The Connectivity of Information in Integrated Reporting. Empirical Evidence from International Context

Abstract

In recent years, an increasing number of accounting scholars have been investigating the concept and the purpose of integrated reporting. After the issue of IIRC Framework, which is principle-based, it is now recognized that there is an urgent need for empirical analysis of the content of the reports at their first development stage. This in order to understand if the aims of this new reporting approach are realistic and achievable in practice. This paper responds to such call and it tries to contribute in two ways. Firstly, it illustrates the way in which the Guiding Principle of Connectivity of Information is applied at international level. In particular, we analyzed the compliance of disclosure practices in integrated reports of 2013 with the key forms of Connectivity of information presented in the Framework. Secondly, the paper tries to interpret the practices observed, in order to identify useful implementation criteria of this Guiding Principle. This is light of the fact that the Guiding Principle was noted as the most important to obtain a truly integrated report, but, at the same time, difficult to interpret and problematic to apply. The results of the analysis indicate an application of the principle extremely heterogeneous (and in such cases disappointing), confirming the need to establish practical guidelines to apply it. By this study, we made a preliminary attempt to identify some characteristic attributes of Connectivity of information within integrated reporting. The findings carry implications for eventual refinement of the IIRC Framework and, especially, to support companies wishing to prepare an integrated report.

Ensuring More Sustainable Reporting in Europe Using Non-Financial Disclosure—De Facto and De Jure Evidence

“…In the present study, the content analysis was performed manually by reading the reports in their entirety [8,58]. To quantify the necessary information, a dichotomous coding system was applied by attributing scores of 0/1 for the absence/presence of information [8,58,59,66]. Then, an un-weighted disclosure index was employed to quantify the level of compliance of the reports with the EUG.…”

Disclosure of Intellectual Capital Components in Integrated Reporting: An Empirical Analysis

“…At this stage of the journey towards integrated reporting, the lack of representation and measurements of (some categories of) capitals other than financial capital can be accepted, but the operators' response to the need for a holistic vision of the organisation for all the stakeholders must be considered inadequate. Therefore, the empirical analysis provides a classification of the IC disclosures that could be taken into consideration while investigating the contents of IRs and the connectivity between the different capitals [35].…”

“…Accordingly, many studies have replied to such a call. Several papers have examined emerging integrated reporting practices [8,[25][26][27][28][29][30][31][32][33]; some of them have focused on the application of the IIRC Framework's guiding principles [34][35][36][37] and users' benefits [26,38].…”

“…Furthermore, scholars call for the adoption of a critical approach while investigating IC, suggesting a need to embrace a broader research strategy to the value creation issues, in order to include social and environmental values [61]. In fact, integrated reports should be structured so as to allow the reader to understand the connections between the IC components, as illustrated in the IIRC Framework, and the context in which businesses operate, in order to thoroughly explain the company's value creation process [27,35]. However, considering that the link between value creation and both IC and IR seems to be taken for granted ("unproven" [42]), there is a need to adopt a critical approach while examining IR, avoiding the presumption of its advantages.…”

The Regulation of Sustainability Information–The Contribution of Directive 2014/95

“…In literature, researchers initially studied the non-financial information stated in the financial reports [27,28]. Subsequently, research focused on stand-alone SRs and, finally, the attention was directed to the integrated financial statements and the relations between the reporting systems (financial report and sustainability report) [7,29,30,31].…”