The Influence of Corporate Social Responsibility Measures on Investors’ Judgments when Integrated in a Financial Report versus Presented in a Separate Report

Posted: 24 Jun 2019

See all articles by Anthony Bucaro

Anthony Bucaro

Case Western Reserve University

Kevin E. Jackson

University of Illinois at Urbana-Champaign - Department of Accountancy

Jeremy B. Lill

University of Kansas

Multiple version iconThere are 2 versions of this paper

Date Written: May 14, 2019

Abstract

This study examines the effect on investors’ judgments of corporate social responsibility (CSR) measures when integrated with financial information in a single report versus when presented in a separate CSR report. Advocates for integrated reports argue that CSR information will be perceived as more relevant and have a greater impact on users when observed in an integrated report. However, we provide experimental evidence that CSR measures have greater influence on investors’ judgments when investors observe the CSR information and financial information depicted in separate reports. We also provide evidence that this greater influence of CSR measures is caused by investors’ evaluations taking on a “multidimensional perspective,” that includes both a social responsibility and a financial dimension, which is triggered by observing the separate CSR report. Activating a social responsibility dimension elevates the perceived relevance of CSR measures, increasing their influence on investors’ judgments. Our study contributes to practice by highlighting a potential unintended consequence of issuing integrated versus separate CSR reports: that investors incorporate CSR information less when it is integrated with financial information versus separately reported.

Keywords: Corporate Social Responsibility, CSR disclosures, financial reporting, integrated reporting

Suggested Citation

Bucaro, Anthony and Jackson, Kevin and Lill, Jeremy B., The Influence of Corporate Social Responsibility Measures on Investors’ Judgments when Integrated in a Financial Report versus Presented in a Separate Report (May 14, 2019). Contemporary Accounting Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3406118

Anthony Bucaro

Case Western Reserve University ( email )

10900 Euclid Ave.
Cleveland, OH 44106
United States

Kevin Jackson

University of Illinois at Urbana-Champaign - Department of Accountancy ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

Jeremy B. Lill (Contact Author)

University of Kansas ( email )

Department of Accounting
School of Business
Lawrence, KS 66045
United States

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