Exploring integrated reporting's influence on international firms' value relevance

Abstract

Purpose

Analyzing the impact of integrated reporting (IR) on international firms' value relevance, considering diverse information such as income, cash flows, risks, uncertainties and various capitals.

Design/methodology/approach

This paper used a sample of 300 international companies between 2010 and 2019. This paper collected the data from the Thomson Reuters Eikon database. Quantitative methods were used to test the hypotheses. Furthermore, the feasible generalized least squares (FGLS) method was performed to test the hypotheses.

Findings

The results suggest that IR and value relevance positively correlate, confirming the hypothesis. Moreover, this paper verified these results by conducting robustness tests on the contribution of the framework and guidelines prepared by the International Integrated Reporting Council (IIRC) in 2013.

Practical implications

This study enables users to evaluate company transparency and the relevance of disclosed nonfinancial information, providing valuable insights for report preparers and investors seeking profitable opportunities.

Originality/value

The interest in this research was motivated by the authors’ research field, which is innovative, as few studies have been conducted to explain the relationship between IR and value relevance. Similarly, this paper incorporated into their analysis the importance of the framework created by the IIRC in 2013 in preparing and presenting an integrated report. This paper considered the contribution of this framework to the creation of information content. This design has been overlooked in previous studies. However, this paper mobilized the FGLS method, which has been little used in previous studies.

Citation

Hichri, A. and Alqatan, A. (2024), "Exploring integrated reporting's influence on international firms' value relevance", International Journal of Ethics and Systems, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJOES-11-2023-0249