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The expansion of non-financial reporting: an exploratory study

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  • Hervé Stolowy
  • Luc Paugam

Abstract

We investigate how non-financial reporting (NFR) is defined and has expanded in recent years. First, we explore the heterogeneity in definitions and current NFR practices. We find a lack of convergence between regulators and standard-setters, as well as leading sustainable firms. Second, we examine the changes in the extent and type of NFR reported by firms over the period 2006–2016. Based on a sample of firms in South Africa, we document a significant increase in the amount of NFR, particularly between 2006 and 2011. This change appears to be driven by new environmental, human capital, performance and strategic disclosures. The relative importance of financial information in corporate reporting decreased substantially over the same period. Third, we compare reporting practices for corporate social responsibility (CSR)/sustainability information between constituents of the S&P 500 index and the EuroStoxx 600 index. We find that overall, the percentage of firms issuing CSR/sustainability reports increased dramatically between 2002 and 2015. Constituents of the U.S. stock index and growth firms are less likely to report CSR/sustainability information, whereas firms in the European stock index in environmentally sensitive industries, with high capital intensity and good CSR performance, larger and with better financial performance, are more likely to report CSR/sustainability information.

Suggested Citation

  • Hervé Stolowy & Luc Paugam, 2018. "The expansion of non-financial reporting: an exploratory study," Accounting and Business Research, Taylor & Francis Journals, vol. 48(5), pages 525-548, July.
    • Handle: RePEc:taf:acctbr:v:48:y:2018:i:5:p:525-548
    DOI: 10.1080/00014788.2018.1470141
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    References listed on IDEAS

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    1. Huang, Xiaobei “Beryl†& Watson, Luke, 2015. "Corporate social responsibility research in accounting," Journal of Accounting Literature, Elsevier, vol. 34(C), pages 1-16.
    2. Michael Erkens & Luc Paugam & Hervé Stolowy, 2015. "Non-financial information: State of the art and research perspectives based on a bibliometric study," ACCRA, Association francophone de comptabilité, vol. 21(3), pages 15-92.
    3. Rachel N. Birkey & Giovanna Michelon & Dennis M. Patten & Jomo Sankara, 2016. "Does assurance on CSR reporting enhance environmental reputation? An examination in the U.S. context," Accounting Forum, Taylor & Francis Journals, vol. 40(3), pages 143-152, September.
    4. Shan Zhou & Roger Simnett & Wendy Green, 2017. "Does Integrated Reporting Matter to the Capital Market?," Abacus, Accounting Foundation, University of Sydney, vol. 53(1), pages 94-132, March.
    5. Cho, Charles H. & Patten, Dennis M., 2007. "The role of environmental disclosures as tools of legitimacy: A research note," Accounting, Organizations and Society, Elsevier, vol. 32(7-8), pages 639-647.
    6. Barth, Mary E. & Cahan, Steven F. & Chen, Li & Venter, Elmar R., 2017. "The Economic Consequences Associated with Integrated Report Quality: Capital Market and Real Effects," Research Papers 3546, Stanford University, Graduate School of Business.
    7. Charles Cho, 2009. "Legitimation Strategies Used in Response to Environmental Disaster: A French Case Study of Total SA's Erika and AZF Incidents," European Accounting Review, Taylor & Francis Journals, vol. 18(1), pages 33-62.
    8. Michael Erkens & Luc Paugam & Hervé Stolowy, 2015. "Non-financial information: State of the art and research perspectives based on a bibliometric study," ACCRA, Association francophone de comptabilité, vol. 21(3), pages 15-92.
    9. repec:eme:aaaj00:09513570910987367 is not listed on IDEAS
    10. Maroun, Warren, 2017. "Assuring the integrated report: Insights and recommendations from auditors and preparers," The British Accounting Review, Elsevier, vol. 49(3), pages 329-346.
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    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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