Integrated Reporting's Adoption, Determinants, and Consequences
: An International Evidence

  • Jason Valentine Watson

    Student thesis: Doctoral Thesis


    The International Integrated Reporting Council (IIRC) has advertised the many benefits of Integrated Reporting () as the future of corporate reporting. The innovative is intended to simplify multiple year-end reports into 'one report', providing a concise 'holistic' future- orientated organisation view. Adopting an integrated thinking view enables management to address material issues that connect financial and non-financial information.

    The research has undertaken a deductive cross-sectional and longitudinal quantitative approach to investigate how innovations in corporate reporting diffuse globally and the influences on the adoption decision through the lens of the Diffusion of Innovation (DOI) theory. In exploiting content analysis to measure information quality by utilising 'DICTION' software, with the novel developments of TQDS (Total Quality Disclosure Score) and readability scores. Finally, the consequences (benefits) of adoption were assessed on financial metrics, including ESG (Environmental, Social & Governance), profitability and value.

    The results, based on total firm-level adoptions, indicate the global adoption rate for IFRS and GRI is 5% and 11.1% for , with the DOI category for IFRS in the late majority stage (67%), with GRI (10.1%) and (3%) in the early adopter stage. The determinants impacting adoptions include country-level environmental performance, institutional collectivism, and future-orientated values but are adversely affected by the regulatory quality and political stability. The firm-level factors include size, listing, and assurance. A large proportion of companies analysed had applied an 'additional' sustainability framework crucial to adoption. The consequences of adoption include improved quality, readability, tone, and sentiment from the IRF. With a positive impact on TOBINQ, Enterprise Value, Retained Earnings, and Market Capitalisation. Additionally, the positively impacts Eikon Environmental and Bloomberg Social scores.

    The evidence indicates that is adopted as a preventative innovation to mitigate future risk and uncertainty. Consequently, the study results confirm three advertised benefits of adoption - i) Increased quality disclosures, ii) Balanced and connectivity of information, and iii) Increased market valuation, which results in improved stakeholder engagement and expectations.

    The 'circular' assessment of makes a significant and original contribution to knowledge by identifying the global adoption rates, DOI adopter category of IFRS, GRI, and . The type of innovation, including expanding the quality and readability measures. Consequently, providing evidence of the slow diffusion and global penetration of voluntary sustainability reporting. This enables more insightful and difficult decisions concerning whether environmental policy should become mandatory.
    Date of Award14 Feb 2023
    Original languageEnglish
    SupervisorAwad Ibrahim (Supervisor) & Khaled Hussainey (Supervisor)

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