| Abstract [eng] |
Topic relevance. To be able to determine underlying value and hidden potential of an investment, investors analyze not only usual financial data but also company’s impact for community, environment, and governance. One of the most promising tools for such analysis is considered integrated reporting. According to report issued by IIRC (2018) it was revealed that 95% of respondents of conducted research indicated IR as ‘essential’ or ‘very useful’ indicating prosperity of the practice. Since there is no unanimous rules and jurisdictions for integrated reporting, not to mention there is no audits of such reports, there is a need to identify if changes in the content of integrated reporting are happening and if the quality of reports is better so that it could be used when making investing decisions. While IR framework provides guidelines for disclosure of main content elements of the integrated report, there are a lot of freedom left for preparators to decide if information is material to be disclosed in the report. Therefore, investors, yet they value such information provided, cannot compare different business units to be able to make reasonable investing decisions. Research problem – Various governmental organizations (EU, ISAB, IFA) and financial institutions (LSE) provide guidelines for IR, but there are still no unanimous rules and agreed formal presentation. To be able to connect large scope of information the potential companies provide, investors must convert it to reasonable and well-grounded value which is currently very challenging. Therefore, there is a need to identify if changes in the content of IR are happening and if the quality of reports is better so that it could help when making investing decisions. As a result, research problem is formed: how content of integrated reporting is changing to provide more relevant information to investors? Research object – The change of integrated reporting content Aim of the research – to analyze the changes in integrated reporting content and provide insights for possible development. Objectives of investigation: 1. To perform analysis of integrated reporting theoretical principles and existing problems; 2. To identify requirements for content of integrated reporting and content change determinants; 3. To compose research methodology to identify how information provided in integrated reports changes during selected period; 4. To perform empirical research on the content of integrated reports of European companies and provide recommendations and conclusions. Methods of investigation: analysis and review of scientific and specialized literature, content analysis, disclosure checklist, statistical analysis, graphical analysis. Sample of research: Total of 65 integrated reports and 27 financial statements published in 2015-2018 by 19 different companies from EURO STOXX 50 index were included in the sample. Results of investigation: Performed empirical research was divided into three sections: content analysis of IR by industry; comparison of content elements of IR included in IR database and IR presented voluntarily and comparison of content elements of FS and IR. It was concluded that companies from 2015 to 2018 improved disclosures of business model, risk and opportunities, strategy and resource allocation and performance content elements. Companies from different industries received higher scores for different content elements indicating that different information is considered material. Companies improved significantly disclosures of content elements in 2017 but scores decreased in 2018. Companies included in IR database received higher scores for disclosures of governance, business model, risk and opportunities, performance and basis of presentation. Companies not included in IR database received higher scores for disclosures of organizational overview and external environment, strategy and resource allocation and future outlook. FS received higher scores for risk and opportunities and basis of presentation content elements compared to IR. FS do not have any information disclosed in connection to strategy and resource allocation content elements. |
