Integrated reporting practice in a developing country—Ghana: legitimacy or stakeholder oriented?

Abstract

The study examined the integrated reporting (IR) practices of listed firms in Ghana. Thirty-three (33) firms listed on the Ghana Stock Exchange from 2005 to 2018 were used for the study. A content analysis method was used to examine 412 annual reports of the firms. The level and trend of the IR practices of the firms were analysed according to a 5-point rating scale (average/mean). Wilcoxon’s signed-rank test was also used to examine whether there was any significant difference in the level of IR across the years. The evidence showed that the firms made increased positive environmental and social disclosures, as opposed to providing balanced disclosures, suggesting that the firms used IR to manage their respective images. The firms tried to achieve their strategic objectives by reporting information that projected them favourably. Based on the evidence, the study concludes that the IR practices of the firms were strategies to improve their respective public images and to obtain public acceptance. The theoretical conclusion is that the IR practices of firms in Ghana are both legitimacy and stakeholder-oriented. This study provides a significant implication for the government, accounting professional bodies, the Ghana Stock Exchange and firms’ management of the need to provide a framework for the adoption and practice of integrated reporting in Ghana. These results contribute to the literature by providing evidence to show which aspects of IR received more attention and the theories that drive such practices.