual reports and related online reporting practices for four New Zealand “best practice reporting entities”, using their reporting checklist. Although none of their sample entities published a full integrated report for 2011, reporting scores range from 70 to 87 per cent. The findings suggest that current reporting processes lack the integration, oversight and due attention to future uncertainties required by IR. While this appears to be a relatively small gap, systems thinking principles indicate that these deficiencies may be critical to sustainability and financial stability, the stated aims of IR. Research limitations/implications – The normal limitations which apply to small sample studies. Practical implications – The IR reporting checklist and systems thinking proposal could be used by policymakers, standard setters and firms to assist in assessing IR’s potential and the additional requirements it will impose for corporate reporting. Originality/value – This study answers calls in the literature for a reactivation of the normative research agenda by assessing IR against systems thinking, a widely accepted approach to problem-solving. It contributes further to an understanding of IR through the development of a unique reporting checklist and by offering empirical evidence derived from application of this checklist.

Investigating the role of national culture on integrated report assurance: international evidence

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ali Uyar ◽  
Merve Kilic ◽  
Cemil Kuzey
Keyword(s):  
Cultural Values ◽  
Multinational Corporations ◽  
National Culture ◽  
Service Providers ◽  
Integrated Reporting ◽  
Content Type ◽  
Reporting Practices ◽  
Corporate Strategies ◽  
Corporate Reporting ◽  
The Impact

PurposeDrawing on neo-institutional, stakeholder, social contract and contingency theories, the objective of this study is to examine whether cultural values across countries may influence decisions to assure integrated reports.Design/methodology/approachFor this purpose, the authors have collected integrated reporting assurance, national culture and firm-specific data from several sources for the years ranging between 2011 and 2016 and have performed pooled and panel logistic regression analyses.FindingsThe authors found that corporations established in countries where the following characteristics prevail have higher tendencies to assure integrated reports: high collectivism among people, low power distance, strong feminine values rather than masculine values, high uncertainty avoidance, pursuance of short-term goals rather than long-term and a low level of indulgence.Research limitations/implicationsThe study is not free from limitations. First, the authors were only able to obtain assurance data for the years between 2011 and 2016 since 2011 was the initial year in which integrated reporting was adopted. Second, culture variables used throughout the study remained the same for each year due to the unavailability of differing data. This was noted in prior studies as well; thus, this is not an exception. Third, the assumption that all companies in a country have the same culture score is inherent in the scoring system of countries (Orij, 2010).Practical implicationsBased on the results, the authors drew implications for organizations, policymakers and assurance service providers. Multinational corporations can benefit from the outcome of this study by considering national cultures in formulating their corporate strategies. Finally, assurance service providers can position themselves in the marketplace by the findings of this study.Originality/valueThis paper aims to enhance the comprehension of corporate reporting practices by companies that operate in different countries, with necessarily varying cultural values. To the best knowledge of the authors, no prior study has yet examined the impact of national culture on the assurance of integrated reports.

scholarly journals Mandatory vs voluntary exercise on non-financial reporting: does a normative/coercive isomorphism facilitate an increase in quality?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jonida Carungu ◽  
Roberto Di Pietra ◽  
Matteo Molinari
Keyword(s):  
Financial Reporting ◽  
Best Practice ◽  
Environmental Accounting ◽  
Voluntary Exercise ◽  
Financial Reports ◽  
Accounting Systems ◽  
Content Type ◽  
Reporting Practices ◽  
Corporate Reporting

Purpose This paper aims at investigating the quality of non-financial reporting (NFR) in light of Directive no. 2014/95/EU. Specifically, it focuses on the quality of NFR in Italian companies, as required by Legislative Decree no. 254/2016. Design/methodology/approach The method used to develop the analysis is mainly qualitative. A content analysis of 184 non-financial reports (NFRs) was conducted on a sample of 92 companies that have been previously involved in the process of NFR on a voluntary basis. Then, a longitudinal analysis was carried out to assess the quality of the NFR conducted from a voluntary to a mandatory basis. Findings This study shows that the quality of NFR does not increase when moving from a voluntary to a mandatory basis, especially for 25% of the companies that publish supplementary sustainability reports and/or plans. This result demonstrates that preparers may perceive mandatory NFR as a comprehensive best practice to adequately report their social, economic and environmental performance. Originality/value The contribution of this research is threefold. Firstly, it contributes to the social and environmental accounting literature that focuses on NFR quality assessment. Secondly, it contributes to the literature that emphasizes the role of mimetic, coercive and normative isomorphism mechanisms on accounting systems and reporting practices. Thirdly, it contributes to the research gaps for academics highlighted by previous literature on mandatory corporate reporting as a consequence of normative requirements and on the relationship between regulation and mimetic, coercive and normative isomorphic mechanisms within organizations.

Sustainability reporting or integrated reporting: Which one is valuable for investors?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ika Permatasari ◽  
Ika Permatasari ◽  
I Made Narsa
Keyword(s):  
Value Relevance ◽  
Accounting Information ◽  
Sustainability Reporting ◽  
Financial Information ◽  
Integrated Reporting ◽  
Content Type ◽  
Reporting Practices ◽  
Corporate Reporting ◽  
Sustainability Reports ◽  
International Integrated Reporting Council

Purpose This research is motivated by the development of dialogue and debate regarding company reporting in the form of sustainability reporting (SR) – which is separate from the annual report (AR) – or integrated reporting (IR). Research into SR and IR is still fascinating, and this study addresses the debate about them. This study aims to examine which of the two reports is more valuable for investors, and also examine whether IR has value relevance because the information in the IR could reinforce the importance of the accounting information. Design/methodology/approach As with previous studies, we adopted a valuation approach – the Ohlson model – to assess the value relevance of non-financial information (in the form of SR/IR) and financial information. As a preliminary study, we used non-financial information as a binary variable, i.e. a group of companies that issue sustainability reports and a group of companies that issue integrated reports. Therefore, they complement and interact with the financial statements’ information. This paper used panel data consisting of 931 firm-years of SR issuers and 922 firm-years of IR issuers in Europe and Africa in the period from 2005 to 2019. Findings The results showed that SR had a higher value relevance than IR. However, when the authors interact the corporate reporting form with the accounting information, IR had value relevance because the information contained in the IR could reinforce the importance of the accounting information. Practical implications This study will support regulators in various countries to monitor the reporting practices of companies in those countries. The results of this study provide evidence that sustainability reports get a higher response than integrated reports. However, when interacted with the accounting variables, information in the IR is considered to be more relevant than that found in the SR. Therefore, it is hoped that the results of this study will help the International Integrated Reporting Council (IIRC) in reviewing IR practices around the world so that the implementation of IR practices can be realized in accordance with the mission that the IIRC wants to achieve. Originality/value Research into the value relevance of SR and IR has been carried out by several previous researchers separately, but to the best of the author’s knowledge, there are no studies comparing the value relevance of the two.

The association between accountant’s competences, organisational culture and integrated reporting practices

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Laura Orobia ◽  
Racheal Nturaninshaba ◽  
Juma Bananuka ◽  
Kasmwakat Reuel Dakung
Keyword(s):  
Civil Wars ◽  
Organisational Culture ◽  
Manufacturing Firms ◽  
Integrated Reporting ◽  
Manufacturing Firm ◽  
Content Type ◽  
Reporting Practices ◽  
Corporate Reporting ◽  
Reporting Framework ◽  
Study Results

Purpose This study aims to investigate the association between accountant’s competences, organisational culture and integrated reporting practices. Design/methodology/approach A questionnaire survey of 43 manufacturing firms in Mbarara district (South Western Uganda) was undertaken. The unit of inquiry was senior staff in the accounts office while the unit of analysis was the manufacturing firm. The study hypotheses were tested using regression analysis with the aid of Statistical Package for Social Sciences software version 21. Findings The findings revealed that while there is a positive and significant association between accountant’s competences and integrated reporting practices, the association between organisational culture and integrated reporting practices is insignificant. In the additional analysis, this study finds that accountant’s competences are significantly associated with all the content elements of an integrated report as enshrined in the International Integrated Reporting Framework of 2013. Surprisingly, organisational culture is not significantly associated with any of the content elements of an integrated report as enshrined in the International Integrated Reporting Framework of 2013. Practical implications To the academia, this study expands on the understanding of what matters for improvement in integrated reporting practices in an emerging economy such as Uganda whose history is characterised by civil wars and political unrest. Those in practice may use this study results to promote better reporting practices through the attraction of professional accountants with the necessary proficiencies in corporate reporting practices. The policymakers may also opt to mandate integrated reporting among manufacturing firms. Originality/value This study provides a first-time and in-depth understanding of the association between the accountant’s competences, organisational culture and integrated reporting practices using evidence from a developing African Country – Uganda.

Factors affecting the diffusion of integrated reporting – a UK FTSE 100 perspective

2015 ◽  
Vol 6 (2) ◽  
pp. 190-223 ◽  
Author(s):  
Fiona Ann Robertson ◽  
Martin Samy
Keyword(s):  
Diffusion Of Innovation ◽  
Empirical Studies ◽  
Small Sample ◽  
Relative Advantage ◽  
Research Approach ◽  
Structured Interviews ◽  
Integrated Reporting ◽  
Senior Managers ◽  
Content Type ◽  
Reporting Practices

Purpose – This study seeks to investigate the likely adoption of integrated reporting (IR), in addition to highlighting the limitations of current reporting practices. In particular, the analysis in this study used the characteristics of diffusion of innovation theory to investigate how perceptions of IR as offering a relative advantage over existing practices; its compatibility to existing organisational values, past experiences and needs; and its perceived complexity impacted on the adoption and diffusion of IR. Design/methodology/approach – Methodology was based on a content analysis of 22 UK FTSE 100 annual and sustainability reports across industries. To build a phenomenological triangulation research approach, semi-structured interviews were conducted with ten senior managers to ascertain their perceptions of current SR practices and IR. Findings – The analysis in this study revealed that low/medium levels of linkages exist between the majority of reports in the sample, thus limiting their usefulness. Based on these findings, this study suggests that senior managers perceive IR as having a relative advantage over existing practice. Overall, the senior managers interviewed were supportive of IR and this research revealed that many companies are starting to integrate their reporting along IR guidelines. This study further identifies factors that are likely to impact on more widespread diffusion of IR. Research limitations/implications – The sample size to assess linkages between reports was based on a sample of company reports across industries to give a balanced view of reporting practices. This could be viewed as a limitation as it was not a representative sample of the population as a whole. Another limitation of this research study was the small sample of organisations that participated in the interview process, and the single country focus. Practical implications – This study has identified several factors that were likely to impact on wider spread diffusion of IR, which should be of interest to practitioners in this field as well as those considering the adoption of IR. Originality/value – As an emerging phenomenon, there are few empirical studies exploring IR practices and perceptions. To the best of the authors' knowledge, this is the first paper that provides some insights into IR from a UK perspective.

Sustainability reporting and integrated reporting perspectives of Thai-listed companies

2019 ◽  
Vol 17 (4) ◽  
pp. 671-694
Author(s):  
Neungruthai Petcharat ◽  
Mahbub Zaman
Keyword(s):  
Best Practice ◽  
Emerging Market ◽  
Sustainability Reporting ◽  
Listed Companies ◽  
International Standards ◽  
Annual Reports ◽  
Global Reporting Initiative ◽  
Integrated Reporting ◽  
Content Type ◽  
Reporting Practices

Purpose This paper aims to examine the reporting on sustainability and the level of compliance with international best practice, the Global Reporting Initiative (GRI), aimed at improving communicative value to users. Design/methodology/approach Using a qualitative approach, comprising interviews with senior managers and analysis of disclosures in annual reports of Thai-listed companies, this paper contributes to the literature by providing evidence from an emerging market setting. Findings This study finds that sustainability reporting and integrated reporting perspectives of sampling companies are aiming to satisfy information needs to stakeholders and value creation to external users. Sustainability disclosures are related to some aspect of integrated reporting (IR) principles but not all. Research limitations/implications The findings of this study are based on the results from interviews and annual reports of five business sectors, and may therefore, not reflect the sustainability reporting practices and/or annual reports of other Thai-listed companies. Also, there is limited reporting on future outlook. Practical implications The findings suggest that while sustainability and IR is being adopted very widely, in many countries, there is much variation in reporting practice especially in our emerging country context adopting a “comply or explain” approach. Social implications For the Thai-listed companies, IR systems could be in their early stages and still have long way to go. The results can greatly encourage Thai-listed firms to incorporate integrated information in annual reports based on international standards thus building trust in capital markets and wider society. Originality/value The findings contribute to the literature on sustainability reporting and on the level of compliance with international best practice such as GRI by providing empirical analysis of non-financial disclosures within publicly available reporting in Thailand.

It is not always bad news

2018 ◽  
Vol 31 (5) ◽  
pp. 1319-1348 ◽  
Author(s):  
Mary-Anne McNally ◽  
Warren Maroun
Keyword(s):  
Impression Management ◽  
Financial Reporting ◽  
Value Creation ◽  
Sustainability Reporting ◽  
Management Control ◽  
Financial Information ◽  
Accounting System ◽  
Integrated Reporting ◽  
Content Type ◽  
Corporate Reporting

Purpose The purpose of this paper is to challenge the notion that non-financial reporting is mainly about impression management or is only a superficial response to the hegemonic challenges posed by the sustainability movement. It focuses on the most recent development in sustainability reporting (integrated reporting) as an example of how accounting for financial and non-financial information has the potential to expand the scope of accounting systems, promote meaningful changes to reporting processes and provide a broader perspective on value creation. Design/methodology/approach The research focuses on an African eco-tourism company which has its head office in South Africa. A case study method is used to highlight differences in the presentation of an integrated business model according to the case entity’s integrated reports and how individual preparers interpret the requirement to prepare those reports. Data are collected using detailed interviews with all staff members involved in the preparation process. These are complemented by a review of the minutes of the company’s sustainability workshops and integrated reports. Findings A decision by the case organisation to prepare an integrated report gives rise to different forms of resistance which limits the change potential of the integrated reporting initiative. Resistance does not, however, preclude reform. Even when individual preparers are critical of the changes to the corporate reporting environment, accounting for financial and non-financial information expands the scope of the conventional accounting system which facilitates broader management control and promotes a more integrated conception of “value”. Research limitations/implications Integrated reporting should not be dismissed as only an exercise in corporate reporting and disclosure; it has a transformative potential which, given time, can enable new ways of managing business processes and articulating value creation. Originality/value This study answers the calls for primary evidence on how the requirement or recommendation to prepare an integrated report is being interpreted and applied by individual preparers. The findings add to the limited body of interpretive research on the change potential of new reporting frameworks. In doing so, the research provides theoretical support for developing arguments which challenge the conventional position that integrated reporting is little more than an exercise in impression management.

Crisis in systems thinking

Kybernetes ◽  
2019 ◽  
Vol 49 (7) ◽  
pp. 1915-1934
Author(s):  
Janos Korn
Keyword(s):  
Problem Solving ◽  
Systems Thinking ◽  
Soft Systems Methodology ◽  
Scientific Enterprise ◽  
Systems Methodology ◽  
Content Type ◽  
New Science ◽  
Future Developments ◽  
Informative Content ◽  
Current Systems

Purpose The current field of systems thinking consists of a variety of views, methods and a number of organisations involved with these views which suggests a state of confusion and fragmentation of the field which fundamentally is supposed to be a uniform view of structures or systems. This can be interpreted as a “crisis situation”. A resolution of the crisis in the form of a “new science of systems” is proposed. Assuming this new science becomes part of the field of systems thinking, a debate of the elements of the field is suggested with a view to consider its current state and future developments. “Crisis - resolution - debate” is the central theme of the paper. Design/methodology/approach The field of current systems thinking is described in terms of views, methods and organisations and is seen as the “problematic issue”. A “new science of systems” strongly rooted in natural language as its primary symbolism and consisting of three general principles of systems and linguistic modelling is outlined to be considered as the resolution of the crisis. A set of criteria is discussed for use of judging the quality of models and element of the field of systems thinking including the “new science of systems”. To demonstrate a preliminary use of these criteria, the same example is worked out using both, the “soft systems methodology” and “linguistic modelling” for comparison. Findings The universal view of parts of the world as structures or systems is inconsistent with the multiple methods basically pursuing the same purpose: modelling aspects of systems which prevail in current systems thinking. To try to resolve this anomaly an equally universally applicable approach, the “new science of systems” is proposed which can also serve as an aid to problem solving, in particular to an integrated systems and product design. This approach is to be part of the suggested debate of the field of systems thinking. In general, there is no alternative to the structural view. Research limitations/implications The “new science of systems”, if found acceptable, can offer research opportunities in new applications of accepted branches of knowledge like logic, linguistics, mathematics of ordered pairs, uncertainties and in the philosophy of science. New teaching schemes can be developed at classroom level combined with engineering as creator of novelties with linguistics as the symbolism to supplement mathematics. Further considerations can be given to current methodologies of systems thinking as part of a debate with a view of future developments in exploring pioneering ideas. New software is needed for working out the dynamics of scenarios. Practical implications The debate, if it takes place, should result in new developments in the field of systems thinking such as concepts accepted as fundamental in the discipline of systems. Applications of the “new science of systems” to larger scale scenarios and organisations guided by the universal scheme in Figure 1 and linguistic modelling with software are needed for development of schemes for problem solving schemes “utilising” or “producing” products. Social implications The “new science of systems” is rooted in accepted branches of knowledge; it is highly teachable at school and university levels and should lead to use by professionals and in everyday life activities once found acceptable. The use of the scheme in Figure 1 should help in clarifying confusing scenarios and to aid problem solving. Originality/value The suggestion of a debate is an original idea. The “new science of systems” consists of three general principles of systems implemented by linguistic modelling of static and dynamic states. Mathematics of uncertainty and topics from conventional science at the object level supplement the “new science” which together form the “scientific enterprise”. The notions of cognitive value and informative content of models are introduced for evaluating their cognitive worth.

Exploring the rationale for integrated report assurance

2019 ◽  
Vol 32 (6) ◽  
pp. 1826-1854 ◽  
Author(s):  
Warren Maroun
Keyword(s):  
Quantitative Research ◽  
Sustainability Reporting ◽  
Organisational Change ◽  
Integrated Reporting ◽  
Governance System ◽  
Content Type ◽  
Reporting Practices ◽  
The Status ◽  
Perceived Relevance

Purpose The purpose of this paper is to examine why companies assure some of the information found in their integrated reports, possible changes required to existing assurance practices and the motivation for either seeking to expand current technologies of assurance or to maintain the status quo. Design/methodology/approach The research is exploratory/interpretive. Data are collected from detailed interviews with preparers and assurance experts. Framing theory provides the data analysis framework. Findings Three broad views on assurance are identified. An expectation management perspective focusses on the role of assurance as a legitimisation tool and requires no changes to existing assurance standards. A value-adding perspective emphasises the role of assurance in improving the usefulness of information being reported to stakeholders and its function as part of a broader corporate governance system. This can evolve into a change-potential outlook in terms of which assurance is used to promote positive organisational change, something which may require the development of new standards/guidelines for assuring integrated reports. Research limitations/implications Only preparers and assurance experts are engaged to explore the rationale for seeking to have parts of an integrated report assured. The views of the broader stakeholder community are not taken into account. The study is also limited to a single jurisdiction where integrated reporting practices are relatively well established. Practical implications Assurance of non-financial information cannot be understood only in terms of broad drivers such as firm size, environmental impact or listing status. It is inextricably linked with the perceived relevance of integrated (or sustainability) reporting and the value which assurance provides to an organisation and its stakeholders. Originality/value The study complements the mainly quantitative research on determinants of assurance of environmental or social disclosures. It is one of the few to provide primary evidence on the reasons for having these types of disclosures assured and how this informs the need for changes to existing assurance practices. The paper is also one of the first to deal with the assurance of environmental or social information in an integrated reporting context.

Thinking through the integration of corporate reporting: exploring the interplay between integrative and integrated thinking

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nicholas McGuigan ◽  
Ellen Haustein ◽  
Thomas Kern ◽  
Peter Lorson
Keyword(s):  
Integrated Reporting ◽  
Content Type ◽  
Individual Level ◽  
Site Analysis ◽  
Corporate Reporting ◽  
The Individual ◽  
International Integrated Reporting Council ◽  
The Mind ◽  
Consensus Decision Making ◽  
Academic Debate

Purpose This paper aims to introduce an analytical focus on an individual’s integrative thinking capacity to further understand integrated thinking within the organisation. Integrated thinking is an elusive concept, gaining in prominence through its use by the International Integrated Reporting Council (IIRC), without specific guidance or a commonly understood framework. To date, the academic debate on integrated thinking addresses the organisational level only. However, thinking is a process occurring within the mind of an individual and therefore the prerequisites for integrated thinking at the individual level needs to be considered. Critical reflection is, therefore, provided on the interplay between integrative and integrated thinking. Design/methodology/approach This paper draws on conceptual systems theory and case site analysis to reflect how integrative thinking can be encouraged and supported within the individual and how integrated thinking can hence be fostered within organisations. Findings The paper analyses and discusses four sites of integrative thinking: the Athenian democracy; the Minangkabau community; the Quakers and consensus decision-making; and the Apis Mellifera and the hive mind. The findings from these different sites illustrate that integrative thinking can be supported by specific structural, organisational and individual contexts and stimuli. Originality/value Extending the context of integrated thinking analysis outside of the organisation and analysing these sites through components of integrative thought, this article provides further insights into how integrated thinking can be fostered within different organisations. The implications of these findings for accounting and professional institutions, organisations and the ongoing professional development of accountants are discussed.

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