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This paper aims to investigate the effect of voluntary non-financial reporting on the evaluation of audit risk from the auditors’ viewpoint in a post-crisis period. Furthermore, this paper analyses whether auditors perceive that voluntary non-financial reporting impacts audit risk differently for old clients as compared with new clients.

This study is conducted on a sample of Italian audit firms through a paper-based questionnaire. Both Big4 and non-Big4 audit firms have been included in the sample.

Results show that integrated reporting is perceived to be the most relevant reporting method and intellectual capital statement the least relevant. Surprisingly, empirical findings over the sample period show that auditors do not perceive statistically significant differences between old and new clients.

Auditors can identify opportunities to adapt their assessment model to include voluntary non-financial report information. Moreover, they can use different assessment models regarding the research variables in the case of new and old clients.

Empirical findings highlight the growing role of voluntary non-financial reporting in the auditors’ perception of their client’s audit risk. All the observed voluntary non-financial reporting forms, except for intellectual capital, are considered as relevant by auditors in the evaluation of their client’s audit risk when compared to an indifference point. In addition, findings reveal that female auditors perceive a reduced gap in the relevance between integrated reports and intellectual capital reports compared to their counterparts.

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).

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.

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.

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

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

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.

Research dealing with non-financial reporting formats in public sector organizations is progressively expanding. This paper systematizes the existing literature with the aim of understanding how research is developing and identifying the gaps in need of further investigation.

A structured literature review was conducted by rigorously following the steps defined in previous studies. The structured nature of the literature review paves the way for a solid understanding and critical analysis of the state of the art of research on non-financial reporting formats in public sector organizations.

The critical analysis of the literature shows that most existing studies have focused on sustainability reporting in higher education institutions, local governments and state-owned enterprises, while remaining silent on the healthcare sector. Additional theoretical and empirical approaches should feed future research. Several areas deserve further investigations that might impactfully affect public sector organizations, standard setters, practitioners and scholars.

This paper offers a comprehensive review of the literature on different reporting formats that public sector organizations adopt to report various dimensions of their performance to both internal and external stakeholders. The structured literature review enables the identification of future directions for the literature in this field.

This paper aims to investigate whether managers use impression management through the presentation of non-financial information in an integrated reporting setting.

The authors performed an experiment with experienced professional controllers and part-time students enrolled in the executive master’s degree in finance and control at universities in the Netherlands. In this experiment, we manipulated the financial performance to test if managers present non-financial information differently based on the firm’s financial performance.

This study found that impression management is not applied by including or excluding non-financial key performance indicators (KPIs) in the integrated report, but by using more prominent presentation forms for positive non-financial performance and non-prominent ones for negative non-financial performance. However, the use of impression management through the presentation form decreased when the firms’ financial performance was positive. In that instance, this study noted that managers statistically significantly more often decided to present poor non-financial performance in a prominent presentation format in comparison to managers who were not aware of the financial performance.

A limitation of this paper is that the authors focused on only two impression management strategies: opportunistic/under-reporting and the presentation form. This analysis shows that the use of impression management mainly seems to occur through the presentation format. Future research could investigate other impression management strategies in an integrated reporting setting.

The results of this study are of importance for users of integrated reports, because it will provide more insight into whether firms are truly transparent in their integrated reports. Furthermore, the theoretical implication of this study is relevant to regulatory authorities, because it sheds light on the different forms of impression management used in integrated reporting and the influence of positively or negatively performing KPIs on the decisions of preparers of integrated reports.

Therefore, in this study, the authors add to prior literature by investigating the concept of impression management in an integrated reporting setting. More specifically, the authors perform an experiment and focus on different forms of impression management (the presentation format and under-reporting) through non-financial KPIs in an integrated reporting setting and link it to firm financial performance.

This paper outlines the development of the principle of materiality in the European accounting framework, from the Modernization Directive (2003/51/EC) to the NFI Directive (2014/95/EU) and on to the proposals for a Corporate Sustainability Reporting (CSR) Directive (2021/0104 (COD)). The authors highlight how the requirements for corporate reporting in terms of sustainability matters have changed, underlining the main issues that require further attention by practitioners, researchers and legislators.

This paper is based upon a historic analysis of European Union (EU) regulations in the field of non-financial and sustainability reporting and how these have changed over time. A conceptual comparison of different reporting concepts is presented, and changes in their relevance to the EU accounting framework are discussed as part of the historic analysis. Implications from corporate practice are derived from previous empirical findings from the EU Commission's consultations.

The proposed change from non-financial to sustainability reporting within the EU affects more than simply the terminology used. It implies that a different understanding is needed of both the purposes of company reporting on sustainability matters and the aims of carrying out such reporting. This change was driven by the need and desire to appropriately interpret the principle of materiality set forth in the NFI Directive. However, the recent redefinition in the shift within the EU Commission's proposals presents considerable challenges–and costs–in practice.

Future research on the conceptualization and operationalization of ecological and social materiality, as well as on the use of this information by different stakeholder groups, is necessary in order to (a) help companies that are applying the reporting requirements in practice, (b) support the increased harmonization of the reports published by these companies and (c) fully assess the costs and benefits associated with the increase in reporting requirements for these companies.

Companies have to establish relevant reporting processes, systems and formats to fulfil the increasing number of reporting requirements.

This paper outlines the historic development of the principle of materiality regarding mandatory non-financial or sustainability reporting within the EU. It outlines a shift in rationales and political priorities as well as in implications for European companies that need to fulfil the reporting requirements. In consequence, it describes appropriate interpretations of this principle of materiality under current and upcoming legislation, enabling users to apply this principle more effectively.

The debate about whether corporate reports should focus on numbers or narrative is long-standing. The recent push for business model information to be included in corporate reports has revitalised the debate. Many scholars suggest this constitutes a move towards narrative-based reporting. This study aims to investigate the debate and draws a comparison with the juxtaposition of the narrative and rational paradigms. This study also investigates how accountingisation influences the way business model information is presented in corporate reports.

This study analyses data from the financial and non-financial reports from 86 globally listed companies. This study first uses content analysis to code the data. This study then uses a partial least squares-structural equation model to test how accountingisation influences how firms report their business model information.

This study finds that accountingisation and a rational paradigm shape how companies present information about their business model in their financial and non-financial reports. This suggests that the dominance of quantitative measures in accounting affects even the presentation of narrative-based information. Despite the much-touted shift towards qualitative reporting, this study argues that companies find it difficult to cast off the yoke of a traditional numbers-based mindset.

This paper contributes to the debate on numbers- versus narrative-based corporate reporting and the workings of narrative and rational paradigms. In it, this study lays out theoretical and empirical findings of accountingisation. This study also makes a case for freeing corporate reports from the shackles of an accountingisation mindset.

This study provides new insights into how companies report information about their business models and the influence of narrative and rational paradigms on financial and non-financial reporting.

Non-financial reporting (NFR) is viewed as a major step towards organisational transparency and accountability. While the number of non-financial reports published every year has been growing exponentially over the last two decades, their quality and effectiveness in managing environmental, social and governance (ESG) performance have been questioned. Addressing these concerns, several jurisdictions, including EU Member States, introduced mandatory NFR regimes. However, the evidence on whether such regulation truly translates into enhanced ESG performance remains scarce. This paper aims to fill this gap in the literature by investigating the impact of the EU’s Directive 2014/95/EU (Non-financial Reporting Directive, NFRD) on the ESG scores of Polish companies.

Drawing upon institutional and strategic perspectives on legitimacy theory, the authors test the relationship between the introduction of the NFRD and the ESG scores derived from the Refinitiv database, using a sample of all those companies listed on the Warsaw Stock Exchange whose disclosure allows for measuring ESG performance (yielding 171 firm-year observations from 43 companies).

This study’s findings show an improvement of ESG performance following the introduction of the NFRD. The difference-in-differences approach indicates that the improvement is larger for companies that are subject to the legislation when it comes to overall ESG performance, particularly for environmental and social performance. Nonetheless, to the best of the authors’ knowledge, no significant effect is found for performance in the governance dimension.

This study investigates the role of transnational mandatory reporting regulation in the first years of its enactment. The evidence offers insights into the effects of disclosure legislation in the context of an underdeveloped institutional environment.

The paper aims to show that materiality in the EU's non-financial reporting directive (NFRD) is an ambiguous concept, that its meaning is contested and that this contest for materiality is a contest for the meaning of Corporate Social Responsibility (CSR). Thus, the paper shall highlight a new aspect of materiality as a core principle in non-financial reporting.

The paper combines a historical analysis of the EU's CSR policies, an in-depth textual analysis of the EU's 2014 NFRD and associated documents, of non-financial reporting frameworks and exemplary adoptions of the NFRD in national laws.

The paper identifies two conflicting views of materiality in the NFRD. It shows that these “additive” and “cumulative” views correspond to the approaches taken by the Global Reporting Initiative (GRI) and International Integrated Reporting Council (IIRC) frameworks and by different national adoptions of the NFRD. The paper concludes that this contest for materiality is a contest for CSR – focusing either on business risks or impacts, shareholders or stakeholders, the business case or the social case for such a responsibility.

The paper is mainly based on an in-depth analysis of the European debate on materiality in non-financial reporting. Some of the paper's descriptive results are thus limited to this particular case. However, the main conceptual findings are backed up by an analysis of internationally established reporting frameworks and scholarly debates on the issue.

The paper reveals the practical implications of the contesting “additive” and “cumulative“ understandings of materiality present in the NFRD. The paper thus further underpins the preference for a “double materiality” perspective in the revision of the NFRD and the EC's 2021 CSRD proposal.

The paper makes an original contribution in its explication of different understandings of materiality in non-financial reporting and how these eventually represent different, competing perspectives on the nature of the NFRD and of CSR.

This paper aims to investigate the application of the Italian Banking Association (ABI) industry-specific reporting standard in microfinance institutions by determining whether or not a banking sector reporting standard can enhance non-financial reporting (NFR) quality and volume to meet stakeholders’ information needs in the specific setting investigated.

This paper develops an analysis of available ABI documents from 2006 to 2013 to conduct a content analysis of the quality and volume of the NFR of 98 Italian cooperative banks (CBs) during the 2008–2009 ABI implementation year. These data are analysed using two regression models to investigate the quality and volume of NFR disclosures.

The findings suggest that for CBs in the Italian banking sector, the information provided in the non-financial reports in adherence to the ABI sector reporting standard is relevant in terms of both volume and quality. However, when investigating specific categories of disclosure such as the community, the relevance of the ABI reporting standard is fairly low. The authors question the “one-size-fits-all” approach favouring a more sector-tailored approach to ensure that the NFR covers key sectoral concerns.

The high heterogeneity in the sector could negatively affect the capability of sector-specific standards to truly foster reliable, complete and extensive NFR. Therefore, NFR standard-setters, such as the International Sustainability Standards Board, should consider these heterogeneities.

Reporting standardisation should be multi-voiced and include different – even contrasting – perspectives to promote expert and non-expert engagements.

This paper focuses on hybrid organisations and shows how the theoretical approach of dialogic accountability can improve the quality of sector-specific reporting standards.

This study aims to investigate the differences in the extent of non-financial disclosure (NFD) across companies listed on the Warsaw Stock Exchange over the period surrounding the implementation of the Directive 2014/95/EU.

The sample comprising 134 selected companies. Content analysis and a disclosure index were used to measure the level of NFD. Non-financial reporting practices in the two years before (2015) and one year after (2017) the implementation of the Directive were compared.

The results highlight that there is already a high level of compliance with the European Union’s regulation. The extent of the NFD across different thematic aspects in reporting media increased significantly between 2015 and 2017 in particular in human rights and anti-corruption. The Directive had the largest impact on those firms with previously low levels of NFD and led to more homogeneity of NFD across different industries.

The study contributes to the understanding of the impact of the Directive on the NFD practices by European Union companies. The research has important implications for policymakers because it revealed that mandatory regulations form a crucial instrument in improving the harmonization of NFD. The research suggests that, due to the Directive, stakeholders should be provided with more comprehensive information that they need in their decision-making process.