Publication: INTEGRATED REPORTING ELEMENTS AND PRINCIPLES IN ASIAN PUBLIC LISTED COMPANIES’ REPORTS: AN INSTITUTIONALIST APPROACH
Date
2021-02
Authors
NURUL WAHIDA BINTI ABDULLAH
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Abstract
An effective disclosure of corporate information has increasingly becoming more
critical as the world market begins a long shift toward a higher share of market-based
financing. In the future, Integrated Reporting (IR) is expected to play a bigger role in
promoting understanding of interdependencies between various capitals that a
company has and support integrated thinking, decision-making and actions that focus
on the creation of value over the short, medium and long term. Motivated by the rise
of IR and taking into consideration the nonmandatory stage of IR in most countries,
this study aims to provide evidence on the extent of which IR related elements and
principles have been incorporated in various companies’ reporting medium with a
specific focus on top companies from selected Asian countries namely Malaysia,
Singapore, India and Japan. This objective is achieved through content analyzing a
total of top 120 companies listed in the stock exchange of the respective four
countries, using two indices i.e. Content Elements and Guiding Principles. Using
institutional theory as a basis, further analysis is conducted to test the potential role
of three institutional factors on the extent of IR reporting. The findings show all 120
companies are disclosing information similar to what has been listed under the
content elements and the guiding principle of the IIRC framework with none of the
companies scoring 0 for both indices. These findings suggest that Asian public
limited companies are not very far behind when it comes to IR reporting as compared
to what is expected by the IR Framework. In testing the role of institutional factors in
Asian companies IR, the findings show, political and economic systems play
significant roles in differentiating the extent of IR content element while cultural and
economic systems play a significant role in differentiating the use of IR guiding
principles. The findings from this study are considered as pertinent as they provide
evidence not only on the existence of IR elements and principles in Asian companies’
corporate reports but also the role of institutional factors to influence companies’
decision on reporting. These could be used by respective Asian regulators to
formulate future plans on their respective financial reporting regulation.