Abstract
This article gives an explanation of the major objectives and crucial benefits of integrated reporting (IR). In addition, it describes the Guiding Principle “Stakeholder Relationships” and Content Element “Risks and Opportunities” of The International <IR> Framework, which is followed by the demonstration on how each of them supports the attainment of those benefits. Finally, this article critically chooses the 2016 annual report of Hyundai Motor Company as an example, evaluates the quality of report and examines its IR practice by assessing whether this company applies the selected Guiding Principle and Content Element effectively to help achieve major benefits of IR. The research method comprises the establishment of evaluation criteria and content analysis of annual reports.
Highlights
Company annual report serves as a primary source for stakeholders to reach relevant information
The research methods comprise the establishment of evaluation criteria and content analysis of annual reports. 3.1 The Establishment of Evaluation Criteria In 2013, The International Framework was published by the International Integrated Reporting Council (IIRC), it includes seven Guiding Principles and nine Content Elements that guide the content of IR
In terms of “Risks and Opportunities”, Hyundai demonstrates how external risks are handled by strategic plans, it ignores internal risks and opportunities stemming from business activities
Summary
Company annual report serves as a primary source for stakeholders to reach relevant information. Giving priority to compliance instead of merits for stakeholders has sparked controversy over the quality of annual reports. The demand for more comprehensive information disclosures has become a contributing factor to the evolution of Integrated Reporting (IR). Incorporating non-financial aspects and financial aspects, IR makes up for the shortcomings of financial reporting (Dumay et al, 2016). Despite the increasingly popular practice in IR adoption, the degree to which IR is used and the quality of reports vary from company to company. The International Framework is not effectively implemented when IR is used (de Villiers, Rinaldi, & Unerman, 2014). Effective application of the framework and report quality determines the usefulness of IR to a company’s stakeholders (Pistoni, Songini, & Bavagnoli, 2018). This article primarily gives an explanation of IR’s www.scholink.org/ojs/index.php/jepf
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