The diffusion and adoption of integrated reporting: a cross-country analysis on the determinants

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Megawati Oktorina ◽  
Sylvia Veronica Siregar ◽  
Desi Adhariani ◽  
Aria Farah Mita
Keyword(s):  
Empirical Evidence ◽  
Diffusion Of Innovation ◽  
Disclosure Quality ◽  
Integrated Reporting ◽  
Diffusion Of Innovation Theory ◽  
Content Type ◽  
Corporate Reporting ◽  
Country Level ◽  
Reporting Framework ◽  
New Entrants

Purpose This study aims to provide empirical evidence on the determinants of voluntary integrated reporting (<IR>) disclosure quality. Design/methodology/approach The samples include companies from the Integrated Reporting Examples Database on the International Integrated Reporting Committee’s (IIRC) website, except South Africa and Brazil, where reporting is mandatory. The final sample includes 29 countries, with 148 companies and 592 observations for the study period 2014–2017. Content analysis is used to measure <IR> disclosure quality derived from the <IR> principles and elements published by IIRC (2013). The fraction regression probit model is used to test the proposed hypothesis. Findings This study provides empirical evidence that competition from new entrants and country-level accounting competence encourage companies to implement the International Integrated Reporting Framework (IIRF). Signaling theory and diffusion of innovation theory can be used to explain this association. Meanwhile, product market competition of existing rivals has been found to reduce the adoption of the <IR> framework, which is consistent with the proprietary cost theory. Finally, this study finds that company reputation does not affect voluntary <IR> disclosure quality. Research limitations/implications This study did not examine the barriers to entry to explain the effect of competition from new entrants as a possible determinant of <IR> disclosure quality. Furthermore, the inclusion of <IR> in the accounting curriculum of universities and certification bodies in certain countries has not been considered as a control variable. The results might also be limited to companies that voluntarily submitted into the Integrated Reporting Examples Database on the IIRC website. All these limitations provide ample avenues for future research. Practical implications This research provides implications for governments and standard setters to further sharpen the competence of accountants through memberships in professional accountancy organisations or through training and seminars related to <IR>. The results also suggest that universities should include the topic of <IR> in the accounting program curriculum to increase the understanding of prospective accountants about this reporting regime. The results also show differences on the impact of competition between new entrants and existing rivals on <IR> disclosure quality. This can be used by IIRC or other standard setters to predict the <IR adoption>. Originality/value This study uses the diffusion of innovation theory to explain the association between country-level accounting competence and <IR> disclosure quality. Few studies have researched this association. The results show that a country’s accounting competence increases the application of the IIRF in corporate reporting. <IR> has been considered an innovation in corporate reporting and can be implemented by the company if its professional accountants have enough knowledge of this reporting framework.

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.

Adoption of integrated reporting in Sri Lanka: coverage and trend

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Thilini Cooray ◽  
Samanthi Senaratne ◽  
Nuwan Gunarathne ◽  
Roshan Herath ◽  
Dileepa Neelangi Samudrage
Keyword(s):  
Sri Lanka ◽  
Design Methodology ◽  
The Other ◽  
Sri Lankan ◽  
Legitimacy Theory ◽  
Integrated Reporting ◽  
Content Type ◽  
Disclosure Requirements ◽  
Comprehensive Index ◽  
Reporting Framework

Purpose This paper aims to examine the coverage of and trends in reporting content elements in the integrated reports of the Sri Lankan companies following the International Integrated Reporting Framework (IIRF). Design/methodology/approach Based on a comprehensive checklist developed on the content elements of the IIRF, 171 corporate integrated reports were content-analyzed over a period of three years. The results were theorized subsequently using the legitimacy theory. Findings The study identifies that the extent of and trend in the coverage of content elements of the IIRF have increased during the period under consideration despite some under-addressed areas. It indicates that Sri Lankan companies are making progress in the preparation of integrated reports in line with the IIRF, which provides evidence in support of both strategic and institutional perspectives of the legitimacy theory because of the proactive actions taken by managers to acquire legitimacy along with the other normative and mimetic pressures available in the IR landscape. Originality/value This is one of the first studies that evaluate the compliance of IR adopters with the IIRF overtime in the entirety of a single country. It also develops a comprehensive index to capture the disclosure requirements of IR and extends the analysis to a voluntary context using both strategic and institutional perspectives of the legitimacy theory.

Integrated reporting and integrated thinking in Italian public sector organisations

2017 ◽  
Vol 25 (4) ◽  
pp. 553-573 ◽  
Author(s):  
James Guthrie ◽  
Francesca Manes-Rossi ◽  
Rebecca Levy Orelli
Keyword(s):  
Public Sector ◽  
Processes Of Change ◽  
Press Releases ◽  
Structured Interviews ◽  
Integrated Reporting ◽  
Content Type ◽  
Early Adopters ◽  
Academic Literature ◽  
Reporting Framework ◽  
History Of

Purpose This paper aims to explore the linkages between integrated reporting (IR) and organisations’ internal processes, specifically focusing on investigating the internal mechanisms of change that can lead organisations to adopt IR disclosure and how this impacts on integrated thinking internally. Design/methodology/approach The paper draws upon previous analysis and insights provided in the IR academic literature, as well as analysing several directives, policy and framework pronouncements. The study also draws on the management accounting change literature, using it as a lens to observe early adopters’ practice. In addition, it provides detailed case studies considering the internal processes of change in five early adopters of the integrated reporting framework (<IRF>) and whether the adoption leads to internal “integrated thinking”. Five Italian public sector organisations are analysed, and the authors make use of official documents, press releases and in-depth semi-structured interviews with the major internal actors. Findings The research highlights that the processes of change in organisations adopting IR is their adoption of a way of thinking, that is, integrated thinking, as a result of the process of internalisation. Research limitations/implications Given the short history of IR, this sample is small due to the small number of early adopters. Originality/value The paper provides academics and policymakers with insights into the process of change to be considered while adopting the <IRF> and responds to calls in the IR literature for further field-based studies on IR’s impact on internal processes. Also, the paper highlights that the European Directive on the disclosure of non-financial and diversity information (2014/95/EU) has the potential to increase environmental, social and governance disclosures amongst European companies.

Implementation of computer-assisted therapy for substance misuse: a qualitative study of Breaking Free Online using Roger's diffusion of innovation theory

2014 ◽  
Vol 14 (4) ◽  
pp. 207-218 ◽  
Author(s):  
Sarah Elison ◽  
Jonathan Ward ◽  
Glyn Davies ◽  
Mark Moody
Keyword(s):  
Diffusion Of Innovation ◽  
Social System ◽  
Substance Misuse ◽  
Social Care ◽  
Computer Assisted ◽  
Innovation Theory ◽  
Diffusion Of Innovation Theory ◽  
Content Type ◽  
Adoption And Implementation ◽  
The Social

Purpose – The purpose of this paper is to explore the adoption and implementation of computer-assisted therapy (CAT) using Breaking Free Online (BFO) in a social care and health charity working with people affected by drugs and alcohol dependence, Crime Reduction Initiatives (CRI). Design/methodology/approach – Semi-structured interviews were conducted with service managers, practitioners, peer mentors and service users. Data were thematically analysed and themes conceptualised using Roger's Diffusion of Innovation Theory (Rogers, 1995, 2002, 2004). Findings – A number of perceived barriers to adoption of BFO throughout CRI were identified within the social system, including a lack of IT resources and skills. However, there were numerous perceived benefits of adoption of BFO throughout CRI, including broadening access to effective interventions to support recovery from substance dependence, and promoting digital inclusion. Along with the solutions that were found to the identified barriers to implementation, intentions around longer-term continuation of adoption of the programme were reported, with this process being supported through changes to both the social system and the individuals within it. Research limitations/implications – The introduction of innovations such as BFO within large organisations like CRI can be perceived as being disruptive, even when individuals within the organisation recognise its benefits. For successful adoption and implementation of such innovations, changes in the social system are required, at organisational and individual levels. Practical implications – The learning points from this study may be relevant to the substance misuse sector, and more widely to criminal justice, health and social care organisations. Originality/value – This study is the first of its kind to use a qualitative approach to examine processes of implementation of CAT for substance misuse within a large treatment and recovery organisation.

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.

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.

Top ten South African companies’ disclosure of materiality determination process and material issues in integrated reports

2018 ◽  
Vol 19 (2) ◽  
pp. 230-247 ◽  
Author(s):  
Natasja Steenkamp
Keyword(s):  
South African ◽  
Environmental Issues ◽  
Integrated Reporting ◽  
Content Type ◽  
Sustainable Performance ◽  
Award Winning ◽  
Reporting Framework ◽  
Determination Process ◽  
Practical Implications ◽  
Insight Into

Purpose The purpose of this paper is to develop guidelines of what award winning companies, leading practice in integrated reporting (IR) disclose in their integrated reports about material issues and their materiality determination processes. Also, to provide insight into what they disclose about their perception of materiality. Design/methodology/approach A content analysis was conducted to investigate what the top 10 South African companies of the 2015 Ernst and Young Excellence in Integrated Reporting Awards disclosed in their 2014 and 2015 integrated reports about their materiality determination processes, material issues and what materiality means to them. Thematic analyses were conducted in developing guidelines. Findings All except one company applied the International Integrated Reporting Framework. The materiality determination processes, material issues and companies’ descriptions of materiality are diverse. Material issues most companies identified relate to employees, social and environmental issues, customers and sustainable performance. Practical implications The proposed guidelines will provide useful strategies for organisations embarking on the IR journey about what issues could be considered as material and therefore included in integrated reports. It also proposes activities companies can undertake to identify, evaluate and prioritise material issues and execute their materiality determination process. Originality/value This paper is the first to develop guidelines of material matters and materiality determination processes. It also adds to existing literature on IR practice and the application of materiality.

Financial analysts' reaction to voluntary integrated reporting: cross-sectional variation in institutional enforcement contexts

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Francesca Rossignoli ◽  
Riccardo Stacchezzini ◽  
Alessandro Lai
Keyword(s):  
Institutional Setting ◽  
Institutional Characteristics ◽  
Unique Contribution ◽  
Integrated Reporting ◽  
Content Type ◽  
Institutional Settings ◽  
Country Level ◽  
Eu Directive ◽  
Sustainability Disclosure ◽  
Moderating Role

PurposeEuropean countries are likely to increasingly adopt integrated reporting (IR) voluntarily, after the 2014/95/EU Directive is revised and other initiatives are implemented. Therefore, the present study provides insights on the relevance of IR in voluntary contexts by exploring analysts' reactions to the release of integrated reports in diverse institutional settings.Design/methodology/approachDrawing on voluntary disclosure theory, a quantitative empirical research method is used to explore the moderating role of country-level institutional characteristics on the associations between voluntary IR release and analyst forecast accuracy and dispersion.FindingsIR informativeness is not uniform in the voluntary context and institutional settings play a moderating role. IR release is associated with increased consensus among analyst forecasts. However, in countries with weak institutional enforcement, a reverse association is detected, indicating that analysts rely largely on IR where the institutional setting strongly protects investors. Although a strong institutional setting boosts the IR release usefulness in terms of accuracy, it creates noise in analyst consensus.Research limitations/implicationsAcademics can appreciate the usefulness of voluntary IR across the institutional enforcement contexts.Practical implicationsManagers can use these findings to understand opportunities offered by IR voluntary release. The study recommends that policymakers, standard setters and regulators strengthen the institutional enforcement of sustainability disclosure.Originality/valueThis study is a unique contribution to recent calls for research on the effects of nonfinancial disclosure regulation and on IR “impacts”. It shows on the international scale that IR usefulness for analysts is moderated by institutional patterns, not country-level institutional characteristics.

scholarly journals Barriers to implementing the International Integrated Reporting Framework

2017 ◽  
Vol 25 (4) ◽  
pp. 461-480 ◽  
Author(s):  
John Dumay ◽  
Cristiana Bernardi ◽  
James Guthrie ◽  
Matteo La Torre
Keyword(s):  
Financial Reporting ◽  
Early Stage ◽  
Academic Research ◽  
General Concept ◽  
Future Research ◽  
The European Union ◽  
Integrated Reporting ◽  
Content Type ◽  
Stage Of Development ◽  
Reporting Framework

Purpose This paper is motivated by the call for feedback by the International Integrated Reporting Council (IIRC) from all stakeholders with knowledge of the International Integrated Reporting Framework (<IRF>) and specifically of the enablers, incentives and barriers to its implementation. The paper synthesises insights from contemporary accounting research into integrated reporting (IR) as a general concept and <IR> as espoused by the IIRC in the <IRF> (IIRC, 2013). The authors specifically focus on possible barriers and emphasise the specific issues the authors feel could be rectified to advance the <IRF>, along with the areas that may potentially hinder its wider adoption and implementation. Design/methodology/approach The paper draws upon and synthesises academic analysis and insights provided in the IR and <IR> academic literature as well as various directives, policy and framework pronouncements. Findings The flexibility and lack of prescription concerning actual disclosures and metrics in the <IRF> could allow it to be used for compliance, regardless of the other benefits lauded by the IIRC. Thus the authors see forces, both external and internal, driving <IR> adoption, with one prominent example being the European Union Directive on non-financial reporting. Because of the different ways in which IR is understood and enacted, there are numerous theoretical and empirical challenges for academics. The authors paper highlights potential areas for further robust academic research and the need to contribute to <IR> policy and practice. Research limitations/implications The paper provides the IIRC, academics, regulators and reporting organisations with insights into current practice and the <IRF>. The authors highlight the need for further development and evidence to help inform improvements both from a policy and a practice perspective. A key limitation of the authors’ work is that the authors draw upon a synthesis of the existing literature which is still in an early stage of development. Originality/value The paper provides the IIRC with several insights into the current <IRF> and specifically with the enablers, incentives and barriers to its implementation. Also, it provides academic researchers with a number of important observations and an agenda upon which the authors can build their future research.

Using the International Integrated Reporting Framework to comply with EU Directive 2014/95/EU: can we afford another reporting façade?

2020 ◽  
Vol 28 (5) ◽  
pp. 889-914 ◽  
Author(s):  
Lucia Biondi ◽  
John Dumay ◽  
David Monciardini
Keyword(s):  
Environmental Sustainability ◽  
National Level ◽  
Secondary Data ◽  
Integrated Reporting ◽  
Environmental Implications ◽  
Reporting Standard ◽  
Content Type ◽  
Eu Directive ◽  
Reporting Framework ◽  
The Eu

Purpose Motivated by claims that the International Integrated Reporting Framework (IRF) can be used to comply with Directive 2014/95/EU (the EU Directive) on non-financial and diversity disclosure, the purpose of this study is to examine whether companies can comply with corporate reporting laws using de facto standards or frameworks. Design/methodology/approach The authors adopted an interpretivist approach to research along with current regulatory studies that aim to investigate business compliance with the law using private sector standards. To support the authors’ arguments, publicly available secondary data sources were used, including newsletters, press releases and websites, reports from key players within the accounting profession, public documents issued by the European Commission and data from corporatergister.com. Findings To become a de facto standard or framework, a private standard-setter requires the support of corporate regulators to mandate it in a specific national jurisdiction. The de facto standard-setter requires a powerful coalition of actors who can influence the policymakers to allow its adoption and diffusion at a national level to become mandated. Without regulatory support, it is difficult for a private and voluntary reporting standard or framework to be adopted and diffused. Moreover, the authors report that the <IRF> preferences stock market capitalism over sustainability because it privileges organisational sustainability over social and environmental sustainability, emphasises value creation over holding organisations accountable for their impact on society and the environment and privileges the entitlements of providers of financial capital over other stakeholders. Research limitations/implications The authors question the suitability of the goals of both the <IRF> and the EU Directive during and after the COVID-19 crisis. The planned changes to both need rethinking as we head into uncharted waters. Moreover, the authors believe that the people cannot afford any more reporting façades. Originality/value The authors offer a critical analysis of the link between the <IRF> and the EU Directive and how the <IRF> can be used to comply with the EU Directive. By questioning the relevance of the compliance question, the authors advance a critique about the relevance of these and other legal and de facto frameworks, particularly considering the more pressing needs that must be met to address the economic, social and environmental implications of the COVID-19 crisis.

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