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Towards the Voluntary Adoption of Integrated Reporting: Drivers, Barriers, and Practices

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  • Cecília Carmo

    (Research Unit on Governance, Competitiveness and Public Policies (GOVCOPP), Higher Institute of Accounting and Administration (ISCA-UA), University of Aveiro, 3810-193 Aveiro, Portugal)

  • Inês Correia

    (Higher Institute of Accounting and Administration (ISCA-UA), University of Aveiro, 3810-193 Aveiro, Portugal)

  • Joaquim Leite

    (Department of Business and Social Sciences, School of Technology and Management, Instituto Politécnico de Bragança (IPB), 5300-252 Bragança, Portugal)

  • Amélia Carvalho

    (CIICESI, ESTG, Polytechnic of Porto, 4200-465 Porto, Portugal)

Abstract

Integrated reporting is essentially a voluntary practice worldwide. For this reason, although it is growing, its diffusion is slow. Based on the Portuguese context, where a reduced number of listed companies publish integrated reports, this study aims to explore the drivers and barriers for the voluntary adoption of integrated reporting and the reporting practices up to the production of an integrated report. To this end, an analytical framework based on the Diffusion of Innovation Theory was developed and applied to data collected from a survey and corporate reports from both “adopters” and “non-adopters”. The evidence collected suggests that the adoption of integrated reporting may be driven by the perception of a relative advantage over traditional reporting in terms of providing more relevant information to capital providers, particularly banks. The publication of an integrated report appears to be the result of a process of incremental improvements in the practice of disclosure and assurance of non-financial information, so that the previous experience with sustainability reporting is also an important driver for voluntary integrated reporting. Finally, companies may be differently prepared for transition to integrated reporting and, therefore, have different perceptions of its cost and complexity, which may act as a barrier.

Suggested Citation

  • Cecília Carmo & Inês Correia & Joaquim Leite & Amélia Carvalho, 2023. "Towards the Voluntary Adoption of Integrated Reporting: Drivers, Barriers, and Practices," Administrative Sciences, MDPI, vol. 13(6), pages 1-20, June.
    • Handle: RePEc:gam:jadmsc:v:13:y:2023:i:6:p:148-:d:1163823
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    References listed on IDEAS

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    1. Chijioke Nwachukwu, 2021. "Systematic review of integrated reporting: recent trend and future research agenda," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 20(3/4), pages 580-598, June.
    2. Diamond, Douglas W & Verrecchia, Robert E, 1991. "Disclosure, Liquidity, and the Cost of Capital," Journal of Finance, American Finance Association, vol. 46(4), pages 1325-1359, September.
    3. Linda Kannenberg & Philipp Schreck, 2019. "Integrated reporting: boon or bane? A review of empirical research on its determinants and implications," Journal of Business Economics, Springer, vol. 89(5), pages 515-567, July.
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