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Do mandatory and voluntary adoption of integrated and sustainability reporting influence value creation?
Department of Accounting and Finance, Urmia University, Urmia, Iran.
Department of Accounting and Finance, Urmia University, Urmia, Iran.
University of Gävle, Faculty of Education and Business Studies, Department of Business and Economic Studies, Business administration.ORCID iD: 0000-0002-2536-0446
Department of Accounting and Finance, Urmia University, Urmia, Iran.
2024 (English)In: Journal of Accouting & Organizational Change, ISSN 1832-5912, E-ISSN 1839-5473Article in journal (Refereed) Epub ahead of print
Abstract [en]

Purpose: This paper aims to investigate how integrated reporting quality (IRQ), as well as comprehensive disclosure score (CDS) (i.e. incorporating integrated and sustainable reporting quality), impacts value creation differently between companies operating under mandatory versus voluntary adoption of these reporting frameworks. Design/methodology/approach: The sample comprises 1,195 firm-year observations (international data set) from 2018 to 2022, which are divided into groups based on mandatory vs voluntary adoption of the international integrated reporting framework (IIRF) and Sustainability Accounting Standards Board (SASB). Furthermore, regression analysis is used in the analyses. Findings: The findings revealed a significant and positive relationship between IRQ and value creation on a global scale. In addition, unlike voluntary adoption of the IIRF, mandatory adoption of it showed a significant and positive relationship between IRQ and value creation. Furthermore, an increase in the CDS had a greater impact on value creation compared to IRQ. Finally, in contrast to companies with voluntary adoption of both IIRF and SASB, companies with mandatory adoption of them exhibited a significant and positive relationship between these reports and value creation. Practical implications: The findings have practical implications for various stakeholders. First, by enhancing the awareness and understanding of integrated reporting and sustainability reporting among users, these results can facilitate more informed economic decision-making and enable a more accurate assessment of a company's potential for value creation. Second, these findings can contribute to the development of more effective and tailored reporting guidelines that align with the nuances of value creation dynamics in different contexts. Ultimately, this research can lead to improvements in reporting practices and regulatory frameworks, benefiting both companies and their stakeholders. Social implications: The study's social implications are significant as it offers insights into the global debate surrounding the adoption of the IIRF and the objectives of the merger involving the Value Reporting Foundation and the International Financial Reporting Standards Foundation. The findings provide a concrete basis for evaluating the value of adopting the IIRF and inform discussions on the future of reporting standards and practices. Originality/value: Furthermore, it stands as one of the pioneering endeavors to investigate the value creation aspects of CDS. These unique aspects make a substantive contribution by expanding the frontiers of knowledge in the realm of corporate reporting and financial implications, offering novel insights and opportunities for further research in this crucial domain.

Place, publisher, year, edition, pages
Elsevier , 2024.
Keywords [en]
Integrated reporting quality; Mandatory adoption; Sustainability reporting quality; Value creation; Voluntary adoption
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:hig:diva-45390DOI: 10.1108/jaoc-12-2023-0232ISI: 001296570500001Scopus ID: 2-s2.0-85201941590OAI: oai:DiVA.org:hig-45390DiVA, id: diva2:1894126
Available from: 2024-09-02 Created: 2024-09-02 Last updated: 2024-12-16Bibliographically approved

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Homayoun, Saeid

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