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Value Added as part of Sustainability Reporting: Reporting on Distributional Fairness or Obfuscation?

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  • Axel Haller

    (University of Regensburg)

  • Chris J. van Staden

    (AUT University)

  • Cristina Landis

    (University of Regensburg)

Abstract

Distributional fairness of corporate distributions is an important social issue linked to accounting for equality. Value added and the information contained in the value added statement can conceptually be regarded as a reflection of how the company is managed for all stakeholders. We investigate value added information published in sustainability reports to determine if the information provided is useful for assessing distributional fairness between stakeholders. We find that the value added information disclosed lack conciseness, comparability and understandability. The divergence is considerable and the explanations of the disclosed information so limited that the usefulness of the value added disclosures must be questioned. Our results suggest several obfuscating techniques in the disclosure of value added information, including disclosing information that is conceptually compromised, resulting in comparability issues and disclosing information that can’t be verified by reconciling back to the financial statements. Our findings have clear ethical and moral implications as they stress the societal issue of distributional fairness. It seems that companies are either reluctant to provide value added information that is useful, or deliberately use value added disclosures to obfuscate. Information reflecting distributional fairness is therefore compromised.

Suggested Citation

  • Axel Haller & Chris J. van Staden & Cristina Landis, 2018. "Value Added as part of Sustainability Reporting: Reporting on Distributional Fairness or Obfuscation?," Journal of Business Ethics, Springer, vol. 152(3), pages 763-781, October.
    • Handle: RePEc:kap:jbuset:v:152:y:2018:i:3:d:10.1007_s10551-016-3338-9
    DOI: 10.1007/s10551-016-3338-9
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