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Article
Publication date: 2 June 2021

Ewelina Zarzycka and Joanna Krasodomska

The paper aims to examine if corporate characteristics, general contextual factors and the internal context differentiate the quality and quantity of the disclosed…

Abstract

Purpose

The paper aims to examine if corporate characteristics, general contextual factors and the internal context differentiate the quality and quantity of the disclosed non-financial Key Performance Indicators (KPIs).

Design/methodology/approach

The study is based on content analysis of the disclosures provided by large public interest entities operating in Poland after the introduction of the Directive 2014/95/EU. The quality of the KPIs disclosures is measured with the disclosure index. Regression analysis and selected statistical tests are used to examine the influence of the selected factors on the differences in the index value and corporate disclosure choices as regards the KPIs.

Findings

The study findings indicate that the sample companies provide a variety of non-financial KPIs in a manner that makes their effective comparison difficult. The research confirms that mainly industry, ecologists and the reporting standard determine the significant differences in the quality of the KPIs disclosures and the quantity of presented KPIs.

Research limitations/implications

The paper adds to the understanding of the differences in the quality of KPIs presentation and the choice of disclosed KPIs.

Practical implications

The paper includes suggestions on how to change corporate practice with regard to the non-financial KPIs disclosures.

Originality/value

We shed additional light on the importance of internal contextual factors such as the reporting standard and the reporters' experience in providing non-financial KPIs disclosures.

Details

Journal of Applied Accounting Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0967-5426

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Article
Publication date: 10 February 2020

Joanna Krasodomska, Jan Michalak and Katarzyna Świetla

This paper aims to explore accountants’ views on mandatory corporate social responsibility (CSR) reporting. It focuses on three main factors underpinning their…

Abstract

Purpose

This paper aims to explore accountants’ views on mandatory corporate social responsibility (CSR) reporting. It focuses on three main factors underpinning their understanding and attitude towards non-financial disclosures: general understanding of the concept, gender and work experience.

Design/methodology/approach

The study uses social identity theory as the theoretical framework. The findings are based on a survey conducted among 73 accountants in 2018. The questionnaire consisted of 86 questions divided into 9 main areas. The Mann–Whitney U test was used to determine if there are any significant differences between the accountants’ attitudes towards non-financial disclosures.

Findings

Study results suggest that the general knowledge of CSR reporting among accounting specialists is insufficient. The attitude towards mandatory CSR disclosures significantly differs between accountants who participated in training related to non-financial reporting and those who did not. Contrary to expectations, there were no significant differences in responses either between female and male accountants or between accountants at the beginning of their career path (with experience shorter than five years) and the more experienced ones. The paper contributes to social theory studies as it refers to the problem of the influence of professional associations, governments and big accounting firms on the transformation of accountants’ social identity. It also discusses the relations between the characteristics influencing personal identity and social identity of accountants in shaping their attitude towards mandatory non-financial disclosures.

Practical implications

The findings could be of interest to the higher education and professional certification institutions which should consider bringing accounting curricula more closely to the realities of the current business environment.

Originality/value

The study contributes to the body of literature mainly because it investigates a diversified sample of accountants in a relatively unexplored institutional setting. It may also serve as a starting point for research that more broadly explores accountants’ engagement in non-financial disclosures on CSR.

Details

Meditari Accountancy Research, vol. 28 no. 5
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 1 September 2006

Per Flöstrand and Niklas Ström

Research has called for increased relevance of business reporting. A step towards that goal is an increased disclosure of non‐financial information. At the present time…

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4804

Abstract

Purpose

Research has called for increased relevance of business reporting. A step towards that goal is an increased disclosure of non‐financial information. At the present time, non‐financial information is mostly provided on a voluntary basis.

Design/methodology/approach

Valuation relevance of non‐financial information is studied by examining the information content of 200 analyst reports written on a respective number of firms listed in the S&P 500 index, while simultaneously performing a disclosure study of non‐financial information by the same 200 firms in their annual reports.

Findings

We found the valuation relevance of non‐financial information to be related to the size of the target firm. Further, analysts’ use of non‐financial information is related to the level of non‐financial information in the 10‐k report of the target firm. Finally, analysts tend to rely more heavily on forward‐looking non‐financial information than on historical non‐financial information.

Practical implications

The findings in this paper have implications for policy makers, preparers of business reporting, and others having to make judgments on information usefulness.

Originality/value

This study looks at the valuation relevance of non‐financial information, as opposed to earlier studies that have judged the usefulness of non‐financial information by measuring its value relevance. Information is regarded to have valuation relevance if it is used by analysts in the valuation process. Hence, valuation relevance offers an alternative way of measuring information usefulness.

Details

Management Research News, vol. 29 no. 9
Type: Research Article
ISSN: 0140-9174

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Article
Publication date: 7 August 2019

Javier Andrades Peña and Manuel Larrán Jorge

This paper aims to examine the extent of mandatory non-financial information disclosed by Spanish state-owned enterprises (SOEs) and barriers to and/or drivers of such disclosures.

Abstract

Purpose

This paper aims to examine the extent of mandatory non-financial information disclosed by Spanish state-owned enterprises (SOEs) and barriers to and/or drivers of such disclosures.

Design/methodology/approach

To accomplish this task, three data sources were used. To study the extent of non-financial information disclosed and the influence exerted by some variables of such disclosures, the authors performed a content analysis of website disclosures of all Spanish SOEs identified by the General Intervention Board of the State Administration. Likewise, reports published by such companies on their web pages were also examined. To investigate the barriers to the disclosure of non-financial information by Spanish SOEs, the data were collected through interviews with key personnel.

Findings

Results showed that the disclosure of mandatory non-financial information by Spanish SOEs is lagging behind when compared to private companies. The key personnel revealed different reasons for the low level of disclosures such as the lack of an accountability awareness in Spain. The institutional size was the variable that most significantly affects the disclosure of mandatory non-financial information by Spanish SOEs.

Originality/value

The main contribution of this research was to examine the influence of some variables on the amount of mandatory non-financial information disclosed by Spanish SOEs. Previous studies have been focused on exploring the level of non-financial information disclosed voluntarily by these companies.

Details

Meditari Accountancy Research, vol. 27 no. 4
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 19 April 2011

Susanne Arvidsson

The purpose of this paper is to analyse the management teams' views regarding different aspects related to the disclosure of non‐financial information in the annual…

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9350

Abstract

Purpose

The purpose of this paper is to analyse the management teams' views regarding different aspects related to the disclosure of non‐financial information in the annual report. The focus is on the following aspects: incentive, quantity, focus, use of non‐financial key performance indicators (KPIs) and trends.

Design/methodology/approach

The data are based on a comprehensive questionnaire survey addressed to investor‐relation managers (IRMs) at the largest companies listed on the Stockholm Stock Exchange.

Findings

The study confirms an increasing focus of non‐financial information related to intangible assets in corporate disclosure. This increase appears to be both regulatory and demand driven. Encouraging indeed is that management teams seem to have acknowledged the importance not only to describe the less tangible values per se, but also to explain the roles they play in the value‐creation process and in corporate strategy. Furthermore, the study reveals a trend shift from research and development (R&D) and relational information towards corporate social responsibility (CSR) and employee‐related information, an increasing number of non‐financial KPIs and a positive attitude to mandatory requirements. Overall, the findings indicate that voluntary disclosure compensates for the deficiencies of financial statements to properly disclose intangible assets. This may lessen the risk of the argued impairment of the efficient allocation of resources on the stock market.

Practical implications

The findings reveal that quite a few challenges lie ahead in shaping efficient corporate disclosures where also intangible assets are in focus. The most critically relate to dealing with the concerns of reliability and comparability associated with disclosures of intangible assets and their related non‐financial KPIs. This needs to be taken on promptly by management teams, policy makers and financial market regulators if the corporate‐disclosure process shall function efficiently and facilitate decreased information asymmetry and uphold an efficient allocation of resources on the stock market.

Originality/value

Herein not only one aspect related to disclosure of non‐financial information is being analysed, but also several and from a management‐team perspective, which is a perspective often neglected for the sophisticated‐user perspective.

Details

Journal of Intellectual Capital, vol. 12 no. 2
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 3 December 2018

Lina Dagilienė and Rūta Nedzinskienė

The paper aims to explore the impact of institutional factors on non-financial reporting in the Baltic countries. The vast majority of research in the scientific…

Abstract

Purpose

The paper aims to explore the impact of institutional factors on non-financial reporting in the Baltic countries. The vast majority of research in the scientific literature references practices of sustainable disclosures in developed countries with a focus on legal factors and their effect on corporate reporting. Meanwhile, there is a lack of in-depth empirical data for identifying correlations between institutional (mandatory, normative and company-specific) factors and non-financial reporting in developing countries.

Design/methodology/approach

The theoretical framework of neo-institutional theory was applied to explore how the external environment affects practices of non-financial reporting in developing countries. The approach used in the paper is quantitative.

Findings

The research results reveal that if companies are likely to disclose voluntarily one of non-economic aspects in their reports, they are also likely to disclose more about the other non-economic issues. However, no significant correlations were detected between the disclosure of voluntary (non-economic) and mandatory (economic) aspects. Mandatory factors promote both – economic and non-economic reporting – while normative and company-specific factors promote non-economic reporting more.

Practical implications

The authors contribute to the foreign investors and practitioners by helping to better understand corporate non-financial reporting practices in post-communistic countries.

Originality/value

The research adds to the growing body of research on non-financial reporting practices with particular reference to the developing Baltic context. This study also contributes to scientific literature by exploring the impact of different institutional factors to non-financial reporting in developing countries.

Details

Journal of Financial Reporting and Accounting, vol. 16 no. 4
Type: Research Article
ISSN: 1985-2517

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Article
Publication date: 14 October 2021

Dominika Hadro, Justyna Fijałkowska, Karolina Daszyńska-Żygadło, Ilze Zumente and Svetlana Mjakuškina

This study aims to verify whether non-financial disclosure in the construction industry (CI) responds to stakeholders’ information needs and explores the most frequent…

Abstract

Purpose

This study aims to verify whether non-financial disclosure in the construction industry (CI) responds to stakeholders’ information needs and explores the most frequent topics disclosed in terms of the environmental, social and governance (ESG) pillars.

Design/methodology/approach

This study uses a bag-of-words method and latent Dirichlet allocation to match stakeholders’ expectations with information disclosed by companies. This paper assesses the publicly available non-financial disclosure of the 46 European CI companies covered by the Refinitiv database with ESG scores.

Findings

This study provides two main findings. First, it shows the mismatch between stakeholders’ information needs and what they get in non-financial reporting. Despite non-financial information in CI disclosure, the information disclosed by many CI companies does not meet their users’ information needs. CI companies commonly focus on their sustainable products and health policy while omitting other topics of interest – the circular economy, unethical business behaviour, migrant policy and human trafficking. Second, this study indicates the defects of simple disclosure analysis based on keywords and highlights the importance of context in information analysis.

Practical implications

The proposed novel approach to text analysis offers several practical applications. It is a more effective tool for evaluating companies’ sustainability performance. It may be especially important to ESG rating providers. Additionally, the results may be of interest to companies wishing to improve their communication, and, in particular, to regulators and standard setters in two matters. The first is the need for more pressure to increase awareness among issuers to shift from disclosing large amounts of non-financial information to disclosing good quality non-financial information, which would be appropriate for meeting stakeholders’ expectations. The second is the necessity for deepening issuers’ understanding of the diverse stakeholders’ information needs, considering the substantial differences among industries and improving communication to meet them.

Originality/value

This study introduces text analysis that, apart from keywords, considers the context of these keywords’ appearances in a report’s narration. It allows a significantly improved understanding of the information disclosed and a more stable grounding for reasoning, leading to better and informed decisions. Moreover, this study verifies how the information disclosed matches stakeholders’ needs. Finally, it enriches the literature on sectoral analysis concerning non-financial disclosure.

Details

Meditari Accountancy Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 7 May 2019

Lyndie Bayne and Marvin Wee

The purpose of this paper is to provide preliminary evidence on current practices in non-financial key performance indicator (KPI) reporting in annual reports by listed…

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1250

Abstract

Purpose

The purpose of this paper is to provide preliminary evidence on current practices in non-financial key performance indicator (KPI) reporting in annual reports by listed Australian companies to inform Australian legislators and accounting standard setters contemplating regulations and guidance for non-financial performance disclosure, including input into the revision of IFRS Practice Statement 1: Management Commentary (2010).

Design/methodology/approach

Non-financial KPIs were hand-collected from the annual report narratives of 40 listed Australian companies from five sectors in 2016. Trends in the type, quantity, comparability and range of non-financial KPIs were analysed, and the association between company characteristics and non-financial disclosure was explored.

Findings

In total, 78 per cent of the sampled companies disclose non-financial KPIs in their annual reports, reporting 11 non-financial KPIs per company on average. The most common category is Employee, followed by Environment, accounting for 68 per cent of non-financial KPIs. Provision of comparators is low, with only 28 per cent of non-financial KPIs disclosed with prior year results and 24 per cent disclosed with a target. Companies disclose across a median of two out of seven categories. Company size is shown to be associated with non-financial measures.

Originality/value

The study contributes initial detailed empirical Australian evidence of non-financial KPI reporting practices. A framework is established for assessing non-financial KPI disclosure, adding to voluntary disclosure studies. A data collection method is developed for collecting KPIs from annual report narratives, contributing to the methodology used in voluntary reporting content analysis.

Details

Accounting Research Journal, vol. 32 no. 1
Type: Research Article
ISSN: 1030-9616

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Article
Publication date: 27 November 2019

Federica Doni, Silvio Bianchi Martini, Antonio Corvino and Michela Mazzoni

The recent European Union Directive 95/2014 enforced a radical shift from voluntary to mandatory disclosure of non-financial information. Given radical changes in…

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1033

Abstract

Purpose

The recent European Union Directive 95/2014 enforced a radical shift from voluntary to mandatory disclosure of non-financial information. Given radical changes in reporting practices, there is an urgent need to assess the firms’ attitude to disclose non-financial information regarding the new requirement. This paper aims to investigate whether the quantity and quality of non-financial information, voluntarily disclosed in the years before the directive came into force, were linked to the level of compliance.

Design/methodology/approach

Selecting a sample of 60 Italian companies from the obliged entities, the authors carried out a manual content analysis on corporate reports and developed some research hypotheses to explore if their sustainability practices can affect non-financial disclosures required by the Italian adoption of the European directive (i.e. Legislative Decree 254/2016).

Findings

Evidence showed that prior skills and competencies in non-financial reporting made a significant contribution especially regarding to the presence of business model, but further efforts are expected to improve the quality of non-financial reports.

Practical implications

This study yields an initial assessment of the implementation of the European directive in Italy. It may, therefore, help policymakers to identify ways to improve the harmonization of reporting practices. Preparers can also be supported in choosing different positioning of reporting on non-financial information.

Originality/value

This research provides interesting insights into the ex ante and ex post adoption of the European directive by investigating how Italian companies are reacting to regulatory and institutional requirements. One of the main problems remains the lack of a shared understanding of the term “non-financial”, which can make the communication process difficult and unclear.

Details

Meditari Accountancy Research, vol. 28 no. 5
Type: Research Article
ISSN: 2049-372X

Keywords

Content available
Article
Publication date: 21 December 2020

Joanna Krasodomska and Ewelina Zarzycka

The paper aims to explore the effect of stakeholder pressure on the disclosure of key performance indicators (KPIs) and the patterns of this disclosure in large public…

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1272

Abstract

Purpose

The paper aims to explore the effect of stakeholder pressure on the disclosure of key performance indicators (KPIs) and the patterns of this disclosure in large public interest entities (PIEs).

Design/methodology/approach

The study is based on the content analysis of the disclosures provided by 169 large (PIEs) operating in Poland in 2019. The data was hand-collected from the companies’ non-financial statements. The research hypotheses were empirically tested with the use of linear regression.

Findings

The explanation for the disclosure of KPIs can be found in stakeholder theory, operationalized by stakeholder pressure linked to industry. In line with the expectations, business-related KPIs are disclosed by companies operating in industries with high pressure from investors, environment-related KPIs are presented by companies operating in environmentally sensitive industries and companies operating in industries with high pressure from employees disclose society-related KPIs. According to the results of the study, reporting on employee-related KPIs is accompanied by environmental and social KPI disclosures.

Originality/value

The study contributes to the literature on corporate non-financial disclosures as it provides new insights into non-financial KPI disclosures in a new and relatively unexplored institutional setting established by the Directive 2014/95/EU. While researchers recognize the stakeholders’ environmental and social concerns, there is nevertheless a lack of understanding of their implications for KPIs in measuring social practice. The research fills that gap by addressing the specific impact of different stakeholder groups on the disclosure of KPIs.

Details

Meditari Accountancy Research, vol. 29 no. 7
Type: Research Article
ISSN: 2049-372X

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