scholarly journals Forward-Looking Information Based on Integrated Reporting Perspective: Value Relevance Study in Indonesia Stock Exchanges

2018 ◽  
Vol 8 (4) ◽  
pp. 1-12
Author(s):  
Wiwik Utami ◽  
Putri Dwi Wahyuni
Keyword(s):  
Value Relevance ◽  
Stock Exchanges ◽  
Integrated Reporting ◽  
Forward Looking

Quantitative impacts of mandatory integrated reporting

2019 ◽  
Vol 17 (4) ◽  
pp. 604-634 ◽  
Author(s):  
Elaine Conway
Keyword(s):  
Financial Performance ◽  
Financial Risk ◽  
Risk Measures ◽  
Ordinary Least Squares ◽  
Mandatory Reporting ◽  
Stock Exchanges ◽  
Integrated Reporting ◽  
Content Type ◽  
Environmental Goals ◽  
The Impact

Purpose This paper aims to examine the impact of the 2011 mandatory introduction of integrated reporting (<IR>) on the financial performance, risk and institutional shareholding of listed companies in South Africa to assess whether there is a benefit to <IR> and which may encourage greater adoption of it globally. It contrasts the results with two other African stock exchanges (Nigeria and Egypt with no mandatory <IR>) and examines whether <IR> quality also has an impact on these and on environmental, social and governance (ESG) disclosure scores. Design/methodology/approach A series of multivariate ordinary least squares regressions was estimated on a range of financial, risk, institutional and ESG data from firms on the three African stock exchanges, between 2006 and 2015. Findings Financial performance and risk in South African firms appear to have decreased since the start of mandatory reporting, but institutional shareholding has increased. The production of higher quality reports is associated with decreased financial performance and risk, higher institutional shareholding and increased ESG scores. Originality/value This study is first to test the quantitative effects of <IR> and <IR> quality on a broad range of financial performance and risk measures and the level of institutional shareholding. It also adds to the literature by assessing how the quality of <IR> can impact the ESG scoring of the business. Hence, this study is of interest to firms looking to adopt <IR> for its benefits and to regulatory bodies considering the mandatory adoption of <IR> in support of achievement of national social and environmental goals.

scholarly journals Does integrated reporting enhance the value relevance of organizational capital? Evidence from the South African context

2019 ◽  
Vol 20 (5) ◽  
pp. 642-661 ◽  
Author(s):  
Maroua Tlili ◽  
Hakim Ben Othman ◽  
Khaled Hussainey
Keyword(s):  
South African ◽  
Financial Reporting ◽  
Quantitative Methods ◽  
Value Relevance ◽  
South African Context ◽  
Organizational Capital ◽  
The South ◽  
Integrated Reporting ◽  
Content Type ◽  
African Context

Purpose Despite the growing literature on integrated reporting (IR) adoption and the emphasis on integrated thinking capitals, prior research works only focused on the financial and non-financial reporting rather than the cornerstones of IR. In order to fill this gap, the purpose of this paper is to investigate the value relevance of organizational capital (OC) after the mandatory adoption of IR in South Africa over the period 2006–2015. Design/methodology/approach The authors have used quantitative methods to test the hypotheses. The South African context is unique since the Johannesburg Stock Exchange is the first to mandate listed firms to adopt IR following King III report in March 2010. Findings The findings provide the first evidence, to the best of the authors’ knowledge, on the positive and significant impact of IR adoption on the value relevance of OC. Originality/value The authors contribute to IR literature by providing new insight on the value relevance of one capital from a new perspective addressing the importance of resources as inputs to the business model highlighted by integrated thinking in the IR framework. The findings derive various implications for the International Integrated Reporting Council, managers, decision makers and the research community.

Modifying assurance practices to meet the needs of integrated reporting

2018 ◽  
Vol 31 (2) ◽  
pp. 400-427 ◽  
Author(s):  
Warren Maroun
Keyword(s):  
Financial Reporting ◽  
Business Models ◽  
Analytical Techniques ◽  
Published Data ◽  
Integrated Reporting ◽  
Test Procedures ◽  
Content Type ◽  
International Integrated Reporting Council ◽  
Integrated Or ◽  
Forward Looking

Purpose Traditional methods of assurance outlined by current professional standards are risk-based models where the emphasis is on the veracity of published data rather than on the rigour of the interpretation or analysis of information provided to users. As such, they are not well suited for expressing an opinion on qualitative, subjective or forward-looking assessments typically included in integrated reports. In this context, the purpose of this paper is to describe an alternate approach to assurance and identifies the initial elements of an “interpretive assurance model”. Design/methodology/approach The research is exploratory/interpretive. It relies on detailed interviews with experienced auditors and preparers to develop an initial approach for providing some level of assurance over an integrated report. Findings The research identifies elements of an interpretive assurance model which focusses on providing assurance on the interpretation and analysis of information included in an integrated report rather than on underlying data. These include an examination of the completeness of the explanation of the value creation process provided in an integrated report; the methods used to support management discussion and analysis; and the reasonability of the review process used to ensure the reliability of qualitative, subjective and forward-looking representations contained in an integrated report. Research limitations/implications The study is conducted in a South African setting. While limiting the study to a single jurisdiction may be seen as a limitation, local preparers and auditors have had at least five years of experience with the application of an integrated reporting framework and are in a strong position to provide detailed insights. Practical implications An interpretive assurance model shifts the focus from objective verification of data using defined test procedures to evaluation of the interpretation and analysis process used to prepare an integrated report. Application of the proposed model will require practitioners and auditing students to be trained extensively in qualitative analytical techniques. The inherent complexity of contemporary business models and the multi-dimensional focus of integrated reports will also result in changes in the composition of audit teams which are currently dominated by experts in financial reporting rather than integrated or strategic business management. Originality/value The paper is the first to offer a practical approach for providing assurance over an integrated report. It responds to calls form the International Integrated Reporting Council and International Auditing and Assurance Standards Board for more innovative assurance models for addressing the reporting needs of contemporary organisations.

scholarly journals Investigation on the Value Relevance of Integrated Reporting and Organizational Capital: Evidence From Sri Lanka

2020 ◽  
Vol 11 (6) ◽  
pp. 372
Author(s):  
Athambawa Haleem ◽  
Samsudeen Thowfeek Ahamed ◽  
Wewaldeniyage Shanika Lakmali Kumarasing
Keyword(s):  
Positive Impact ◽  
Value Relevance ◽  
Stock Exchange ◽  
Market Value ◽  
Analysis Data ◽  
Future Research ◽  
Organizational Capital ◽  
Integrated Reporting ◽  
Return On Equity ◽  
Corporate Reporting

Integrated reporting is a developing reporting aspect in order to assess problems relating to corporate reporting. It provides a comprehensive account of organizational worth. This paper aims to assess whether integrated reporting and organizational capital increase the value relevance of firms. A checklist containing 100 integrated reports of banks which are listed in Colombo stock exchange were used for the analysis. Data were collected over the period from 2010 to 2019. Statistical analysis was done using the EWIS. Finding reveals that the book value of equity, earnings before interest and taxation of the equity of the bank, leverage of the bank and Organizational capital have a direct effect on the market value of equity of the bank while return on equity and size does not have a positive impact on the market value of equity of the bank. And to the best of our knowledge, it reveals that there is a significant effect of integrated reporting on the value relevance of organizations. Future research avenues were identified and the suggestions for future research on integrated reporting were provided. The findings bring out different implications for managers, decision-makers and the research community as well. This study further expands the existing knowledge on integrated reporting and sets the foundation for future researchers.

scholarly journals Value Relevance of Integrated Reporting using a Novel Approach: Comparative Cross Country Evidence of Mandatory and Voluntary Implementers

2021 ◽  
Author(s):  
◽  
FJ Mohaimen
Keyword(s):  
Linear Model ◽  
Value Relevance ◽  
Explanatory Power ◽  
Accounting Information ◽  
Additive Models ◽  
Integrated Reporting ◽  
Novel Approach ◽  
Cross Country ◽  
Log Linear ◽  
Reporting Environment

<p>This thesis examines the value relevance of accounting information under integrated reporting (IR) in a comparative mandatory and voluntary setting. A meta review is conducted of all published work focusing on integrated reporting since 2011, which provides detailed insight into the gaps in the IR literature. Multiplicative log-linear model is used in measurement, which is a novel technique that mitigates the shortcomings of traditional value relevance models. The findings show that value relevance of summary accounting information increases after the implementation of IR in the mandatory setting. In the voluntary setting, market effect and the existing reporting paradigm effect the value relevance of accounting information under IR. If the market is large and existing reporting requirements are robust voluntary adoption of IR has minimal to no effect. However, in smaller markets with less rigorous reporting environment, adoption of IR does result in increased value relevance of accounting information. Compared to traditional models, the multiplicative model provides estimates that are more stable over time and shows better explanatory power. Overall, the findings of this thesis show that capital providers value the information content of IR under specific circumstances. This thesis contributes to the IR and value relevance literature by providing the first comparative cross-country evidence of the effect of IR in the change in value relevance of reported accounting information. It provides policy relevant input to the standard setters of IR by demonstrating the effect of IR in the decision usefulness of summary accounting information. The thesis further provides robust evidence of the efficacy of using the multiplicative log-linear model in measuring value relevance instead of the traditional linear additive models.</p>

scholarly journals Integrated Reporting and Investment: How are They Related?

The Winners ◽  
2020 ◽  
Vol 21 (1) ◽  
pp. 1
Author(s):  
Bernadeta Susilo Martanti ◽  
Dessy Astuti Hermanto ◽  
Elin Noviyanti ◽  
Windy Rizkika Andriany
Keyword(s):  
Corporate Strategy ◽  
Value Relevance ◽  
The United States ◽  
Professional Services ◽  
Integrated Reporting ◽  
Voluntary Regulation ◽  
A Value ◽  
Government Mandates ◽  
The Government

The research aimed to explore how integrated reporting potentially impact the investor decision within mandatory and voluntary regulation. The method used was exploration of arguments from several researchers, either from theoretical and empirical basis, or literature review.  The method of this qualitative research was dividing the literature into categories which in this research would be mandatory and voluntary regulations. The sub categories were divided by two countries which were Africa and The United States as research objects. The result and discussion were integrated reporting increases the value relevance of information produced by the company and underline the way companies create a value over the short until long term by informing business model, corporate strategy, and forecasting view. The result shows that Integrated Reporting will be more useful if the Government mandates the regulation like in Africa. It is considered that when Integrated Reporting potentially impacts the investors’ decision assured by professional services, these disclosures will be more accurate and reliable. A contribution for the government to create a clear regulation of the integrated report and provide an assurance service to assure the accuracy of information in the Integrated Report will be our expectation.

scholarly journals Integrated Reporting Practices in Europe and Value Relevance of Accounting Information under the Framework of IIRC

2018 ◽  
Vol 13 (5) ◽  
pp. 1 ◽  
Author(s):  
Salvatore Loprevite ◽  
Daniela Rupo ◽  
Bruno Ricca
Keyword(s):  
Financial Reporting ◽  
Price Level ◽  
Value Relevance ◽  
Accounting Information ◽  
Financial Capital ◽  
Integrated Reporting ◽  
Book Value ◽  
Reporting Practices ◽  
Level Model

The research has been conducted on a sample of European companies with the aim to investigate whether the adoption of the Integrated Reporting (IR) affects the value relevance of summary accounting information. The relations between Market Value (MV) and traditional accounting information (Book Value and Earnings) are studied by a linear price-level model, typical of the studies on the value relevance of accounting information. The results of analysis show that the degree of value relevance of Earnings is significantly different for companies that publish an Integrated Report compared to companies adopting traditional financial reporting. The study confirms the assessment made by IIRC and the other advocates: Integrated Reporting is expected to improve the quality of traditional accounting information for providers of financial capital.

scholarly journals THE PATTERNS OF INTEGRATED REPORTING: A COMPARATIVE STUDY OF COMPANIES LISTED ON THE JOHANNESBURG STOCK EXCHANGES AND INDONESIA STOCK EXCHANGES

2019 ◽  
Vol 9 (1) ◽  
pp. 1
Author(s):  
Anis Chariri
Keyword(s):  
Comparative Study ◽  
Financial Reporting ◽  
Ethical Leadership ◽  
Annual Reports ◽  
Stock Exchanges ◽  
Integrated Reporting ◽  
Study Find ◽  
Institutional Differences ◽  
Concise Information ◽  
Rules And Standards

Integrated reporting is considered as the new format of financial reporting that provides users with more comprehensive and concise information. However, the format of integrated reporting is still developing that lead companies implementing integrated reporting with different level of information. This study aims at investigating the integrated reporting patterns of companies from two different reporting regimes (mandatory vs voluntary). Using annual reports of companies listed on the JSE and IDX, this study find that there are differences in seven of nine dimensions of integrated reporting among companies listed in the two markets. The only dimensions of integrated reporting with the similar patterns between the two regimes are ethical leadership and compliance with laws, codes, rules, and standards. The study contributes to the need for considering the institutional differences in studying integrated reporting issues and provide the regulators with the need for preparing relevant standards as a guidance for integrated reporting implementation

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.

Sign in / Sign up

Export Citation Format

Share Document