Review of An Article in Integrated Reporting: Melloni, G., Caglio, A. and Perego, P., 2017. Saying more with less? Disclosure conciseness, completeness and balance in Integrated Reports

Review of An Article in Integrated Reporting: Melloni, G., Caglio, A. and Perego, P., 2017. Saying more with less? Disclosure conciseness, completeness and balance in Integrated Reports


Description of The Article Content

. The integrated reports demonstrate how firms create value. It is a brief communication from the organisation about their strategy, their governance and performance. Understanding the integrated report is that it shows the links between its financial performance and the external context of the firm that is economical, social and environmentally (Maroun 2015). The article talks about the integrated reporting with aim show the importance of conciseness in the reporting. The organisations are required to report on the impacts on the society, economy and environment and not just on their profitability. The article contributes to the stream of accounting literature lexical characteristics of narrative disclosures. It is of the view that an integrated report should have a concise communication approach where a firm’s governance, prospects, performance and strategy in the framework of its external environment can lead to the generation of sustainable value.  In addition to being concise, the article suggests that the integrated report should be balanced and complete; this is to mean that the report should include all the negatives and the positives in a fair way. Some reports have a more optimistic approach in the reports which makes it less complete. The article analysis’s an early integrated report and finds out that even in the wake of the weak financial performance of the firm, their integrated report is still longer and less readable. Besides the report appears to be more optimistic which shows that it is less balanced. For a report to be considered as balanced, it has to give both sides of the performance, i.e. the positives and the negatives. The article also analyses the social performance of the early integrated report from the first years. The article contributes to the limited information on the integrated reporting in accounting for sustainability and research of the financial accounting that uses disclosure quality using textual analysis.


The article is of interest to me as a student of contemporary financial and integrated reporting.  the piece is important because; first, it talks about the integrated reporting in creating sustainable value. It gives an in-depth analysis of how an integrated report should appear based on its conciseness and not really on the length of the report as showcased by the earlier reports. It articulates on the importance of conciseness which is an essential element of the integrated reporting and financial accounting (Adams and McNicholas 2007). Secondly, the article emphasises on the balance and completeness of the report which suggests that the integrated report should incorporate both the positives and negatives of the firm so that it can appear balanced. The information from the article supplements what is already taught in class and brings a clear understanding of the integrated reporting.

Technical Issues Within the Article

Problem statement

The problem statement of the article suggests that there Is not enough literature on integrated reporting. However, there is an agreed consensus that increasing the content of the corporate information that is disclosed does not generally mean better disclosure of the corporate data. The increased in the quantity of the published data may even appear as low-quality disclosure and low performance of the organisation (Reuter and Messner 2015). This is the main reason for the international standard bodies to initiate debates and papers to assess to bring the financial reporting disclosures under manageable standards and enhance their quality. The problem statement shows there is insufficient conjunction in the accounting literature on how to separate disclosure quantity and quality. On one side there is a lack of an agreed model and the required techniques used in measuring the disclosure quality. The earlier reports used disclosure quantity as a measure for disclosure quality. Another side deal insists that assessing the volume only could be misleading and that the reports should be concise and focused. Due to all this debate, the problem statement arises on how this best disclosure quality can be measured and defined and its relation to disclosure quantity.

Methodology used

The journal article has used the quantitative methodology in carrying out its research. The research design is descriptive, and it describes the variables of completeness and balance and the conciseness. The research design is descriptive in a way that it tries to describe the current status of the variables which are conciseness, completeness and balance (Kumar 2019). The hypothesis was developed after the collection of data. The data that has been collected from the firm under the IIRC is generally observational. The variables of conciseness, completeness and balance are not controlled.

Major findings

The article examined some of the performance determinants to gain more understanding of the factors that are related to the completeness, balance and conciseness. In a sample from the early adopters of the integrated report, the report is longer and less readable even when the firm was experiencing lower financial performance. The report is less concise, and it appears to be optimistic thus lowering the balance of the report (Melloni et al.  2017). Besides that, the articles find that the organisations with weaker social performance provide the reports that are less readable and with inadequate information about their sustainability which makes them less complete. The findings are generally accurate because they support the elements of a quality integrated report.

Limitations of the study

In as much as the research contributes to the understanding and literature on integrated reporting, the article analysis is subject to scrutinisation. First, the article has heavily relied on the computations in their disclosure of the variables tone. The issues surrounding the textual measure are still changing. There is impreciseness in the taxonomies since the textual analysis in the finance and accounting section is still an emerging issue.

Secondly, the research design as used in the article appears to be biased and has potent ion for self-selection and endogeneity. The article focuses on a firm that is inclined to IR which means that most of the findings have policy implications that support the government bodies and IIRC. This limits the study as there is no broader analysis of companies that are not committed to the integrated report movement.

Impact of the article

The report provides a broad definition of the integrated reporting which creates sustainability value for the organisations. The article outlines the elements of a quality integrated report as one that is concise, complete and balanced. Most reports that are long and less readable tend to have poor social performance. Their reports are usually long and lack adequate information on the sustainability performance of the firm (Eccles and Krzus 2010). This was the case of the early adopters of the integrated report who used quantity in disclosure as a measure of quality disclosure.

The objectives of the IIRC were to develop an integrated reporting framework that is internationally accepted to create foundations for the new reporting model that will enable firms to offer concise information of how they generate sustainable value over time. The IIRC published its first integrated reporting framework in 2o13 (Soyka 2013). This article shows support for the context that was adopted by the IIRC. The report ascertains the framework developed by the IIRC as credible and one which ensures quality integrated reporting. This is important for the IIRC as it seeks to establish an acceptable framework for integrated reporting globally.




Reference list

Adams, C.A. and McNicholas, P., 2007. Making a difference: Sustainability reporting, accountability and organisational change. Accounting, Auditing & Accountability Journal20(3), pp.382-402.

Eccles, R.G. and Krzus, M.P., 2010. One report: Integrated reporting for a sustainable strategy. John Wiley & Sons.

Kumar, R., 2019. Research methodology: A step-by-step guide for beginners. Sage Publications Limited.

Maroun, W., 2015. Culture, profitability, non-financial reporting and a meta-analysis: Comments and observations. Meditari Accountancy Research23(3), pp.322-330.

Melloni, G., Caglio, A. and Perego, P., 2017. Saying more with less? Disclosure conciseness, completeness and balance in Integrated Reports. Journal of Accounting and Public Policy36(3), pp.220-238.

Reuter, M. and Messner, M., 2015. Lobbying on the integrated reporting framework: an analysis of comment letters to the 2011 discussion paper of the IIRC. Accounting, Auditing & Accountability Journal28(3), pp.365-402.

Soyka, P.A., 2013. The International Integrated Reporting Council (IIRC) integrated reporting framework: toward better sustainability reporting and (way) beyond. Environmental Quality Management23(2), pp.1-14.