Integrated reporting and assurance: where can research add value?

Abstract

Purpose – This paper aims to provide insights into salient issues in the development of the Integrated Reporting (<IR>) Framework, and emerging issues in the implementation of this Framework, with the aim of identifying opportunities for future research. The International Integrated Reporting Council (IIRC) has recently produced a reporting framework for the preparation of a concise, user-oriented corporate report which expands the scope of a company’s reporting using a multiple capitals concept and requires a description of a company’s business model, allowing a better communication of its value creation proposition. To gain international acceptance, the market-based benefits of adopting the framework must be demonstrated. Design/methodology/approach – The paper takes the form of an archival analysis of the responses to the IIRC’s public consultation phases, providing insights into arguments for and against salient aspects of the framework, and identifying issues that would benefit from future research. Findings – Identifying issues that arose during the framework preparation, this paper identifies a range of future research opportunities and outlines the research approaches by which academics can assess the costs and benefits of companies reporting in accordance with the <IR> Framework and assuring this information. Research limitations/implications – Research opportunities associated with the International <IR>) Framework and associated assurance are identified. Practical implications – This paper provides insights and details of the process of adoption of <IR> and has implications for adopters and assurance providers of integrated reports, standard setters and regulators. The development of a sophisticated business case informed by rigorous research will be critical to the further uptake of <IR>. Social implications – Research opportunities identified include the expansion of the <IR> Framework to reporting entities other than corporations, including government and not-for-profit organisations, as well as measurement and assurance of a broader array of capitals, including social capital. Originality/value – The paper identifies <IR> research opportunities from an archival analysis of the responses to the IIRC’s public consultation phases, providing insights into arguments for and against salient aspects of the framework that would benefit from future research.

Environmental, social and governance disclosures in Europe

“…This has inevitably led to increased stakeholder engagement, integrated reporting and enhanced external verification systems. This subject has also been reported by Simnett and Huggins (2015), who have also presented a number of interesting research questions which could possibly be addressed through engagement research. At this point in time, stakeholders are considering reporting schemes as a valuable tool that can improve the quality of their reporting, particularly as it enables them to benchmark themselves with other companies (Adams et al, 2014).…”

“…waste reduction, alternative energy generation, energy and water conservation, environmental protection, sustainable transport, etc.). In this light, there are implications for practitioners and assurance providers of integrated reports, standard setters and regulators (Simnett and Huggins, 2015). Future engagement research can possibly consider how report content and reporting formats, might impact on organisations' decision-making (Correa and Larrinaga, 2015).…”

Barriers to implementing the International Integrated Reporting Framework

“…Lack of regulation is also linked to weak voluntary assurance practices for integrated reports (Simnett and Huggins, 2015;Tweedie and Martinov-Bennie, 2015), thus undermining improvements in the reliability and credibility of <IR>. As Tweedie and Martinov-Bennie (2015, p. 56) outline, while recent documents issued by the IIRC "stress that assurance can improve the credibility of an integrated report, the IIRC stops short of recommending or requiring such assurance".…”

The integrated reporting of financial, social and sustainability capitals: a critical review and appraisal

“…Academic literature has often relied on limited publicly available datasets on the diffusion of integrated reporting (Perego et al, 2016). Moreover, past studies may have only focused on the 'supply side' pertaining to the <IR> framework; without investigating in much depth and breadth which organisational processes are crucial for integrated reporting (Simnett & Huggins, 2015;de Villiers et al, 2014). To date, there is still scant empirical evidence about the strengths and weaknesses that are associated with the implementation of integrated reporting (Perego et al 2016;Cheng et al, 2014).…”

“…At the time, there was an increased awareness on how ESG issues could help them improve their corporate reputation and image (Camilleri, 2017). The ethical behaviours in financial reporting is often equated with the obligation for companies to disclose a true and fair view of their organisational performance (Maniora, 2015; Simnett & Huggins, 2015). Organisations are accountable and transparent toward their stakeholders when they report both financial and non-financial information to their stakeholders (Adams, 2015).…”