Madhuhansi, M.K.N.1 and Karunarathne, W.V.A.D.2
12Department of Accountancy, Faculty of Commerce & Management Studies, University of Kelaniya, Sri Lanka.,

DOI : 10.57075/jaf922209


Even though integrated reporting (IR) is not a novel concept to the world, it is still not a mandatory requirement in the Sri Lankan context. However, it is an expansion of the innovative reporting dimension by incorporating financial and non-financial information. Recently IR has been fascinating to many companies. As a result, many Sri Lankan businesses are adopting integrated reporting at various levels with the guidelines of the International Integrated Reporting Council (IIRC). Due to the voluntary approach of applying integrated reporting in Sri Lanka, the level of adoption of integrated reporting quality differs from one to another firm. When observing the individual annual reports of listed public companies in the Colombo Stock Exchange (CSE), some companies adopt well to the guidelines which are stated in the International Integrated Reporting Framework, On the other hand, some other listed public companies are not paid attention to the International Integrated Reporting guidelines and level of integrated reporting quality adequately. Hence it is important to realize the level and the quality of integrated reporting adoption of listed companies in Sri Lanka and how its disclosure level varies with the different firms’ specific characteristics. Accordingly, the primary purpose of the study is to examine the impact of a firm’s specific characteristics on the level of integrated reporting disclosure quality of listed companies in CSE. Beyond the theoretical suggestions, this study provides practical implications for different types of stakeholders who use the information to make different business decisions.
This study used data from 53 companies that are operating at CSE. Secondary data were gathered from the annual reports of selected companies for the period from 2017 to 2020. Profitability, financial leverage, ownership dispersion, board diversity, and board independence were used as the independent variables in the study. The Panel data regression model was employed to analyze data with E-Views software. The results showed that profitability and financial leverage variables are statistically significant and positively influenced the integrated reporting adoption level and quality of disclosures. Furthermore, the firm size has a big impact on the quality of integrated reporting implemented. The study’s findings may be helpful to future scholars in this field and business decision-makers in gaining insight into the quality level of integrated reporting adoption already present in Sri Lankan listed companies in CSE and how it is affected by factors unique to the selected firms.

Keywords: Quality of Integrated Reporting, Firms’ characteristics, Colombo Stock Exchange (CSE), International integrated reporting council (IIRC).

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