Integrated reporting assurance practices—a study of South African firms

Abstract

The growth in integrated reporting during the last decade has not been accompanied by an increase in public confidence due to its voluntary nature and a lack of consistency and completeness in the reporting of non-financial information. Despite assurance being a means of adding credibility to such reports, the adoption and quality of assurance practices vary significantly. The purpose of this paper is to report on prevailing integrated reporting assurance practices, specifically the assurance providers, the standards used for assuring integrated reports and the related assurance levels. Due to the scant academic research dealing with the assurance on integrated reports, a qualitative explorative research approach, using content analysis and case studies, was used to examine the prevailing integrated reporting assurance practices. Although integrated reporting and its assurance are widely advocated in the literature, only a limited number of companies obtained assurance on their integrated reports. This study combines a relatively unexplored research field with an established theory, complementing the mainly quantitative research on assurance of integrated reports. It is one of a few studies to provide primary evidence of prevailing integrated reporting assurance practices, using legitimacy as the underlying theory. The study provides information to stakeholders, shareholders and investors on how assurance is used by companies as a strategy to maintain legitimacy. This study also provides insights of preparers and assurance providers on the necessity of developing a new standard as well as who should be responsible to provide assurance on an integrated report. These insights may inform standard setters and regulators currently engaged on projects to develop guidance for the assurance of an integrated report. Regulating assurance on integrated reports could be valuable, but regulators should be careful not to stifle the innovation in this evolving field. The accounting profession is encouraged to consider more flexible, innovative methods in assuring integrated reports.