Saying More with Less? Disclosure Conciseness, Completeness and Balance in Integrated Reports

47 Pages Posted: 29 Oct 2016 Last revised: 5 Feb 2017

See all articles by Gaia Melloni

Gaia Melloni

HEC Lausanne - Department of Accounting and Control

Ariela Caglio

Bocconi University - Department of Accounting; SDA Bocconi

Paolo Perego

Free University of Bozen-Bolzano

Date Written: January 15, 2017

Abstract

The Integrated Reporting (IR) Framework of 2013 represents the latest international attempt to connect a firm’s financial and sustainability (i.e., environmental, social and governance) performance in one company report. An IR should communicate “concisely” about how a firm’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of sustainable value. At the same time, an IR needs to be “complete and balanced”, i.e., broadly including all material matters, both positive and negative, in a balanced way. Drawing on impression management studies, we examine a selection of performance determinants to gain insights into the factors associated with conciseness, completeness and balance in IR. The results from a sample of IR early adopters show that in the presence of a firm’s weak financial performance, the IR tends to be significantly longer and less readable (i.e., less concise), and more optimistic (i.e., balanced). We additionally find that firms with worse social performance provide reports that are foggier (i.e., less concise) and with less information on their sustainability performance (i.e., are less complete). Our evidence implies that IR early adopters employ quantity and syntactical reading ease manipulation as well as thematic content and verbal tone manipulation as impression management strategies. The results also suggest that such strategies depend not only on the level of firms’ performance but also on the type of performance (financial versus nonfinancial/sustainability). This paper adds to the limited literature on IR in sustainability accounting as well as to the research in mainstream financial accounting that examines disclosure quality using textual analysis.

Keywords: Integrated Reporting, Sustainability, Conciseness, Completeness, Disclosure, Textual Analysis, Impression Management

Suggested Citation

Melloni, Gaia and Caglio, Ariela and Caglio, Ariela and Perego, Paolo, Saying More with Less? Disclosure Conciseness, Completeness and Balance in Integrated Reports (January 15, 2017). Forthcoming, Journal of Accounting and Public Policy, Available at SSRN: https://ssrn.com/abstract=2861056 or http://dx.doi.org/10.2139/ssrn.2861056

Gaia Melloni

HEC Lausanne - Department of Accounting and Control ( email )

UNIL Dorigny
Lausanne, Lausanne 1015
Switzerland
1015 (Fax)

HOME PAGE: http://hec.unil.ch/people/gmelloni?dyn_lang=fr

Ariela Caglio (Contact Author)

Bocconi University - Department of Accounting ( email )

Via Roentgen 1
Milan, 20136
Italy

SDA Bocconi ( email )

Via Bocconi 8
Milan, Milan 20136
Italy

Paolo Perego

Free University of Bozen-Bolzano ( email )

Faculty of Economics and Management
Piazza dell'Università 1
Bozen-Bolzano, 39100
Italy

HOME PAGE: http://https://shorturl.at/i52lr

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
674
Abstract Views
3,129
Rank
84,733
PlumX Metrics