The Effect of Integrating Reporting on Earnings Quality: A Study of Family Firms in Indonesia

Integrated reporting is becoming increasingly popular. The focus of this study was to assess the overall integrated reporting quality of global companies and find determinants of high-level integrated reporting. Qualitative text analysis was performed on the 2017 integrated reports of 110 global organizations to determine in what way companies report on specific topics related to the six capitals: social and relationship, human, intellectual, manufacturing, natural, and financial. Using a novel assessment technique, scores were then assigned according to the details provided in the integrated reports on the various topics. This was done for each form of capital, and the total integrated score was subsequently calculated as the average between all the capital scores. Finally, a regression analysis was performed to determine the characteristics of high-quality integrated reporters. The results of univariate analysis and two-stage least squares instrumental variable (2SLS) regression indicate that companies of a larger size with a higher female board ratio and listing in the International Integrated Reporting Committee (IIRC) examples database are more likely to publish a higher quality integrated report. The results imply that these variables are the main disclosure drivers. However, a significant negative correlation was found between integrated report quality and the variables related to female executive ratio, external board member ratio, profitability, leverage, and previous report experience, as well as report length. No significant association was found between the location and industry group and report quality. The empirical evidence of this study shows that even though integrated reporting has become more common overall, the comparability and quality of the reports still remain low.

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The Effect of Reporting About Value Creation on the Earnings Quality of Iraqi Economic Entities

Jawad¹,

Al-Mashhadani²

2023

IJRSSH

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The study aims to measure the impact of reporting on value creation on the earnings quality of the economic unit by presenting and discussing the conceptual aspects of the value creation process through multi-capital and the importance of reporting it in Iraqi private banks in addition to presenting and analyzing the concept of profit quality and its measurement models. Therefore, the checklist prepared for this purpose was used based on previous studies related to the subject in order to determine the level of reporting of the research sample banks by analyzing the content of the annual reports of those banks as well as adopting the Tobin's Q scale to measure the value of the economic unit and then using some statistical models to find out the effect of reporting on value creation on the value of the research sample banks. The research reached a set of conclusions, the most important of which are: the value creation model through multi-capital in the international integrated reporting framework as a reporting mechanism can help in providing an appropriate environment for obtaining high-quality information and thus can improve the quality of accounting information, especially the quality of reported earnings and enable stakeholders also have access to different capitals from an integrated and long-term perspective. It also increases transparency and reduces information asymmetry, thus limiting the management of opportunistic earnings that often occur through manipulation of accounting estimates and accruals according to a short-term perspective that focuses on making earnings only. The result is reflected positively in the earnings quality. In light of the conclusions reached, the researchers recommend expanding information reporting practices in Iraqi private banks on the basis of a broad base of capital to demonstrate the value creation process in order to provide transparency, improve the quality of information, and reduce attempts to manipulate and distort earnings through receivables to achieve high levels of earnings quality, thereby enabling investors and other stakeholders to accurately evaluate units and assisting them in the effective allocation of resources among low-rated or high-performance Iraqi private banks

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The Effect of Integrating Reporting on Earnings Quality: A Study of Family Firms in Indonesia

Cited by 3 publications

References 21 publications

The effect of industry sensitivity, leverage, and market capitalization to the elements of integrated report in Indonesian publicly listed firm’s annual report

The effect of industry sensitivity, leverage, and market capitalization to the elements of integrated report in Indonesian publicly listed firm’s annual report

Determinants of Companies that Disclose High-Quality Integrated Reports

The Effect of Reporting About Value Creation on the Earnings Quality of Iraqi Economic Entities

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