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The Role of Existing Regulation and Discretion in Harmonising Non-Financial Disclosure

Author

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  • Selena Aureli
  • Elisabetta Magnaghi
  • Federica Salvatori

Abstract

The 2014/95/EU Directive is the first regulatory attempt to harmonise large entities’ non-financial reporting. It sets minimum requirements whilst leaving discretion to Member States in transposing relevant aspects of disclosure. The transposition is the first moment in which the Directive directly impacts on companies and determines whether they will be complying with more similar rules. This study uses the fit/misfit theory to assess the achievement of formal harmonisation between the UK, France and Italy. An analysis of domestic regulations shows that discretion favoured convergence of rules but also the presence of old and new differences. All countries had to engage in some degree of change to be compliant. The UK and France had a high degree of legal fit and used discretion to limit adaptation costs by minimising the legal intervention and over-implementing the Directive respectively. Italy instead welcomed the legal misfit and greatly departed from its previous regulation.

Suggested Citation

  • Selena Aureli & Elisabetta Magnaghi & Federica Salvatori, 2019. "The Role of Existing Regulation and Discretion in Harmonising Non-Financial Disclosure," Accounting in Europe, Taylor & Francis Journals, vol. 16(3), pages 290-312, September.
    • Handle: RePEc:taf:acceur:v:16:y:2019:i:3:p:290-312
    DOI: 10.1080/17449480.2019.1637529
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    Citations

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    Cited by:

    1. Nurul Jannah Mustafa Khan & Hasani Mohd Ali, 2023. "Regulations on Non-Financial Disclosure in Corporate Reporting: A Thematic Review," Sustainability, MDPI, vol. 15(3), pages 1-23, February.
    2. Domenico Raucci & Lara Tarquinio, 2020. "Sustainability Performance Indicators and Non-Financial Information Reporting. Evidence from the Italian Case," Administrative Sciences, MDPI, vol. 10(1), pages 1-17, February.
    3. Adriana TIRON-TUDOR & Teodora Viorica FĂRCAŞ & Ioana DRAGU & Ecaterina Monica MOISE, 2020. "Non-Financial Reporting in Romania in the pre-Directive 2014/95/EU Period (1990-2013)," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 1(5), pages 63-72, May.
    4. Krivogorsky, Victoria, 2024. "Sustainability reporting with two different voices: The European Union and the International Sustainability Standards Board," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 56(C).
    5. Adriana TIRON-TUDOR & Teodora Viorica FĂRCAŞ & Ioana DRAGU & Ecaterina Monica MOISE, 2020. "The Road to Transposing the Non-Financial Reporting EU Directive within the Romanian Context – The 2013-2020 Period," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 1(6), pages 63-72, June.
    6. Ries Breijer & René P. Orij, 2022. "The Comparability of Non-Financial Information: An Exploration of the Impact of the Non-Financial Reporting Directive (NFRD, 2014/95/EU)," Accounting in Europe, Taylor & Francis Journals, vol. 19(2), pages 332-361, May.
    7. Adriana TIRON-TUDOR & Teodora Viorica FĂRCAŞ & Ioana DRAGU & Ecaterina Monica MOISE, 2020. "Non-Financial Reporting in Romania in the pre-Directive 2014/95/EU Period (1990-2013)," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 0(5), pages 63-72, May.
    8. Chiara Mio & Marco Fasan & Carlo Marcon & Silvia Panfilo, 2021. "Carrot or stick? An empirical analysis of the different implementation strategies of the EU directive on nonfinancial information across Europe," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(6), pages 1591-1605, November.
    9. Cecília Carmo & Cristiana Ribeiro, 2022. "Mandatory Non-Financial Information Disclosure under European Directive 95/2014/EU: Evidence from Portuguese Listed Companies," Sustainability, MDPI, vol. 14(8), pages 1-23, April.
    10. Paula Gomes dos Santos & Fábio Albuquerque & Maria Albertina Barreiro Rodrigues & Ana Isabel Morais, 2022. "The Views of Stakeholders on Mandatory or Voluntary Use of a Simplified Standard on Non-Financial Information for SMEs in the European Union," Sustainability, MDPI, vol. 14(5), pages 1-22, February.

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