Integrating Sustainability Reports into Financial Statements: An Experimental Study

Arnold, Markus C.; Bassen, Alexander; Frank, Ralf

doi:10.2139/ssrn.2030891

Cited by 42 publications

(51 citation statements)

References 1 publication

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“…Whereas previous studies emphasized the potential benefits of integrated reporting in terms of debiasing effects (e.g., Arnold et al, 2012), the present study illustrates that, in specific settings, there may also be drawbacks (i.e., a biasing effect) in this reporting format.…”

Section: Discussioncontrasting

confidence: 74%

“…We attribute this finding to a halo effect emanating from the (mandatory) assurance of financial information in the integrated reporting format. This finding further contributes to experimental literature on integrated reporting, which had emphasized only the potential debiasing effects of this reporting format (e.g., Arnold, Bassen, & Frank 2012).…”

Section: Introductionsupporting

confidence: 70%

“…Experimental research on integrated reporting, however, is still very scarce. As shown in experimental evidence by Arnold, Bassen, and Frank (2012), an anchoring bias influences the assessment of sustainability information that is provided in a stand-alone sustainability report and an integrated report may help to avoid distorted valuations, thus serving as a debiasing tool. Our study further focuses the processing of sustainability information presented in separate and integrated reports and adds the influence of assuring this information to the analysis, emphasizing how these two important aspects of sustainability disclosure interact.…”

Section: Literaturementioning

confidence: 99%

“…First, we extend prior research on the issues of integrated reporting and external assurance of sustainability information, by specifically examining potential interaction effects. Second, the extant literature comprises few studies that explicitly consider sustainability information in investors' decision-making process (e.g., Arnold et al, 2012;Dhaliwal, Li, Tsang, & Yang, 2011). Third, to the best of the authors' knowledge, this is the first study to examine professional investors' processing of sustainability information.…”

Section: Introductionmentioning

confidence: 99%

“…Merging sustainability and financial information into a single document might overcome a potential disconnect in professional investors' processing of the two types of information (Arnold, Bassen, & Frank, 2012) by initiating "integrated thinking" as advocated by the IIRC (2013, p. 2). Therefore, in this study, we seek to shed light on professional investors' processing of corporate sustainability information in integrated and separate reporting formats.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Integrated Reporting and Assurance of Sustainability Information: An Experimental Study on Professional Investors’ Information Processing

Reimsbach

Hahn

Gürtürk

2017

European Accounting Review

210

199

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Sustainability-related non-financial information is increasingly deemed value relevant. Against this background, two recent trends in non-financial reporting are frequently discussed: integrated reporting and assurance of sustainability information. Using an established framework of information acquisition, evaluation, and weighting, this experimental study investigated how the choice of reporting format interacts with the voluntary assurance of sustainability information. The results from a sample of professional investors underline the important role of assurance in the context of voluntary disclosure and illustrate the relevant interaction with the reporting format. Assurance of sustainability information positively affected professional investors' evaluation of a firm's sustainability performance, resulted in a higher weighting of this information, and led to higher investment-related judgments. However, this assurance effect was weaker in the case of integrated reporting compared to separate reporting. We attribute this effect to a cognitive bias in decision making when assured financial performance and non-assured sustainability performance are presented in the same report.

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Section: Discussioncontrasting

confidence: 74%

Section: Introductionsupporting

confidence: 70%

Section: Literaturementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Integrated Reporting and Assurance of Sustainability Information: An Experimental Study on Professional Investors’ Information Processing

Reimsbach

Hahn

Gürtürk

2017

European Accounting Review

210

199

View full text Add to dashboard Cite

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Fostering Stakeholder Engagement: The Role of Materiality Disclosure in Integrated Reporting

2016

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This paper studies the determinants of materiality disclosure among International Integrated Reporting Council (IIRC) Pilot Program companies implementing the IIRC Framework. In other words, it studies which variables influence the way in which such companies provides information about their materiality determination process. In order to test our hypotheses we performed a number of statistical analyses on a unique hand‐collected dataset including IIRC and non‐IIRC Pilot Program companies for the 2012 and 2013 fiscal years. Our results indicate that industry and some firm‐level characteristics (board size and diversity) do play a significant role in the determination of materiality disclosure, whereas the legal environment in which companies operate does not. Also, we found that IIRC Pilot Program companies disclosed more information about materiality than their competitors that did not join the program. This paper provides interesting insights for policy makers (in particular, the IIRC) and extends previous academic literature on integrated reporting. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment

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Enhancing Market Valuation of ESG Performance: Is Integrated Reporting Keeping its Promise?

2016

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This paper studies the effectiveness of a firm's strategy to report on its ESG activities with regard to the extent and direction in which the firm's ESG performance is valued by capital market investors. It is the first to disentangle the moderating effects of different types of ESG reporting on market valuation of ESG performance and to analyze whether following the current integrated reporting trend is worth the effort. Results indicate that ESG performance is valued more strongly and in the (desired) positive direction when firms publish an ESG report, irrespective of its type (stand‐alone or integrated). Furthermore, integrated reporting is associated with superior outcomes compared with a stand‐alone report for composite ESG and corporate governance performance. Our findings are important for corporate managers, as they help to understand market valuation of ESG performance in dependence on the reporting type and provide guidance for formulating and evaluating the reporting strategy. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment

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Integrating Sustainability Reports into Financial Statements: An Experimental Study

Cited by 42 publications

References 1 publication

Integrated Reporting and Assurance of Sustainability Information: An Experimental Study on Professional Investors’ Information Processing

Integrated Reporting and Assurance of Sustainability Information: An Experimental Study on Professional Investors’ Information Processing

Fostering Stakeholder Engagement: The Role of Materiality Disclosure in Integrated Reporting

Enhancing Market Valuation of ESG Performance: Is Integrated Reporting Keeping its Promise?

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