Integrated Reporting: Benefits, and Challenges - A Literature review

Background: Integrated Reporting (IR) is a novel reporting framework that merges financial and non-financial information into a unified, concise report, aiming to enhance organizational transparency, stakeholder engagement, and value creation over time. Objective: This study aims to provide a comprehensive review of the benefits and challenges associated with IR, focusing on its effects on cost of capital, information asymmetry, financial performance, value relevance of accounting information, and the complexities surrounding its adoption, preparation, and assurance. Methods: A systematic literature review was conducted on 45 peer-reviewed articles published between 2014 and 2024. Data were sourced from prominent academic platforms such as ResearchGate, Emerald, Elsevier, Wiley Online Library, and MDPI. The selected studies were categorized thematically based on predetermined IR dimensions, and inclusion/exclusion criteria were applied to ensure relevance and quality. Results: The review indicates that IR can significantly reduce the cost of capital and enhance financial performance, particularly in environments with high information asymmetry and strong investor protection. However, the influence of IR on information asymmetry and the value relevance of accounting information remains context-dependent, with mixed evidence across different regulatory and cultural settings. The adoption, preparation, and assurance of IR face significant global challenges, including organizational inertia, technological limitations, and lack of standardized assurance criteria. Conclusion: IR presents considerable promise in improving corporate reporting quality and stakeholder communication. Nevertheless, its effectiveness is influenced by regional, sectoral, and organizational factors. Addressing these challenges requires context-specific strategies, development of new assurance standards, and greater integration of IR practices into existing business processes.