English

In 2013, the International Integrated Reporting Council (IIRC) issued the Integrated Reporting (IR) Framework to improve corporate reporting. The purpose of IR is to integrate financial and non-financial information to explain how the organisation creates value and improves firm performance over time. Since the introduction of IR, a company weighs the benefits over the costs of changing to IR. Recent trends in IR have heightened the need to examine the actual contents of IR. The objective of this study was to find the relationship between preparing a high-quality IR and corporate reputation. Corporate reputation is one of the main objectives for the preparation of IR, and preparing a high-quality IR can positively impact corporate reputation. Data was collected from a sample of 120 companies from the IIRC websites for three years (360 firm-year observations) to examine the quality of following the 2013 Framework. An index was developed, and the corporate reputation score was collected from the RepTrak websites. The finding showed that companies preparing high-quality IR reports had a significant positive relationship with corporate reputation. Preparing a high-quality IR sends a signal to users of annual reports as a connotation of the company (good product or services, ethical management reporting), which will help build trust towards the company and improve its reputation. This study contributes by providing empirical evidence for a company, which is uncertain about the benefits of IR. The IR disclosure score can be used as a reference by IIRC and policymakers to prepare the IR. Keywords: integrated reporting, disclosure quality, corporate reputation

The aim of this chapter is to provide a discussion of the business case of Enel, which is an International Integrated Reporting Council (IIRC) pilot program company currently evolving its corporate disclosure towards Integrated Reporting (IR). The relevance of pilot company business cases has been recognized by the IIRC, which defined their experience as “invaluable”. On the one hand, Enel did modify its corporate reporting system coherently with the IIRC guiding principles by including considerable non-financial information in its annual report, reducing the length of its sustainability report and improving its materiality determination process and business model analysis. On the other hand, it will be interesting to see how the company applies other aspects of the IIRC framework, such as the six-capital structure and the way in which reporting boundaries are defined. The analysis done in this chapter may be of interest to companies, standard setters and scholars wishing to enhance their knowledge on how companies are currently evolving their corporate disclosure systems towards IR.

This study reviews the diffusion of integrated reporting (IR) research. The systematic literature review method is used to review the effects of IR at the organisational level, determinants of IR adoption and integrated report quality (IRQ), assurance on IR, economic consequences of IR/IRQ, and research design issues to set agendas for future research. The review covers 119 peer‐reviewed IR articles published in 36 journals between 2012 and 2021. It finds that the IR literature is dominated by organisational‐level studies, but there is limited research on the economic consequences of IR/IRQ, and the findings are inconclusive to date. Further, the factors that determine IR adoption/IRQ are not conclusive, and there is scarce research on IR assurance. This review contributes to the emerging IR literature and provides valuable insights to the International Integrated Reporting Council (IIRC) in establishing the IR framework as a global reporting norm in practice.

PurposeThis paper aims to discuss the most critical aspects relative to the “usability” of the International Integrated Reporting Council (IIRC) Framework faced by small and medium-sized enterprises (SMEs) in releasing the integrated report and adapting the Integrated Reporting (IR) principles (i.e. materiality, integrated thinking and connectivity) to their needs and features. Only recently the relevance of IR for SMEs has been internationally acknowledged.Design/methodology/approachThe study is based on both a deductive and inductive approach. The first one is founded on a literature and technical review aimed at tracing the theoretical background and the framework on integrating reporting in SMEs. The second one is empirically constructed and follows the action research approach because it involves the analysis of a single case-study relative to a company – Costa Edutainment Spa that released its pioneering integrated report in 2014 – belonging to the Italian Network on Business Reporting, a working group which has been involved in the pivotal drafting process of a Guidance for IR in SMEs.FindingsResults emphasise the main criticalities faced by an SME in the IR process, namely, the need for the following: clearly defining the relationship between sustainability and integrated reporting; adapting the main IR concepts (such us materiality, integrated thinking and connectivity) and fully understanding the benefits deriving from the implementation of IR. Moreover, results shed light on the usefulness of a simplified and operative guidance for releasing the integrated report within SMEs the effectiveness deriving from the direct involvement in the NIBR working group and the provision of practical examples and suggestions.Research limitations/implicationsThe main limitations are due to the fact that the empirical analysis is related to a single case study, and it is explorative in nature. Consequently, results are not generalisable. However, the work contributes to nourish the debate on the benefits and critical issues relative to the diffusion of IR among SMEs in a research field which has not been adequately investigated and to develop reflections on the benefits of the diffusion of the IR among SMEs, pointing out the opportunity to follow an evolutionary path which drives the evolution of the entrepreneurial and organisational culture towards monitoring, assessing and reporting the company’s value process creation.Practical implicationsThe work contributes to triggering the debate on the diffusion of IR among SMEs which represents a research field that remains still under investigated. It points out a fundamental gap on how to implement IR in SMEs and operationalise the IIRC concepts and principles. It develops reflections on the critical issues and benefits of the diffusion of the IR among SMEs. Drawing from a pioneering experience, the work contributes to supporting entrepreneurs by emphasising the possible benefits deriving from the implementation of the IR process. It suggests an evolutionary path through different steps (starting from the business model definition) which are necessary to drive the entrepreneurial and organisational culture towards monitoring, assessing and reporting the SMEs’ value process creation.Originality/valueThe work contributes to devoting the attention of both scholars and practitioners to an underestimated research field – the “feasibility of IR in the SMEs context – which has not been yet adequately investigated. Moreover, being empirically based, it helps in supporting the diffusion of the IR framework among SMEs, practitioners and consultants by providing insights aimed to improve the IR Guidance for SMEs and sensitise entrepreneurs by emphasising that a possible step-by-step “IR journey” is possible.

This chapter explores how companies can elaborate a report that is capable of satisfying stakeholders’ “hunger” for information by integrating financial, environmental, social, and economic information together. The Integrated Report (IR) proposed by the International Integrated Reporting Council is based on more than just a method of reporting or a fashion fad. It presents a new way of looking at business operations that is no longer solely aimed at maximizing profits, which is a real, cultural change. The IR aims to communicate the financial and non-financial information that characterizes the sustainable value creation of an organization in a connected, clear and concise way. This chapter aims to demonstrate how the IR concept is stimulating the academic, institutional, and corporate world ten years after the birth of the IIRC. The research design provides information gathered from a time-series investigation over an eight-year period (2011–2018) straddling the <IR> Framework and the Directive 2014/95/EU to verify how IR as a corporate tool has spread through the countries of the EU. The investigation has taken into consideration all IR released from the companies present in the IIRC Examples database during the period considered. Samples are limited to only companies with legal head offices in the countries of the European Union.

Purpose – Intellectual capital (IC) is fundamental to understanding how firms create value; however, current IC disclosure (ICD) has been described as inadequate due to the lack of an established IC framework and companies’ actual commitment to report IC information. The International Integrated Reporting Council aims to foster ICD by means of integrated reporting (IR); such a report should display how IC and other forms of capital (e.g. financial) contribute to value creation over time. Drawing on impression management (IM) studies, the purpose of this paper is to assess the quality of ICD offered in IR. Design/methodology/approach – A manual content analysis of all the reports available in the International Integrated Reporting Council web site is run considering both the content of ICD and specific linguistic attributes (evidence, time orientation and tone). In addition, the study tests the relationship between the positive ICD tone and specific characteristics that may incentive managers to manipulate their disclosure to determine whether firms use ICD to manage public perceptions of corporate behaviour. Findings – The results of the content analysis show that majority of ICD is focused on relational capital, with limited quantitative and forward-looking information. Additionally, compared to non-ICD, ICD is significantly more optimistic. Furthermore, the positive tone of ICD is significantly associated with declining performance, bigger size and higher level of intangibles supporting the use of ICD as an IM strategy. Originality/value – The research contributes to the literature offering evidence of the quality of the ICD offered in the IR and demonstrating that ICD offered in the IR is used by managers opportunistically to advance their image.

Purpose: The aim is to determine whether public finance sector entities in Poland charge compensation for debt recovery costs and to verify if this practice poses a risk of violating public finance discipline. Concerns regarding this issue were reinforced by a European Court of Justice Judgment (C-327/20).Methodology/approach: To achieve the research objective, three research questions were formulated: (1) do public finance sector entities charge compensation for recovery costs? (2) have entities ceased calculating compensation as a result of the ECJ Judgment? (3) does the amount of calculated compensations pose a risk to public finance discipline? Answers were obtained through a survey addressed to randomly selected local government units. The study covered the period 2019–2023. Findings: In at least 37.5% of the surveyed units, interpretations of the provisions accept that public finance sector entities have the right to compensation. The ECJ Judgment did not result in a widespread cessation of compensation calculation by public finance sector entities. However, the average annual value of calculated compensations exceeds the minimal amount accepted in public finance discipline regulations, posing a risk of disciplinary responsibility.Research limitations/implications: Many units do not charge compensation. However, determining whether they have the right to charge the compensation was not within the scope of this article’s research focus.Originality/value: The study provides insights into practices among public finance sector entities in Poland regarding the calculation of incidental claims in commercial transactions and assessing the impact of the ECJ’S Judgment.

This chapter provides an overview of Intellectual Capital (IC) in practice and beyond. It focuses on the role of IC in organizations and between organizations, institutions and beyond. Arguably, IC is having a resurgence, because a new reporting framework Integrated Reporting (IR) makes use of IC as part of its six capitals framework International Integrated Reporting Council (IIRC). The chapter examines the path that critical IC research has followed from its conception until today and reflects on the possible future path for critical IC research. In order to extend the frontiers of IC research beyond 'what is' into stage three research investigating IC in practice from a critical and performative perspective, and stage few research influenced by critical social and environmental accounting, a number of future research avenues are explored within the New Zealand public sector. Given a general acceptance of IC, understanding how the public sector views IC will become increasingly important.

PurposeEuropean countries are likely to increasingly adopt integrated reporting (IR) voluntarily, after the 2014/95/EU Directive is revised and other initiatives are implemented. Therefore, the present study provides insights on the relevance of IR in voluntary contexts by exploring analysts' reactions to the release of integrated reports in diverse institutional settings.Design/methodology/approachDrawing on voluntary disclosure theory, a quantitative empirical research method is used to explore the moderating role of country-level institutional characteristics on the associations between voluntary IR release and analyst forecast accuracy and dispersion.FindingsIR informativeness is not uniform in the voluntary context and institutional settings play a moderating role. IR release is associated with increased consensus among analyst forecasts. However, in countries with weak institutional enforcement, a reverse association is detected, indicating that analysts rely largely on IR where the institutional setting strongly protects investors. Although a strong institutional setting boosts the IR release usefulness in terms of accuracy, it creates noise in analyst consensus.Research limitations/implicationsAcademics can appreciate the usefulness of voluntary IR across the institutional enforcement contexts.Practical implicationsManagers can use these findings to understand opportunities offered by IR voluntary release. The study recommends that policymakers, standard setters and regulators strengthen the institutional enforcement of sustainability disclosure.Originality/valueThis study is a unique contribution to recent calls for research on the effects of nonfinancial disclosure regulation and on IR “impacts”. It shows on the international scale that IR usefulness for analysts is moderated by institutional patterns, not country-level institutional characteristics.

PurposeThe purpose of this paper is to evaluate the implementation of the integrated reporting (IR) framework in a group of Colombian enterprises.Design/methodology/approachThis is a multiple-case study in six enterprises that use the IR framework. The selected enterprises, all of which were located in either Bogota or Medellin, were Argos, EEB, EPM, ISA, Nutresa and Ocensa. The authors conducted individual interviews of reporters and performed a documentary analysis.FindingsThe few Colombian firms that use the IR framework all have ambitious expansion goals in the medium term. The main reason for the adoption of the IR framework in these firms is that it facilitates access to resources from new foreign investors.Research limitations/implicationsSince the framework was published recently, only a few Colombian firms follow it, and several of them do not apply all of its components. In the future, there will be more reports and a higher level of framework application.Practical implicationsIn the firms studied, the IR framework is an important tool to support the search strategies of new sources of financial capital.Social implicationsIf the use of the International Integrated Reporting Council (IIRC) framework were to diminish the application of the GRI, firms would be less likely to evaluate the impact of their activities on numerous stakeholders (other than shareholders).Originality/valueThis is the first Colombian study of IR to include both documentary analysis and personal interviews.

This chapter provides a comprehensive discussion of materiality and assurance in the context of Integrated Reporting (IR). On the one hand, materiality has gained much importance following the introduction of IR, since one of the main objectives of this innovative form of reporting is to reach conciseness. On the other hand, assurance may play a crucial role in conferring reliability to the materiality determination process proposed by the International Integrated Reporting Council (IIRC) and to the whole process of IR. This chapter provides a discussion of the state of the art of materiality and assurance in the context of non-financial information and, more specifically, IR. It also points out some of the main challenges the IIRC materiality determination process will have to face in order for companies to implement it correctly. Finally, drawing on the peculiarities of IR, the chapter points out some issues that will have to be discussed regarding assurance and its effectiveness. Some insights for future development of the debate are also proposed.

The existence of the public sector is conditioned by meeting the needs of citizens for public goods and services. Business under constant public scrutiny poses challenges to public sector entities in the form of effectiveness and efficiency in providing services on the one hand, and achieving satisfactory financial performance on the other. Measuring the performance of entities in the public sector can be problematic precisely for the reason that it is necessary to measure the performance of entities whose operations are aimed at meeting public needs and not at making a profit. Therefore, the goals of these entities are taken as a starting point when establishing an adequate performance measurement system. Bearing in mind that the public sector is at the service of the citizens of a country, the question of measuring business performance, as well as the question of public supervision in public sector entities, arises. State audit, financial management and control and internal audit, as elements of public supervision, should ensure fair and true presentation of results and performance of business in public sector entities.

The convergence and compliance process initiated at international level hasinfluenced also the accounting system of the public sector entities from Romania. Taking intoaccount the fact that the fixed tangible assets represent an important part of the total assets ofthe public sector entities, and therefore, they are indicative in presenting the financialposition, by this essential research we structure the issue of the fixed tangible assets in termsof the accounting policies applicable into the public sector from Romania. By dual analysis,that is national regulations versus International Public Sector Accounting Standards, weidentify the interferences and limits of the accounting policies specific to the fixed tangibleassets from the public sector in Romania and we propose alternatives to answer the realneeds of the national public sector entities. This research is based upon a synthesis of theideas on this theme published into the professional literature, the regulations issued by thenational and international accounting regulators, by organisms belonging to the accountingprofession.

The Need for Public Sector Consolidated Financial Statements

Introduction. The importance of studying topical issues of non-financial information formation and preparation of non-financial reporting by public sector entities, in particular, sustainable development reporting, is obvious from the standpoint of increasing the role and importance of public sector institutions in the national economic system. Problem Statement. The issue of non-financial reporting in the context of the implementation of institutional measures related to the improvement of reporting on sustainable development in the context of crisis phenomena in the economy, increasing the role of accounting and the accounting profession in achieving the Sustainable Development Goals should be considered from the standpoint of studying the international experience of standardizing non-financial reporting and updating Sustainability Report. The study of the conceptual foundations of integrated reporting, methodology and organization of its analytical support on the basis of risk analysis related to the activities of public sector institutions is being updated. Given the de facto military actions, economic practice is undergoing a reset to survive in war conditions. The transition to sustainable development will be possible when the conditions for stabilizing the development of the domestic economy are established. The purpose is to analyse the existing approaches to the formation of non-financial information, to generalize the procedure for its reflection in the form of open data in reporting on sustainable development of public sector entities from the point of view of their recognition as subjects of high public interest. Methods. Logical and abstract, based on elements of the methods of theoretical generalisation, analysis, grouping, comparison; structural and institutional analysis with a description of options for identifying facts of violation of the integrity of the accounting and analytical system. Conclusions. The issue of the formation of non-financial information and the preparation of non-financial reporting based on it was investigated in terms of ​​considering the functions of regulatory bodies in the process of standardizing approaches to the formation of reporting on sustainable development, in particular by public sector entities through the identification of provisions that need to be taken into account in practical activities. The innovative role of the accountant in the preparation of non-financial reporting, the development of provisions for its audit, and in the processes of improving the accounting system related to the procedures for displaying reliable information in reporting on sustainable development has been proven.