Analysis of Voluntary Disclosure Before and After the Establishment of the Integrated Reporting Framework

Abstract

Objective - The goal of integrated reporting is to enhance the cohesiveness and efficiency of corporate reporting. It encourages organizations to create greater value by identifying the factors that have a material impact on its operations. The Integrated Reporting (IR) Framework guides the overall content of an integrated report through the Guiding Principles and Content Elements. The Framework has eight elements. This study explores the level of voluntary disclosure of information related to these eight elements by companies listed on the Bursa Malaysia before and after the establishment of the Framework. Methodology/Technique - This study examines the annual reports of 603 Main Market listed companies of Bursa Malaysia between 2012 and 2015. The year 2012 is referred to as the "pre-issuance period" while 2015 is referred to as the "post issuance period". Findings - The findings of the study show that the companies that do disclose more information, do so in relation to three out of the eight elements only. These are: governance, strategy and resource allocation, and outlook. Overall, there is a lack of lineage among the information related to the IR elements presented in the annual reports. Novelty - The findings demonstrate the need for the full adoption of integrated reporting in Malaysia. Type of Paper Empirical Keywords: Content Elements; Integrated Reporting Framework; Listed Companies; Pre and Post Issuance Period; Voluntary Disclosure. JEL Classification: M40, M41, M49.

Integrated Reporting: A Jurisdictional Review on the Progress of Implementation

“…The rest of the content elements regressed compared to the levels before the release of the 2013 IR framework. The results indicate that there is more work required in the promotion of the adoption of IR in Malaysia, with more collaboration between the reporting regulatory bodies, government and professionals (Jaffar, Nor and Selamat, 2018). c)…”

“…A comparison of voluntary disclosure before and after the release of the 2013 IR framework can be used as a measure to determine if IR has had an impact on Malaysian voluntary disclosure. In a study by Jaffar, Nor and Selamat (2018), IR showed improvement in voluntary disclosure in three content elements, governance, strategy and resource allocation, and outlook. The rest of the content elements regressed compared to the levels before the release of the 2013 IR framework.…”

Understanding integrated reporting and the United Nations sustainable development goals : An accounting educational case

“…<IR>'s overall quality remains low, failing to provide sufficient, comparable, material, and reliable information [30] [31] [32] [33]. For example, [31] argues that after adopting <IR>, organisations disclose more information on governance, resource allocation, and outlook, without considering the connectivity among the information. Reference [33] argues that <IR> practices have not achieved the expected level of transparency despite the increased level of disclosure.…”

Non-financial reporting and company financial performance: a systematic literature review and integrated framework

“…Since the application of IRF in 2013, the authors have created their own binary coding systems to evaluate the quality of reporting based on this framework (Lee and Yeo, 2016; Zhou et al , 2017; Jaffar et al , 2018; Adegboyegun et al , 2020). Others have made use of existing evaluation sources such as the Ernst and Young (EY) Reports, Thompson Reuters Assets database and REBOCOSAM, Bloomberg, DataStream, etc.…”

“…Extant literature into the relationship between financial performance and the quality of non-financial reporting is segmented. Studies either focus on integrated reporting and performance, sustainability reporting and performance or corporate governance practices and performance (Garg, 2015; Lee and Yeo, 2016; Munshi and Dutta, 2016; Barth et al , 2017; Zhou et al , 2017; Jaffar et al , 2018). Additionally, the terms financial performance and financial sustainability are defined differently by authors, and the proxies used for assessing the quality of non-financial reporting are not standardised.…”