Readability of Integrated Reports: Do Country-level Institutions Matter?
Tracks
Crystal 2
| Monday, July 1, 2024 |
| 2:35 PM - 2:50 PM |
Presenter
Mr Ajanthan Alagathurai
Phd Student
Griffith University
Readability of Integrated Reports: Do Country-level Institutions Matter?
Abstract
"Purpose: This study aims to examine the influence of country institutions on the readability of integrated reports (IRs).
Design/methodology/approach: By using institutional theory and applying pooled ordinary least squares, the authors examined the possible links between country institutions and the readability of IRs for the voluntary integrated reporting firms listed on stock exchanges globally over the period 2016-2021. The whole text analysis of IRs performed to calculate the readability index, i.e. Gunning Fog Index.
Findings: The study finds a significant influence of country institutions on the readability of IRs, consistent with the notions of institutional coercive and normative pressures. Notably, firms in countries with high cultural values of individualism and indulgence and greater media freedom and investor protection tend to produce more readable IRs. While cultural traits of power distance, masculinity, uncertainty avoidance, and future orientation are negatively linked with IRs' readability, countries’ minimum commitment to accounting enforcement and environmental preservation positively impact IRs’ readability.
Research limitations/implications: The study extends the research on the determinants of linguistic attributes of corporate reports, in particular, the readability of IRs and its findings contribute to the emerging IRs literature.
Practical implications: The investigation of the links between country institutions and IRs' readability in this study shows that cross-institutional differences between countries can shape the readability of IRs. This has implications for the IFRS Foundation, stock exchanges, reporting entities, and other standard-setting bodies.
Originality/value: This study contributes to the international accounting literature by looking at the role of macro institutions in the firm-level information environment. This study is significant as this is one of the first known empirical studies that provides insights into an under-researched area of the impact of country institutions on IRs’ readability."
Design/methodology/approach: By using institutional theory and applying pooled ordinary least squares, the authors examined the possible links between country institutions and the readability of IRs for the voluntary integrated reporting firms listed on stock exchanges globally over the period 2016-2021. The whole text analysis of IRs performed to calculate the readability index, i.e. Gunning Fog Index.
Findings: The study finds a significant influence of country institutions on the readability of IRs, consistent with the notions of institutional coercive and normative pressures. Notably, firms in countries with high cultural values of individualism and indulgence and greater media freedom and investor protection tend to produce more readable IRs. While cultural traits of power distance, masculinity, uncertainty avoidance, and future orientation are negatively linked with IRs' readability, countries’ minimum commitment to accounting enforcement and environmental preservation positively impact IRs’ readability.
Research limitations/implications: The study extends the research on the determinants of linguistic attributes of corporate reports, in particular, the readability of IRs and its findings contribute to the emerging IRs literature.
Practical implications: The investigation of the links between country institutions and IRs' readability in this study shows that cross-institutional differences between countries can shape the readability of IRs. This has implications for the IFRS Foundation, stock exchanges, reporting entities, and other standard-setting bodies.
Originality/value: This study contributes to the international accounting literature by looking at the role of macro institutions in the firm-level information environment. This study is significant as this is one of the first known empirical studies that provides insights into an under-researched area of the impact of country institutions on IRs’ readability."
Biography
Mr. Ajanthan Alagathurai is an accomplished academician with a diverse background in commerce and business administration. He holds a Bachelor of Commerce degree from the University of Jaffna, Sri Lanka, followed by a Master of Business Administration obtained locally. Ajanthan embarked on his teaching journey as a lecturer in the Department of Accounting at the University of Jaffna, Sri Lanka, with a keen interest in academia, where he has been actively involved since 2016.
In pursuit of academic excellence and furthering his research endeavours, Ajanthan received a prestigious PhD scholarship at Griffith University, Australia, in 2021. His research interests revolve around corporate social responsibility (CSR) disclosures, corporate governance, and sustainability accounting. Ajanthan's doctoral research currently focuses on exploring the antecedents and consequences of integrated reporting readability, contributing to the evolving landscape of corporate reporting practices.
Through his academic journey and research pursuits, Ajanthan aims to make meaningful contributions to the fields of accounting and corporate governance while nurturing the next generation of scholars through his teaching endeavours.
Chair
Yathra Gunaratne
Phd Student
Griffith University
