Abstract
Integrated reporting is a key instrument used to inform stakeholders about the sustainability issues of a company. Only an assured report can effectively instill confidence in its users regarding the sustainability of the company. Based on the International Integrated Reporting Framework issued by the International Integrated Reporting Council (IIRC), the authors solicited perceptions from auditors and audit report users about several aspects of integrated reporting assurance. An analysis of the responses suggests that integrated reporting assurance is important, but there are many challenges (both methodological and related to the characteristics of non-financial information) for auditors to overcome. Reporting companies and auditors must work to overcome these problems. The former ones must improve the quality of non-financial information and the later must adapt their audit procedures. This paper provides valuable insights into preferences regarding the form and content of the audit report on integrated reporting. This study is useful to regulators of audit activity, auditors’ corporations, the IIRC, and other international associations, academics, and audit report users, and contributes to the current integrated reporting literature by examining the perceptions of auditors and users regarding the assurance of integrated reporting. Integrated reporting assurance is still an under-explored field of research.
Highlights
After the financial crisis of 2008/2009, two tendencies emerged in corporate information—critics of the older reporting systems, and a growing interest in non-financial information [1,2,3,4]
Based on the International Integrated Reporting Framework issued by the International Integrated Reporting Council (IIRC), the authors solicited perceptions from auditors and audit report users about several aspects of integrated reporting assurance
An analysis of the responses suggests that integrated reporting assurance is important, but there are many challenges for auditors to overcome
Summary
After the financial crisis of 2008/2009, two tendencies emerged in corporate information—critics of the older reporting systems, and a growing interest in non-financial information [1,2,3,4]. Preparing CSR reports or sustainability reports as separate non-financial reports creates information dissemination, “more pages unread”, and confusion for stakeholders [9] To minimize these problems and to increase stakeholders’ trust, the IIRC launched a principlebased framework for integrated reporting [10]. The most important content elements to assure are “financial performance”, “basis of preparation and presentation” and “governance” They believed that two separated audit reports should be issued by auditors—one for annual accounts and another for the remaining information contained in the integrated reporting. It provides evidence about actual perceptions of auditors and audit report users regarding the importance of assuring integrated reporting It describes the needs of both groups regarding the form and content of the audit report on integrated reporting. We conclude with a summary of our findings, the study’s limitations, and suggestions for future research
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