Relevance of financial reporting systems: Single-bottom line or triple-bottom line

Abstract

Traditional financial reporting systems have geared towards the single-bottom line reporting in the form of profitability. However, there are arguments that corporate reporting systems should not just dwell on a single-bottom line but should be reported upon on three elements comprising economic/financial, social and environmental elements that constitute the triple-bottom line. This study aimed at empirically researching on what current practices corporate business executives and financial managers deploy in their corporate financial reporting systems. The focus of the study was on the assessment of the relevance of either the single-bottom line or triple-bottom line reporting systems within an African framework. Data was collected using the structured questionnaire that was administered across different countries from Southern Africa. The study results reveal that a sustainability (triple-bottom line) reporting system has been embraced by many organisations in Africa. The study findings suggest that there is a need to review and redesign accounting and financial principles and policies so that they are aligned with the emerging triple-bottom line reporting system requirements. The study findings will be of much relevance to academics, researchers and industry practitioners. Key words: Africa, financial reporting, Malawi, profitability, stakeholders, sustainability, triple-bottom line.