Unveiling Stakeholder Perceptions of Integrated Reporting: An Empirical Analysis
Dr Shiv Lal Parmar
Assistant Professor
Department of Accountancy and Business Statistics,
Shri Govind Guru Govt. College, Banswara, Rajasthan
Email: shivlalparmar.29@gmail.com
&
Dr Shilpa Vardia
Assistant Professor
Department of Accountancy and Business Statistics,
Mohanlal Sukhadia University, Udaipur, Rajasthan
Email: shilpa.vardia@gmail.com
Abstract
Integrated reporting (IR) refers to the representation of the financial and non-financial performance of a company in a single report. In India, corporate reporting has evolved significantly over the last ten years to provide more transparent, relevant, and comprehensive information to key users and stakeholders. The study explores stakeholders' perceptions of the impact of integrated reporting. 14 key benefits of IR and 6 key challenges relating to IR have been identified based on the annual report stakeholder’s perceptions and consulting with academicians, practising chartered accountants (CA) and company secretaries (CS), students pursuing chartered accountants and company secretaries courses, IR students, and investors. To ascertain the differences in the opinions of users, they were classified into various categories (gender, age, qualification, and occupation). The opinion age-wise (less than 25 years, 25 to 40 years, and 40 to 40 years).Only five of the fourteen questions show a significant difference. The opinion on challenges age-wise (less than 25 years, 25 to 40 years, and 40 years) Out of 6 questions, in only 2 questions is a difference found to be significant.
Introduction
Nonfinancial reporting has become more important in recent decades, and new reports, such as environmental and CSR reports, have been published. The reporting trend shifts as reports increase in volume. There is still higher pressure to reduce this number, and a possible solution offers Integrated Reporting (IR).
Integrated reporting clearly explains how a company's strategy, governance, performance, and prospects in the external environment, environment contribute to the creation of value over the short, medium, and long term. The International Integrated Reporting Council (IIRC) is an international association of standard-setters, companies, investors, regulators, accounting experts, and NGOs. The IIRC is in charge of directing the global development and uptake of the integrated reporting framework. In making decisions, common users heavily rely on corporate disclosure. (Hahn and Kuhnen, 2013) 1. However, the current trend towards multidimensional reports and/or integrated reports still coexists with g several one-dimensional reports [Institute of Directors in Southern Africa (IOD), 20092; Abeysekera, 20133]. However, only businesses that simultaneously and primarily report on sustainability, including its economic and financial dimensions as well as its social and environmental aspects, may be regarded as integrated report issuers. These organizations should view their business model as a comprehensive system that considers cross-effects on the value chain and long-term ramifications, such as the relationship between the past, present, and future. Only if businesses strive to build and maintain value over time will the IR strategy be successful. Integrated reporting is consistent with numerous developments in corporate reporting occurring within national jurisdictions worldwide.
From the stakeholders' perspective, it is crucial to comprehend users' preferences for integrated reporting information, the value of integrated reporting for stakeholders, and users' familiarity with integrated reporting.
The study's objectives are to explicitly seek out the user's perspective about a wide range of disclosure items, investigate issues surrounding the use of various information sources in the formulation of integrated reporting disclosures, and present an analysis of survey results on respondents' perceptions of the value of financial and non-financial information in integrated reporting in India.
Review of Literature
(Mishra, Nurullah, &Sarea, 2021) 4in this paper, the author analyzed the top 500 companies on the ET 500 list. The questionnaire-based study examined the status of IR in 431 companies. To identify the key factors influencing how people perceive companies, principle component analysis, a dimensionality reduction technique, was applied to the responses.
(Velte, 2021)5in this research, the author selected 85 qualitative peer-reviewed archival studies on IR adoption and IR quality. The goal of this study was to provide a thorough understanding of the governance, financial performance, and reporting-related factors that influence internal reporting (IR) and how it contributes to firm value by the business case argument.
(Soriya&Rastogi, 2021) 6 In this study, the authors argued that more case studies and empirical research are needed to develop assurance models, analyze Asian shareholders' perceptions, harmonize financial and non-financial standards, and study the integrated reporting of unlisted companies.
(Oyarce, Gallegos, Flores, &Gallizo, 2021) 7 In this study, the author synthesizes the information on the use of integrated reporting as a data source and conducts a bibliometric analysis of 268 articles that were published in the Web of Science database between 2011 and 2019. The two most frequently used keywords, management and sustainability, exhibit a high degree of interconnection.
(Roman, Mocanu, &Hoinaru, 2019) 8 To understand the preferences of integrated reporting information users, the significance of integrated reporting for stakeholders, and users' awareness of integrated reporting, a survey was also conducted. The authors concluded that integrated reporting aims to make the information available to lenders of capital better by promoting a more streamlined and effective approach to corporate reporting.
Bernardi& Stark (2018) stated that the level of environmental, social, and governance disclosure is a moderating variable in determining the effectiveness of integrated reporting.
(Clayton, Rogerson, &Rampedi, 2015) 10 explained that conventional company reports on annual financial performance, sustainability, and governance disclosures often fail to make the connection between the organization’s strategy, its financial results, and performance on environmental, social, and governance issues.
(Kumar, 2000) 11 argued that good corporate governance necessitates that companies voluntarily disclose all information necessary to evaluate their performance, even if it is not mandated under the law.
(Marston & Shrives, 1991) 12 explained that a comprehensive list of the items that may be disclosed in company reports is called a disclosure index. The extent of disclosure for a specific company can be measured by calculating an index score, but the quality of the disclosure is not always reflected.
(Lal, 1985)13 also highlighted that Common users make important decisions based on corporate disclosures. The dissemination of information about a company's performance is its main duty.
Research Gap
According to a review of the integrated reporting literature, numerous studies have examined corporate disclosure concepts and emphasized the need for improved procedures. The perception of integrated reporting's advantages and difficulties by stakeholders has not been studied in India.
Objectives of the Study
The survey aimed to get information on the following key areas:
Hypotheses:
H01 Based on demographic characteristics, there is no significant difference in the perceptions of various Indian stakeholders about the benefits of Integrated Reporting.
H02 There are no significant differences in the perceptions of various Indian stakeholders about the challenges of Integrated Reporting based on demographic characteristics.
Research Methodology:
The current study is a survey of potential users of annual reports to know about their preferences and the issues they encounter when using integrated reporting information. The stakeholders include investors, academicians, accountants and auditors, and students.
The survey data is collected on a 5-point Likert scale to study the user's needs. To determine the differences in user opinions, they were classified into various demographic categories (gender, age, qualification, and occupation). We used the Mann-Whitney U Test and the Kruskal-Wallis Test to determine user opinion differences.
Questionnaire Design and Sampling Procedure: The survey focused on respondents who are users of annual reports. The survey began with demographic questions about the user's personal information, qualifications, and profession. The stakeholders targeted include accountants and auditors, academics, professional investors, and accounting educators.
Response Rate: The method of the survey was questionnaire-based. However, different stakeholder groups may have different requirements. To achieve this goal, responses from homogeneous user categories would have been required. As a result, a sample of 162 students, 178 academicians, 161 investors, and 119 chartered accountants and auditors with knowledge of corporate annual reports was chosen. The sample included members who expressed an interest in annual reporting as well as an occupational category that uses annual reports of corporate information. Out of the total 161 investor questionnaires distributed, 58 investors responded; the investor response rate was 36.02%. The corresponding figures were 35.95%, 47.05%, and 24.69% for academics, accountants and auditors, and students, respectively. The questionnaire was completed by 218 of the 620 respondents who were targeted, with a response rate of 35.16% overall. This is presented in Table 1.
Table 1: Response Rate:
|
Occupations |
Number of people surveyed |
number of responses |
Percent of responses (response rate) |
|
Investors |
161 |
58 |
36.02 |
|
Academicians |
178 |
64 |
35.95 |
|
Accountants and Auditors |
119 |
56 |
47.05 |
|
Students |
162 |
40 |
24.69 |
|
Total |
620 |
218 |
35.16 |
Source: Own Compilation
Data Analysis and Discussions
The primary information that the researcher gathered through the distribution of the questionnaire is presented in this section. It includes data on companies' compliance with the disclosure requirement, factors influencing the extent of annual report disclosure, qualitative information about integrated reporting (importance and challenges), important content in integrated reporting, and users' perceptions of integrated reporting content.
Demographic characteristics of stakeholders:
Before presenting the survey results, it is necessary to provide a general description of personal background information for participation in the questionnaire survey. As a result, respondents were asked to provide background information about their workplace, job type, employment history, and qualifications.
Table 2: Respondents’ Demographic profile
|
(A) Gender-Wise |
|||||||
|
Male |
Female |
||||||
|
161(73.85%) |
57(26.15%) |
||||||
|
(B) Qualification-Wise |
|||||||
|
UG |
PG |
CA |
CS |
Others |
|||
|
19(8.72%) |
87 (39.51%) |
45 (20.64%) |
9(4.13%) |
58(26.61%) |
|||
|
(C) Age Wise |
|||||||
|
Less than 25 year |
25 To 40 year |
40 to 60 above |
|
||||
|
34(15.60%) |
154(70.64%) |
30(13.76%) |
|
||||
|
(D) Occupation Category Wise |
|
||||||
|
Investor |
Academician |
Accountant & Auditor |
Student |
|
|||
|
58 (26.61%) |
64(29.36%) |
56(25.69%) |
40(18.35%) |
|
|||
Source: Own Compilation
Reliability and Normality test
Cronbach'salpha has been used in the questionnaire to determine the internal consistency of the coefficient for reliability testing. Our reliability coefficient on the questionnaire was greater than 0.70 for all items, indicating that the items have relatively high internal consistency. It was also shown in Table 3.
Table 3 Reliability Statistics of the Questionnaire
|
Dimensions |
Number of Items |
Cronbach's Alpha |
|
Benefits of integrated reporting |
14 |
0.91 |
|
Challenges of Integrated Reporting |
6 |
0.83 |
Source: Own Compilation
A normality test determines whether sample data was drawn from a population with a normal distribution. To determine whether the sample data were normally distributed or not, we used the Kolmogorov-Smirnov test (KS test). We discovered that the p-value was less than 0.05 at a 95% significance level in a few questions after using the KS test. Because the responses were not normally distributed, we used a non-parametric test to determine the variable results.
Opinions of Stakeholders' Perceptions of the Benefits of Integrated Reporting:
A question about target groups' perceptions of the benefits of integrated reporting in corporate annual reports is examined here. (Main &Hespenheide, 2012) 14 Challenges and benefits were involved in preparing the concept of integrated reporting.
The participants were asked to rate how much they agreed or disagreed with the statement regarding the benefits of integrated reporting and its importance for decision-making. (James, 2014)15The information included in the integrated report that was most important relates to the environment, safety, employees, community, and corporate governance.
(Botosan, 1997)16 Argued that the disclosure quality of such information is considered to be “very difficult to assess.” To achieve this goal, a Likert scale was used to grade respondents' responses, which ranged from one for "strongly agree" to five for "strongly disagree."
The findings in Table 4 show that the majority of respondents strongly agree or agree that integrated reporting offers consistent information benefits over time. The table displays the mean and coefficient of variance of all respondents' responses on the various advantages of integrated reporting.
Table 4: Opinions of Stakeholders on the Benefits of Integrated Reporting
|
S.No. |
Q.No. |
Benefits of Integrated Reporting |
Mean |
CV |
|
1 |
1 |
Using integrated reporting can help you think and manage more holistically. |
1.12844 |
32.06112 |
|
2 |
14 |
Integrated reporting provides greater insight into the factors driving business performance |
1.233945 |
47.66549 |
|
3 |
11 |
An integrated report explains what management will do to tackle challenges |
1.252294 |
48.21894 |
|
4 |
12 |
Integrated reporting improves organizational employee engagement |
1.256881 |
45.06366 |
|
5 |
4 |
Integrated reporting provides more efficient reporting for stakeholder's strategy and resource allocation |
1.266055 |
45.04265 |
|
6 |
5 |
Integrated reporting is a bridge between management information and priority topics relevant to investors and other stakeholders |
1.266055 |
46.91843 |
|
7 |
8 |
Integrated reporting establishes a sound internal control process |
1.270642 |
43.74096 |
|
8 |
3 |
Integrated reporting improves corporate reputation and stakeholder relationships. |
1.275229 |
52.55977 |
|
9 |
10 |
Integrated reporting discloses negative aspects of performance as well as positive aspects |
1.288991 |
49.06413 |
|
10 |
7 |
Integrated reporting helps improve reliability and completeness |
1.293578 |
50.11886 |
|
11 |
6 |
Integrated reporting clearly explains the process for assessing materiality |
1.307339 |
50.45297 |
|
12 |
2 |
Integrated reporting provides greater clarity on business issues and performance |
1.330275 |
38.26262 |
|
13 |
9 |
An integrated report clearly explains why particular Key Performance indicators(KPIs) are used and the reason for any changes in reported Key performance indicators (KPIs) |
1.33945 |
50.90353 |
|
14 |
13 |
Integrated reporting is the gross margin of enterprises |
1.33945 |
49.88414 |
Source: Own Compilation
The responses have been arranged in ascending order of average rank. As depicted in Table 4, out of 14 questions in the questionnaire section D, the opinion in all 14 cases is not significantly different from the equally divided opinion of the neutral mean, which is (3). No one out of 14 questions is significantly different from the equally divided opinion of the neutral mean, which is (3). The coefficients of variance for all the average opinions fall in the range of 32.06% to 52.56%.
(i) Gender-wise opinion on the benefits of IR
Gender-wise opinions on the benefits of integrated reporting by respondents We used the Mann-Whitney test and found that they did not significantly differ on any question asked in the questionnaire. It was shown that there were no differences between male and female responses on the benefits of integrated reporting.
(ii) Age-wise opinion on the benefits of IR
Table 5 summarizes respondents' opinions on the benefits of integrated reporting based on their age. The Kruskal-Wallis test was used to determine the significance of the difference. Table 5 displays opinions based on age (less than 25 years, 25 to 40 years, and 40 years). Only five of the fourteen questions show a statistically significant difference. According to Table 5, the majority of respondents aged 25 to 40 strongly agreed with the benefits listed in the table, while respondents aged less than 25 only agreed, and respondents aged 40 to 60 strongly agreed, agreed, and were neutral. From the above table, we found that the coefficient of variance for less than 25-year-old respondents was 48.91 to 64.95, which shows that the variability of response is higher in this group in comparison to the remaining two groups of 25- to 40-year-old and 40- to 60-year-old respondents. The least variability in response was found in 40- to 60-year-old respondents.
Table 5: Age-wise opinion on the Benefits of IR
|
S.No. |
Q.No. |
Particular |
less than 25 |
25 to 40 |
40 to 60 |
P-value |
|||
|
Mean |
CV |
Mean |
CV |
Mean |
CV |
||||
|
1 |
6 |
Integrated reporting clearly explains the process for assessing materiality |
1.65 |
64.95 |
1.21 |
44.07 |
1.43 |
35.16 |
0.0009 |
|
2 |
7 |
Integrated reporting helps improve reliability and completeness |
1.67 |
52 |
1.23 |
47.96 |
1.16 |
39.52 |
0.0006 |
|
3 |
8 |
Integrated reporting establishes a sound internal control process |
1.52 |
48.91 |
1.19 |
40.68 |
1.36 |
40.68 |
0.0034 |
|
4 |
9 |
An integrated report explains the rationale behind the use of specific Key Performance Indicators (KPIs) and the basis for any modifications to the reported KPIs. |
1.64 |
66.64 |
1.29 |
44.17 |
1.23 |
40.86 |
0.0144 |
|
5 |
10 |
Integrated reporting discloses negative aspects of performance as well as positive aspects |
1.58 |
56.13 |
1.24 |
46.13 |
1.16 |
39.52 |
0.0084 |
Significant at .05 % level Source: Own Compilation
(iii) Qualification Wise Opinion on the Benefits of IR
Qualification-wise opinions of UG, PG, CA, CS, and others (PhD and M.Phil.) respondents about different aspects of stakeholder perceptions of the benefits of integrated reporting have been summarized in Table 6. For the significance difference, we used the Kruskal-Wallis test.
Table 6: Qualification-wise opinions on the benefits of IR
|
S.No. |
Q. |
Particular |
UG |
PG |
CA |
CS |
Other |
P-value |
|||||
|
Mean |
CV |
Mean |
CV |
Mean |
CV |
Mean |
CV |
Mean |
CV |
||||
|
1 |
3 |
Corporate reputation and stakeholder relationships are enhanced by integrated reporting. |
1.73 |
66.04 |
1.34 |
57.62 |
1.17 |
37.48 |
1.22 |
36.07 |
1.1 |
27.84 |
0.0045 |
|
2 |
6 |
Integrated reporting explains the procedure for determining materiality in detail. |
1.73 |
76.38 |
1.34 |
49.20 |
1.22 |
34.39 |
1.00 |
0.00 |
1.22 |
37.61 |
0.0163 |
|
3 |
7 |
Integrated reporting can help to improve reliability and completeness. |
1.89 |
52.46 |
1.33 |
48.07 |
1.22 |
48.99 |
1 |
0 |
1.13 |
41.8 |
0.0001 |
|
4 |
8 |
Integrating reporting creates effective internal control procedures |
1.57 |
48.67 |
1.26 |
40.83 |
1.31 |
45.47 |
1 |
0 |
1.18 |
42.99 |
0.0489 |
|
5 |
9 |
An integrated report explains the use of specific Key Performance Indicators (KPIs) and any changes in reported Key Performance Indicators (KPIs) |
1.78 |
73.52 |
1.27 |
40.86 |
1.4 |
46.69 |
1.11 |
30 |
1.27 |
48.23 |
0.0262 |
|
6 |
10 |
Integrated reporting highlights both the positive and negative aspects of performance. |
1.57 |
60.87 |
1.37 |
50.95 |
1.2 |
45.64 |
1 |
0 |
1.17 |
36.21 |
0.0311 |
|
7 |
11 |
An integrated report explains what management plans to do to address challenges. An integrated report explains what management will do to tackle challenges |
1.68 |
74.19 |
1.19 |
40.01 |
1.26 |
35.3 |
1.33 |
53.03 |
1.17 |
42.68 |
0.0184 |
Significant at .05 % level Source: Own Compilation
Table 6 showed the opinion of qualification wise (UG, PG, CA, CS, and others (P.hd. and M.phill)) out of 14 questions. In 50% of the seven questions, differences were found to be significant because their p-value was less than 0.05. The above table showed that in all the questions, CA, CS, and other (P.hd. and M.phill) mean ranks were nearly 1, which means in these three categories, most of the respondents strongly agree with the benefits of integrated reporting. In the remaining two categories, UG and PG, we found that their mean rank was nearly 2 and 1.5, which means UG respondents most agreed with the benefits of integrated reporting, and PG respondents strongly agreed.
(iv) Occupation-wise opinion on the Benefits of IR
Occupation-wise opinion Table 7 summarizes the responses of investors, academics, accountants, auditors, and students to various aspects of stakeholder perceptions of the benefits of integrated reporting. The Kruskal-Wallis test was used to determine the significant difference.
From Table 7, we found that means rank nearly 1 in investor, academician, accountant and auditor respondents. It means most respondents strongly agreed with the benefits of integrated reporting. However, we found that the coefficient of variance of academicians, accountants, and auditors was higher than that of investors. It shows that investor responses had the least variability compared to those of academicians, accountants, and auditors. The student’s response means rank is nearly two; it shows that most of the respondents agree with the benefits of integrated reporting.
Table 7: Occupation-wise Opinion on the Benefits of IR
|
S.No. |
Q.No. |
Particular |
Investor |
Academicians |
Accountants& Auditors |
Students |
P-value |
||||
|
Mean |
CV |
Mean |
CV |
Mean |
CV |
Mean |
CV |
||||
|
1 |
6 |
Integrated reporting explains the procedure for determining materiality in detail. |
1.12 |
33.75 |
1.34 |
42.38 |
1.19 |
33.50 |
1.67 |
66.76 |
0.0002 |
|
2 |
7 |
Integrated reporting helps improve reliability and completeness |
1.24 |
40.79 |
1.25 |
40.31 |
1.17 |
46.06 |
1.6 |
62.97 |
0.0091 |
|
3 |
9 |
An integrated report explains the use of specific Key Performance Indicators (KPIs) and any changes in reported KPIs |
1.17 |
39.58 |
1.34 |
40.25 |
1.33 |
45.64 |
1.57 |
68.78 |
0.0398 |
|
4 |
10 |
Integrated reporting discloses negative aspects of performance as well as positive aspects |
1.18 |
33.24 |
1.32 |
44.6 |
1.16 |
42.76 |
1.55 |
63.59 |
0.012 |
Significant at .05 % level Source: Own Compilation
Indian Stakeholders’ Perceptions on the Challenges of Integrated Reporting:
In this section, questions looking into how target groups perceive the challenges of integrated reporting in the corporate annual report are analyzed. According to (Berg & Jensen, 2012)17, the main obstacles to adoption and dissemination are the absence of a framework for integrated reports, a lack of guidelines and standards, and the absence of metrics for non-financial data.
(Obeng, Ahmed, &Kahan, 2021)18 said the relationship between IR practice and agency costs, according to nations with a stakeholder orientation, is more adverse than in nations with a shareholder perspective. The mean and coefficient of variation scores show that the respondents agreed with the questionnaire's challenges for integrated reporting. According to Table 8's findings, the majorities of respondents either agree or strongly agree that integrated reporting presents ongoing information challenges. The mean and coefficient of variance for each respondent's response to the various challenges of integrated reporting are displayed in the table.
Table 8: Opinions of Stakeholders on Challenges of Integrated Reporting
|
S.No. |
Q.No. |
Challenges of Integrated Reporting |
Mean |
CV |
|
1 |
1 |
High adoption and implementation costs for Integrated |
1.11 |
32.3 |
|
2 |
4 |
The high cost of hiring Integrated Reporting experts |
1.21 |
42.79 |
|
3 |
3 |
Lack of knowledge of Integrated Reporting |
1.22 |
45.7 |
|
4 |
5 |
Integrated reporting is not facilitated by organizational information systems. |
1.23 |
43.68 |
|
5 |
6 |
Management's negative attitudes toward Integrated Reporting |
1.24 |
42.31 |
|
6 |
2 |
Organizations lack easy access to information about integrated reporting |
1.3 |
41.03 |
Source: Own Compilation
The responses have been arranged in ascending order of average rank. Table 8 shows the six items in Section E of the questionnaire. Opinions in all 6 cases are not significantly different from the equally divided opinion of the neutral mean (3). The coefficients of variance for all the average opinions fall in the range of 32.3% to 45.7%. (Maniora, 2017)19 Companies did not benefit from economic and sustainability performance by switching from stand-alone non-financial reports to integrated reports.
From the above table, we found no difference in responses on various challenges of integrated reporting asked in the questionnaire. All the stakeholders who responded to various challenges strongly agreed that the cost of adopting and implementing integrated reporting was costly. In this regard, (Barth, Cahan, Chen, & Venter, 2017)20 said that capital cost was related to the firm’s information environment and did not affect the cost of capital in a sample of large firms. Based on the current reporting style in India, is it not suitable to provide information about integrated reporting in their annual reports? Organizational management does not know about integrated reporting. Stakeholders strongly agreed, based on the mean rank of responses, about the cost of hiring experts in integrated reporting. According to the stakeholders, the organization's information system did not support timely integrated reporting. Therefore, the adoption of integrated reporting depends on the perception of management.
(i) Gender Wise Opinion on Challenges of IR
To find out if there was a significant difference in the stakeholder's perception of the challenges of integrated reporting" between males and females, we used a Mann-Whitney U test on the responses on the challenges of integrated reporting. After using the Mann-Whitney U test, we found no significant difference between males and females in all six out of six questions. Because the p-value of any challenge is not less than.05, there is no significant difference in the perception of males and females towards the challenges of integrated reporting.
(ii) Age-Wise Opinion on Challenges of IR
We applied the Kruskal-Wallis test based on age to determine the significance difference.
Table No.9: Age-wise Opinion of Stakeholders on Challenges of Integrated Reporting
|
S. |
Q. |
Particular |
Less than 25 |
25 to 40 |
40 to 60 |
P-value |
|||
|
Mean |
CV |
Mean |
CV |
Mean |
CV |
||||
|
1 |
2 |
Organizations lack easy access to information about integrated reporting |
1.50 |
44.19 |
1.27 |
40.46 |
1.20 |
33.90 |
0.0482 |
|
2 |
4 |
The high cost of hiring Integrated Reporting experts |
1.41 |
46.52 |
1.18 |
42.77 |
1.1 |
27.73 |
0.0330 |
Source: Own Compilation
Table 9 shows that out of six questions, a significant difference is found in only two. Table 9 shows that the majority of respondents aged 25 to 40 strongly agreed on the above-mentioned benefits in a table based on mean rank; the majority of stakeholders aged less than 25 agreed, and the majority of stakeholders aged 40 to 60 strongly agreed. From the above table, we found that the coefficient of variance for less than 25-year-old respondents was 44.19 and 46.52. It shows that response variability is higher in this group than in the remaining two groups of 25- to 40-year-old and 40- to 60-year-old stakeholders. The least variability in response was found in 40- to 60-year-old stakeholders. The P-value of questions no. 2 and 4 of the challenges was less than.05, which means there is a significant difference between the age groups shown in Table 9.
(iii) Qualification Wise Opinion on challenges of IR
After using the Kruskal-Wallis test, we found no significant difference between qualification groups (UG, PG, CA, CS, and Other) in all six out of six questions. Because the p-value of any challenge is not less than.05, there is no significant difference in the perception of qualification groups towards the challenges of integrated reporting.
(iv) Occupation-wise Opinion on challenges of IR
Occupation-wise opinions of Investors, Academicians, accountants, auditors, and students' responses about different aspects of stakeholder perceptions on the challenges of integrated reporting have been summarized in Table 10. According to (Reimsbach, Hahn, &Gurturk, 2018)21 assurance of sustainability information positively affected professional investor evaluation of a firm's sustainability performance, resulting in a higher weighting of this information and higher investment-related judgment.
Table 10: Occupation-wise opinion of stakeholders on challenges of Integrated Reporting
|
S.No |
Q.No |
Particular |
Investor |
Academicians |
Accountant & Auditor |
Student |
P-value |
||||
|
Mean |
CV |
Mean |
CV |
Mean |
CV |
Mean |
CV |
||||
|
1 |
4 |
The high cost of hiring Integrated Reporting experts |
1.15 |
39.58 |
1.29 |
46.95 |
1.07 |
24.25 |
1.32 |
49.49 |
0.0433 |
Source: Own Compilation Significant level at 5%
We found a significant difference in only one out of six challenges after applying the Kruskal-Wallis test to the responses of the occupation group. Table 10 depicts the response challenge with significant differences.
Conclusion:
According to the survey results, the majority of respondents were academicians, while a minority were students.
Integrated reporting is a corporate reporting approach that seeks to provide a comprehensive and holistic view of a company's performance, strategy, and value creation. It aims to integrate financial and non-financial data to provide a more accurate and meaningful representation of the overall value of the organization. Organizations are encouraged to disclose a broader range of information through integrated reporting, including environmental, social, and governance (ESG) factors. Management, investors, and other stakeholders can make better decisions with integrated reporting. Integrated reporting prioritizes long-term value creation over short-term financial results. Integrated reporting gives organizations a platform to effectively communicate with stakeholders. The majority of respondents aged 25 to 40 strongly agreed on the aforementioned benefits, according to mean rank. The majority of investors, academics, accountants, and auditors who responded scored almost one, indicating that they strongly agree with the advantages of integrated reporting. However, we discovered that academics, accountants, and auditors had higher coefficients of variance than investors, indicating that investor responses were the least variable when compared to those of academics, accountants, and auditors. The student's mean response score is almost 2. It demonstrates that the majority of respondents concur that integrated reporting has advantages.
Organizations must collect and integrate a wider range of data for integrated reporting, including both financial and non-financial data. This can be difficult because businesses may need to spend money on systems and procedures to gather, examine, and report on this data can be difficult and time-consuming to create integrated reports and an integrated reporting framework. A change in organizational culture and mindset is frequently required for integrated reporting. Integrated reporting frequently necessitates a shift in organizational culture and mindset. Because integrated reporting is a newer approach, some investors and stakeholders may be unfamiliar with its principles and benefits. The majority of respondents aged 25 to 40, according to our findings, strongly agree on the aforementioned challenges. Despite the aforementioned challenges, integrated reporting provides numerous benefits that can assist organizations in driving long-term value creation, strengthening stakeholder relationships, and adapting to changing transparency and accountability expectations. As the practice continues to evolve and gain momentum, efforts to overcome these challenges are underway, including the development of standardized frameworks and guidelines for integrated reporting.
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