Environmental, Social and Governance Disclosure, Integrated Reporting, and the Accuracy of Analyst Forecasts

By Cristiana Bernardi, A. Stark. 2016

405 citations recorded by the source corpus.

The International Integrated Reporting Council advocates that integrated reporting (IR) should become the worldwide norm for corporate reporting aimed at serving the needs of investors. Nonetheless, only in South Africa has IR been mandated. We study the impact of the reporting regime change in South Africa on analyst forecast accuracy over the period 2008 to 2012, as a way of evaluating users’ perceptions of the usefulness of IR. We theorise that any effects of IR will be greater the greater is the level of disclosures of environmental, social and governance performance. We find results consistent with those who support IR and our theory that the level of environmental, social and governance disclosures is a mediating variable in determining the effectiveness of IR. The results are driven by the levels of environmental disclosure and, to a lesser extent, governance disclosure. Our results provide some support for those who advocate the virtues of integrated reporting.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/2842b4b7bb7cb7998febfd4f98319ad7cdb578b1

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Citations in the corpus

The expansion of non-financial reporting: an exploratory study (2018, positive): “Zhou et al. (2017) provide evidence that analyst forecast error reduces as a company’s level of alignment with the integrated reporting framework increases, and Bernardi and Stark (2018) also show that analyst forecast accuracy increases with the volume of integrated reporting.”
Integrated reporting of environmental, social, and governance and financial data: Does the market value integrated reports? (2020, background): “…we know, Mervelskemper and Streit's (2017) Only a few papers take this market-based point of view (Baboukardos & Rimmel, 2016; Barth et al., 2017; Bernardi & Stark, 2018; Lee & Yeo, 2016; Maniora, 2017; Mervelskemper & Streit, 2017; Zhou et al., 2017); other papers examine the IIRC's pioneer…”
Integrated reporting: The current state of empirical research, limitations and future research implications (2016, result): “This analysis provides crucial added value compared to the previous literature reviews and meta-analyses focused on CSR and CSR reporting (Berthelot et al. 2003; Fifka 2013; Gray et al. 1995; Huang and Watson 2015; Lee and Hutchison 2005; Malik 2015; Mathews 1997; Roberts 1992; Simnett 2014).”
Does Corporate Governance Affect the Quality of Integrated Reporting? (2020, background): “Instead, it captures the interconnections between the financial and non-financial drivers of the performance of a firm [75], based on a broad notion of integration [3].”
Informational Content and Assurance of Textual Disclosures: Evidence on Integrated Reporting (2019, neutral): “The focus on the scope of information is in line with the IIRC Framework (Bernardi & Stark, 2018; IIRC, 2013; Melloni et al., 2017).”
Impact of disclosure and assurance quality of corporate sustainability reports on access to finance (2019, background): “Likewise, from the accounting perspective, Dhaliwal et al. (2012) and Bernardi and Stark (2018) note better analysts' forecast accuracy in the presence of CSR information.”
The effect of carbon dissemination on cost of equity (2019, background): “Weighting each data point in terms of its importancemakes the disclosure score reflect both the quality and quantity of disclosure (Bernardi & Stark, 2018; Qiu, Shaukat, & Tharyan, 2016).”