The Level of Integrated Reporting Alignment with the IIRC Framework: Evidence from South Africa

Abstract

In recent years, corporate disclosure policies have undergone important changes due mainly to greater requests from stakeholders and the presence of limited resources. Companies are forced to rethink their disclosure strategies and the way they communicate to the outside, in order to increase transparency and meet the needs of their stakeholders. In this context, Integrated Reporting (IR), developed by the International Integrated Reporting Council (IIRC), represents a new way to provide, in a single document, interconnected information on strategies, risks, performance, governance and future prospects. In the development process of this reporting tool, South Africa played an important role. Therefore, this study aims to analyse the level of alignment of integrated reports with the IIRC framework in the South African contest. The results show first of all that South African companies provide integrated reports with high levels of alignment with the IIRC framework. Secondly, the analysis of the determinants shows how firm size, firm profitability and financial leverage positively affect the level of compliance of the integrated reports with the IIRC requirements.