IDEAS home Printed from https://ideas.repec.org/a/taf/euract/v29y2020i1p55-83.html
   My bibliography  Save this article

Informational Content and Assurance of Textual Disclosures: Evidence on Integrated Reporting

Author

Listed:
  • Ariela Caglio
  • Gaia Melloni
  • Paolo Perego

Abstract

This paper examines the economic benefits associated with textual attributes and the external assurance of integrated reporting (IR), an innovative form of corporate disclosure that connects financial and environmental, social and governance (ESG) information in a single report. We investigate the setting of South Africa, where IR has been mandatory since 2010 for listed companies. We find that IR readability is associated with a higher market valuation, conciseness with higher stock liquidity and tone bias with less dispersed analysts’ estimates. Results suggest that market participants appreciate IRs that are readable, short and focused, as well as hint at tone management strategies targeting analysts. We also show that assurance on IR moderates the negative effects of poor textual attributes: if firms publish IRs that are difficult to read but assure them, this compensates for the negative influence of reading difficulty on a market value; if long IRs are assured, this dampens the negative effect of verbosity on liquidity; if firms assure IRs, analysts’ forecast dispersion is lower, therefore suggesting that assurance acts as a credibility-enhancing mechanism for external users. Finally, we show that textual attributes and assurance matter for broader audiences interested in the ESG dimensions of a firm’s performance.

Suggested Citation

  • Ariela Caglio & Gaia Melloni & Paolo Perego, 2020. "Informational Content and Assurance of Textual Disclosures: Evidence on Integrated Reporting," European Accounting Review, Taylor & Francis Journals, vol. 29(1), pages 55-83, January.
  • Handle: RePEc:taf:euract:v:29:y:2020:i:1:p:55-83
    DOI: 10.1080/09638180.2019.1677486
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/09638180.2019.1677486
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/09638180.2019.1677486?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:euract:v:29:y:2020:i:1:p:55-83. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/REAR20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.