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Integrated Reporting

Useful for investors?


Stefan Hannen

The introduction of Integrated Reporting (IR) is supposed to tackle shortcomings of corporate reporting that have been criticized for decades. The new reporting format intends to improve the understandability of corporate reports and broaden their often merely financial and backward-looking perspective. This study investigates the usefulness of IR for investors. A conceptual analysis provides an in-depth examination of the IIRC’s International Framework, the basis to prepare integrated reports. An empirical analysis examines the presence of IR in existing reports from South Africa and the USA, before testing potential consequences for the capital market. The findings have implications not only for investors, but also for the reporting firms, regulators and academics.

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6 Summary and conclusions


6    Summary and conclusions

The previous chapters have investigated IR from both a conceptual and an empirical perspective. This final chapter summarizes these analyses and puts their findings into the overall context of this study, as outlined in chapter 1. The implications for investors, preparers and regulators are elaborated, as well as the contributions of the findings. This chapter ends with a consideration of the limitations, from which it derives opportunities for future research.

6.1      Summary of the conceptual and the empirical analysis

With the release of the International Framework in December 2013, the IIRC has reached its first goal to develop a framework for IR. This guidance document constitutes the centerpiece of regulation on this new reporting approach. Against the background of various shortcomings in traditional reporting, the framework establishes Fundamental Concepts, Guiding Principles and Content Elements that govern an integrated report. The objective of such a report is to explain investors how the firm creates value and thus to assist them in making investment decisions. IR shall overcome the shortcomings in corporate reporting, such as excessive length and difficulty of firms’ reports, a too narrow focus on financial aspects and past events as well as the silo structures in the reports.

This study examined IR from an investor perspective. It analyzed whether IR is useful for investors. In particular, it investigated the following two research questions:

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