Corporate reporting behavior: Factors influencing the adoption of integrated reporting in India


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Corporations have a responsibility to provide a fair view of their financial state to their stakeholders. To facilitate the reporting process, the IFRS recommends the integrated reporting framework, which firms may may adopt voluntarily. This study examines the motivations of management in voluntarily disclosing capitals-related information in annual reports of companies listed on the Nifty Metal Index and their willingness to adopt the IR framework. It also empirically investigates how a company’s long-term and short-term goals impact integrated reporting adoption. The Integrated Reporting Capitals Index (IRCIN) was constructed to study the reporting behavior of companies within the specified framework. The reporting patterns within the metal industry are analyzed by employing the fixed effects model. Results highlight the interconnectedness of financial and non-financial capital dimensions in corporate reporting practices, albeit with a strong emphasis on financial capital. The average word count describing the financial capital was high, while the intellectual capital was the lowest. Strategic management evaluated via cash flow from investing activities proved statistically significant at the 5% level. Similarly, short-term goals indicated by profit after tax were found to play a crucial role in encouraging corporations within the Nifty Metal Index to adopt the integrated reporting framework. Conversely, book value per share exhibited a negative coefficient, indicating a historical disconnect with the reporting entities. These insights suggest that the adoption of the integrated reporting framework by management is driven by strategic goals, short-term objectives, and overall company performance.

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    • Table 1. Combined average word count of capitals 2020–2023
    • Table 2. Descriptive statistics
    • Table 3. Correlation of six capitals and IRCIN
    • Table 4. Correlation of dependent and independent variables
    • Table 5. Fixed effects model
    • Conceptualization
      K. P. Venugopala Rao
    • Methodology
      K. P. Venugopala Rao
    • Resources
      K. P. Venugopala Rao
    • Supervision
      K. P. Venugopala Rao
    • Validation
      K. P. Venugopala Rao
    • Visualization
      K. P. Venugopala Rao
    • Writing – original draft
      K. P. Venugopala Rao
    • Writing – review & editing
      K. P. Venugopala Rao, Farha Ibrahim
    • Formal Analysis
      Farha Ibrahim
    • Investigation
      Farha Ibrahim
    • Software
      Farha Ibrahim