The Integrated Reporting and Firm Financial Performance

Abstract Today’s businesses have a variety of methods for communicating with a wider range of stakeholders, driven by globalisation and fast social and economic changes. These developments have reshaped stakeholder expectations, emphasising the limitations of financial reporting in meeting these evolving needs. Corporate reporting has therefore undergone a significant evolution, moving beyond traditional shareholder-focused financial statements to include a more holistic approach known as Integrated Reporting (IR). This newest version of reporting remains an area of ongoing development, which most countries are implementing voluntarily. The main objective of this chapter is to trace the evolution of corporate disclosure practices, detailing the concept, origin, objectives and drivers of IR. It then explores the theoretical background and presents studies investigating the link between IR and financial performance (FP) across different settings. Results on this relationship remain mixed, with studies using both market-based and accounting-based indicators for evaluating firm FP.