Abstract:
The recent development of integrated reporting intends to address the limitations associated
with corporate reporting practices. This paper aims to examine whether a statistically
significant relationship exists between integrated reporting quality and financial
performance. Secondary data was used, namely the integrated reports and annual financial
statements of South African banks listed on the Johannesburg Stock Exchange
(JSE) for 2010–2014. For the period 2005–2009, only the financial statements were
used, since integrated reporting was not yet mandatory. The research design was longitudinal
and it combined qualitative and quantitative methods. Descriptive statistics
and Feasible Generalized Least Square (FGLS) were used to explore the relationships
between financial performance and integrated reporting quality. The results indicate
that there is a positive relationship between integrated reporting quality (IRQ) and
earnings per share (EPS). However, there is no significant relationship between IRQ
and Tobin’s q (Q-Ratio), IRQ and return on equity (ROE), IRQ and return on assets
(ROA) as well as IRQ and economic value added (EVA). Moreover, there are no significant
differences on the financial performance of the listed banks before and after the
introduction of integrated reporting.
