INTEGRATED REPORTING DISCLOSURE AND ITS IMPACT ON FIRM

VALUE: EVIDENCE FROM ALL LISTED BANKS IN BANGLADESH

A Thesis Proposal
Submitted to the Assistant Professor Ratan Ghosh, Department of Business Administration
in Accounting & Information Systems (AIS), Bangladesh University of Professionals (BUP)
in Partial Fulfillment of the Requirements for the Degree of Master of Business Administration
in Accounting and Information Systems

Submitted by
Masnun Haque
ID Number: 2121321044
Session: 2020-21

Under the Supervision of

Ratan Ghosh
Assistant Professor
Department of Business Administration in Accounting & Information
Systems (AIS)
Faculty of Business Studies
Bangladesh University of Professionals
 Letter of Transmittal
March , 2022
Ratan Ghosh
Assistant Professor
Faculty of Business Studies
Bangladesh University of Professionals.

Subject: Request for acceptance of the Thesis paper.

Dear Sir,

I am very pleased to present to you my completed thesis paper which is being supervised by you.
In every part of my paper, I have tried my level best to make a good combination of learning from
the courses I went through. In this report I tried to be as descriptive as possible for the convenience
for the reader.
Any clarification required & query needed regarding my report will be gratefully acknowledged.

Sincerely,

Masnun Haque
ID Number: 2121321044
Session: 2020-21
 Declaration

I hereby declare that except where specific reference is made to the work of others, the contents of
this dissertation are original and have not been submitted in whole or in part for consideration for
any other degree or qualification in this, or any other University. This dissertation is the result of
my own work and includes nothing which is the outcome of work done in collaboration, except
where specifically indicated in the text.

Masnun Haque
 I recommended that this thesis has been prepared under my supervision by

Masnun Haque
ID Number: 2121321044
Session: 2020-21

Titled
Integrated Reporting Disclosure and Its Impact on Firm Value: Evidence from
All Listed Banks in Bangladesh

be accepted in partial fulfillment of the requirements for the degree of Master of Business
Administration under Assistant Professor Ratan Ghosh, Bangladesh University of
Professionals

…………………………………….
Supervisor
Ratan Ghosh
Assistant Professor
Bangladesh University of Professionals (BUP)
 Acknowledgement

This report would have been impossible without the valuable contributions and limitless help of
several individuals. I have been benefited by many people in the completion of this report. They
have generously supplied insightful comments, helpful suggestions and contributions all of which
has progressively enhanced the quality in this report.
First, my thank goes to Almighty Allah for giving me the grace to finish this report. I would like
to thank all the authors of the journals, books and articles that are secondary sources from where I
have collected necessary information regarding this project. During my preparation, I did not face
any major difficulty rather I enjoyed every moment.
Also, I feel honored to lay my sincerest gratefulness to my honorable academic supervisor
Assistant professor Ratan Ghosh for helping me in every possible way during the preparation of
this project.
Finally, thanks to Bangladesh University of Professionals for arranging an excellent opportunity
to make Thesis paper work where the students are getting the ultimate benefit to make their
academic learning into the experience.

i
Executive Summary:
Corporate reporting formats has been developed into a new way to communicate with the investors
by giving them financial and non-financial information of the company. This reporting system is
the demand from the investors to know information regarding company performance and
conditions with financial indicators which has been not enough for them in the previous traditional
reporting system. Firm value can be created by integrated reporting over the time aimed at the
organization itself such as financial return to providers of financial capital and to other people such
as stakeholders and invertors. To achieve comprehensive accountability this report can be
associated with the interest of the management and the investors of Bangladesh. For this study we
took 33 banks listed in the Dhaka Stock Exchange with the data set of five years from 2017 to
2021. Firm value is the dependent variable and Integrated reporting is the independent variable for
this study. Moderated Regression Analysis has been used to test the hypothesis. The main objective
was to find out whether the integrated reporting does make any value in the firm or not, on the
basis of the result the answer is no, integrated reporting does not create any value in the firm. Firm
with the higher complexity and external financing needs to explain the detail about their activities
in the annual report by following some specific method so that that investors can have knowledge
about their performance in the market. On the basis of the result we can say that complexity of the
organization and external financing cannot be the moderate variables. But in case of Bangladesh
most of the investors are not financially literate. Financial literacy is needed to understand the
importance of integrated reporting. Companies are not mandate to publish integrated reporting in
Bangladesh but to mitigate the gap between the management and the investors this reporting
system can play a significant role. The study has been done only focusing the banking sector of
Bangladesh but other researchers can use this paper as a reference to look forward to the other
sectors of Bangladesh weather they need integrated reporting or not. Financial literacy awareness
can be created by this study among the investors. The management can be also benefited by this
study to know the need of the investors to understand their future prospects.

Keywords- Integrated reporting, Financial literacy, Firm value, External financing, Moderated
Regression Analysis, Complexity.

ii
Table of Contents

Acknowledgement ........................................................................................................................................ i
Executive Summary: ................................................................................................................................... ii
Chapter 1: Introduction ............................................................................................................................. 1
Chapter 2: Literature Review .................................................................................................................... 6
Chapter 3: Hypothesis .............................................................................................................................. 15
Chapter 4: Methodology........................................................................................................................... 19
Sample: .................................................................................................................................................. 20
Variable Measurement: ........................................................................................................................ 20
Research Model:.................................................................................................................................... 21
Description: ........................................................................................................................................... 21
Chapter 5: Findings and Analysis ........................................................................................................... 22
Descriptive Statistics of Research Variable: ........................................................................................... 23
The Results of Moderated Regression Analysis (MRA): ....................................................................... 24
Chapter 6: Conclusion .............................................................................................................................. 32
References:................................................................................................................................................. 35

iii
Chapter 1: Introduction

1
Introduction:

Companies throughout world follows various kind of principles, concepts and elements that
portray the characterize of an organizations’ report of their annual performance. Which has been
questioned, discussed and restructured all over the world. This thing is happening as main concept
such as accountability, value creation and look beyond in practical. What information companies
should report? What kind of financing that an organization uses and that can affect? Organizations
are accountable to whom? Is that possible manage, measure and conservational impact? The
representation and the value of any company is created and continued over time, is it possible to
portray the facts? This kind of questions are raised from many managers, executives, advisors,
academics, regulators and key player of any company the stakeholders.

Integrated reporting is the perfect answer to this critical question. An annual integrated report
shows how an organization develop worth over time, social and conservational view point and
their impact from an economic condition of a market. International Integrated Reporting Council
(IIRC), shows that IR process can solve major issues related to an organization. IR can provide
material information about an organization’s strategy, governance, performance and possible way
that can reflects the commercial, social and environmental issues. It gives us the clear picture or
we can say a right representation about how an organization should describe direction, governance
and how to creates it with the intention of endures value.

On the August 2010, the new formation of the IIRC has been announced by the Prince’s
Accounting for Sustainability Project (A4S) and the Global Reporting Initiative (GRI). The IIRC’s
main intention is to help the investors and other shareholders for better understanding of how an
organization is performing and help the business to take more maintainable decision with
worldwide accepted integrated reporting framework. This framework contains information about
financial, conservational, social and governance information in a clear, consistent and equivalent
presentation. In September 2011, Towards Integrated Reporting: Communicating Value in the 21st
Century a discussion paper has been released by the IIRC. According to this discussion paper, the
Draft Outline of the Integrated Reporting Framework has been published by IIRC on July 2012.
This Outline was important to develop according to the IIRC. And for the first time, the basic
structure of the IR framework and was intended to keep stakeholders informed as the Framework
developed. Later than in November 2012 the draft has been replaced by the IR Framework.
2
The key concepts and principles of an organizations has been demonstrated in the prototype
framework of IR which is released by the IIRC. When they are developing the Framework of IR,
they established a technical task force for prepare the background papers for IR. Lead
organizations has been coordinated by TCG with information from several range of corrections
and countries. Consultation Draft of the first Integrated Reporting Framework was released by the
IIRC on April 2013. The IIRC called on all the potential stakeholders to analyze and critique the
CD after 90 days of release the report on 15 July. For the development of the International
Integrated Reporting Framework the IIRC has established a pilot program which has stared since
2011. As per IIRC many organizations participate in the program and that is creating opportunity
to show global leadership in this field of corporate reporting. The CEO of IIRC called their pilot
program as their innovation hub. This innovation hub pushed the boundaries a bit further by
acknowledging the importance of the reporting way of any organization. After all this time pilot
program participles and practical implication of IR is being developed by investors and businesses.
This program has been run until 2014 and in this period of time the participants are allowed to use
IR framework for maintaining their reporting cycle. After that the IIRC is succeed to develop an
integrated reporting database. This database extracts the information which is chosen from widely
accessible documents. These documents show the elements, principles and guidance about IR.

IR is a process to communicate through annual integrated report that create value over time. An
organization’s strategy, performance, ascendency and external situation that leads to create a value
over any term of time, this essential information is consist in IR. All stakeholders including
employees, dealers, business partners, regulators, and strategy makers are benefited by integrated
reporting and for organization’s ability to create value over time this report is important.

The main purpose of IR framework is to provide a suitable balance between flexibility and
treatment, because of that it is principles based. The impression is to find out the difference in
separate cases of different establishments. But, to get relevant information it needs to enable a
satisfactory amount of resemblance in the organizations. Because of this reasons IR framework
don’t depends on rules for measuring reveal distinct matters. The Framework illustrated integrated
driven thinking, which is included in the CD.

For the assistant of an organizations with the IR process International IR Framework is being
established. The purpose of the Framework is to help establish primary concepts, guidance and

3
fundamentals that will help to control the complete of an integrated report. Organization should
show a meaningful and transparent way to express their value-creation story and integrated
reporting is the way. The quality of organization’s performance can’t be fully determined by IR
framework and it don’t intent to set a benchmark. The user of the report will do assessment of the
basis of the information which is included in the integrated report.

In an integrated report that has seven elements that built and define to show unique value creation
time line. As per CD these elements are ascendancy, organizational summary and external
condition, opportunities and risks, allocation of resources and strategy, model of the business,
performance and lastly future plans. These elements helps the organization to build the story about
business model that can describe external factors that explains management’s strategy.

The corporate reporting format is starting to evolve into a new reporting format which is integrated
reporting. This format combines financial reports and non-financial reports in one document. The
report is developed to help the stakeholders for better understanding regarding company
performance and conditions with financial index that have not been sufficient to provide
information to investors and are less relevant to current conditions where environmental criteria
social and governance are important issues. Important Stakeholders such as potential shareholders,
investors and creditors they care about the past performance as well as future prospects. Financial
and non-financial disclosures with a structured format can reduce unnecessary information and
understanding of corporate stakeholders in decision making.

The transparency of the company is expected to increase to all the stakeholders by a single report
which provide simplify messages. In addition, increasing reporting content is the best way to share
company value creation and risk factors. The company's approaches to maintaining good relations
with capital providers by providing all the information. It indirectly can reduce information
asymmetry and the crisis of trust in the company. Integrated reporting contents are helpful for the
stakeholders, creditors and investors for making financial decision because it is believed to be able
to tell the good and bad of the company. Stakeholders, especially investors, can find out the extent
of the company's wealth, performance and success rate through published integrated reporting.

Integrated reporting is applicable mainly for the multinational companies. It helps the shareholder
to understand the information about the particular organization in a very simple way. The

4
multinational company has critical financial information that may not be possible for the
organization to explain in a short way. So, they need to use integrated reporting element for better
understanding. Banking sector carries a very important role in the financial market and the
investors, shareholders are interested in investing money in the banking sector. In the global
market banking sector do not emphasize integrated reporting as their main reporting system but
nowadays the system has taken over the place of integrated reporting. This reporting system is not
masked for the companies to follow but for the better future and to increase the farm value this is
more important for them to disclose the information about the critical situation and future views
to the shareholders. In Bangladesh banking sector plays a very important role in the market and
the quality of their reporting system has been improved by the years. We can say that after 2017
many banks are following integrated reporting system as their main reporting system.

5
Chapter 2: Literature
Review

6
Literature Review:

The company is trying to give signals to external parties by indirectly disclosing corporate
responsibility. The information about the company is provided by management. Public knows this
fact as a reducing information processing cost. According to (Bini L. e., 2011); (Spence, Signaling
in Retrospect and the Informational Structure of Markets, 2002) This situation is related with
signaling theory. This theory can primarily diminish information irregularity. (Watson, 2002)
describes that when companies have information while investors do not have this moment is called
signaling. This theory believes that the same company information is not accessible to the
managers and shareholder of the company. There is some sensitive information which is only
known by the management of the company but not accessible to the shareholder. Therefore, the
company as an insider who has information needs to provide information to outside parties who
are then captured as signals. Therefore, there are some information which may important to
outsiders and they get the information from insider by doing so they captured as signals. The more
information like this as signals can reduce information irregularity between the companies and
shareholders. This same kind of information is provided by (Baiman, 1996) in their paper that
signals provided to the shareholders can reduce information irregularities and it can increase firm
value.

According to (Spence, Informational Aspects of Market Structure: An Introduction, 1976) the

signals differ on many things such as to judge the quality of the company report it is important to
look for the information about product quality and methodical program selection. Many researcher
use this theory to research on corporate reporting like (Anifowose, 2017); (Bini L. e., 2011);
(Ching, 2017). Companies give information to outside so that stakeholders can it as a signal and
they can make observation about company's competitive advantages. In the end of the day the
integrated reporting used a signal from the companies to reduce information irregularities.
Companies provide integrated information about the firm’s performance and information about
management, these signals can give positive or negative signals to the shareholders while they are
making financial decision. When these signals become more available with quality then we can
expect that the information irregularity will be reduced.

According to (Isabel-Marı´a Garcı´a-Sa´nchez, 2013) the main complication about the business
world has indicating us towards the core information about company’s financial performance,
7
ascendency, sustainability records. As a solution to this problem some leading companies started
publishing integrated reporting which helps the shareholder to take good financial decision. The
Hofstede national cultural system represent of the values of local stakeholders on the basis of
integrated reporting of the company and helps to compare with the facility of several distinct paper
on corporate performance, to find out this was the main objective of this study. In the research they
find out that companies which has stronger socialistic value and give importance is feminism are
in the leading position of information incorporation.

(A.Adams, 2014) in the paper explains that integrated reporting can be impactful for strategic
planning and decision making about financial development with the indication of sustainable
action of corporate actors. They call for academics to contribute for the development of this new
form of accountings to ensure the potentiality to be reached. This paper is written on the response
of John flower’s paper the International Integrated reporting council: a story of failure. This paper
shows some important difference between sustainability reporting and integrated reporting
disclosure. They find out that it supports the current situation about non-mandatory state of
integrated reporting.

(Nurkumalasari, Restuningdiah, & Sidharta, 2019) they worked on integrated reporting on Asia
region. Most of the researcher worked on the benefit of integrated reporting that any company has
received in South Africa with compulsory disclosure. Main objective of their paper is to examine
the effect of integrated reporting on a firm value. They took the sample from non-financial
company of Asian region. Moderated Regression Analysis is used to analysis the hypothesis. They
find out that the significance of the five equations did not meet the significance level and their
hypothesis was not accepted, that means IR does not affect the firm value of the company. IR has
not become a signal for the Asian region.

Paper like (Wahl, Charifzadeh, & Diefenbach, 2019) try show the IR can create value for the
potential investors. Providers of financial capital can be benefited from the enhanced IR which can
provide firm’s information, they examine that. The effect of professional IR disclosure can forecast
accuracy as well as on firm value by analysis the earnings. For their paper they took 167
internationally listed companies and they publish professional integrated report. Their
investigation shows that there is no specific effect of a professionally IR publication on analyst
earnings forecast accuracy and no significant effect on firm value. They concluded the fact that

8
this companies have high level of transparency that lead them to an absent extra effect on IR
disclosures. Positive can be expected when IR is mandatory to publish.

For Public Interest Entities integrated reporting is a creative way to present business reporting
(Velte, Archival research on integrated reporting: a systematic review of main drivers and the
impact of integrated reporting on firm value, 2021). Integrated report includes material information
about the organization though in the world market there are few researches going on about IR,
organizations practicing IR in a very short span. The main object of this research is to give a
detailed picture and understanding about IR in the sectors like ascendency, non-financial
performance factors and reporting-related information and its involvement to measure and increase
firm value. For that they selected 85 quantitative peer reviewed reports on that topic. They
differentiate their research into two part one is the focus on IR quality and another on is focus on
IR adoption. With the result they provide evidence that IR strategy will lead them the improvement
in the firm value and top-level management should add IR as a reporting method. IR will contribute
to increase firm’s value and gain the trust of the shareholders. Monitoring tool is been used to
motivate the top-level manager to use IR. The interdisciplinary issues related to IR solves
heterogenous research design.

(Lee & Yeo, 2015) in their paper try to associate between IR and firm value. For this paper they
collected samples from South Africa region and examine the association between across selection
variation in integrated reporting disclosure and the firm value that can give a perfect picture about
any organization that we can look forward to integrated reporting. The result of this paper is that
there is a perfect relationship integrated reporting disclosure and firm value. They give opinion
about integrated reporting that it can exceed its cost rather than the benefit that can get from this
particular reporting system. When the firm is complicated then there is a possible positive
relationship between integrated reporting and the firm value measurement. Integrated reporting
helps the shareholder to understand the complex information that included in the reporting system
this is the ultimate goal that can be achieved by the integrated reporting. When the firm needs
external financial needs and subsample of the firms with a higher integrated reporting system that
can incorporate it the value with the reporting system. Integrated reporting mitigates the
information irregularities between the insider of the organization and also the outsider of the
organization such as supplier, financial support provider and shareholder. Additionally, we can

9
say that farms with higher integrated reporting outperform who has low integrated reporting in the
terms of both stock market and accounting performance.

According to (Velte & Stawinoga, Integrated reporting: The current state of empirical research,
limitations and future research implications, 2016) after the financial crisis 2008/09 there is an
increase demand in non-financial reporting system and integrated reporting place an important role
in this situation. Integrated reporting combines the traditional accounting system and sustainable
accounting system within one frame and enhance the decision usefulness off modern reporting
system. But integrated reporting is not widely used in around the world so we cannot give and
perfect example about the situation when we will use integrated reporting with a full swing. For
this paper they took 44 empirical studies on integrated reporting which has been published
specially after the adoption of IR framework by the international integrated reporting council. In
this paper they try to explain in a brief way about the integrated reporting practice and the empirical
studies going on around the world. They try to show the factors that contribute to the integrated
reporting implication and its quality. Furthermore, this empirical research will forecast that on the
market reactions on IR that will give us a clearer view about the implication and the adoption of
IR.

With the knowledge and the feedback of the shareholders the initiative and barriers that are
creating problem in implementing integrated reporting in real life (John Dumay, 2017). This paper
specifically adopted the information about the barriers that can reflect the problem of the integrated
reporting in the future aspects and when we are working on the barrier of the in future this paper
can help the researcher to find out more information about the integrated reporting problem. With
the flexibility and the lack of information that may concern about the actual disclosure and merits
in the IRF that could allow to be used for compliance and regardless of other benefits by the IIRC
we can see that that focuses both external and internal issues that driving adoption with the
prominent example being the European union’s direction of non-financial reporting. There is a lot
of way to understand the IR and it can enhance the knowledge about the researcher with a
numerous theoretical and empirical challenges for the academics. This paper gave the light for the
future academic researcher to contribute into the IR policy and the practices.

To find out the organizational value the development of integrated reporting is needed to enhance
and the quality improvement of the existing reporting system practice. Nowadays organization

10
experienced growth pressure by the shareholders because the public is concerned about their
money and the investment strategy that our company used for their future investment. This is also
important for the company to recognize the shareholders concern because the reckless investment
can affect the whole organization and the shareholder may face a huge loss that can create a huge
loss that can create market fall. For that the main challenge is not to increase the amount of
information in the annual report but to increase the relevant information and comprehensive and
considerate reporting practice which may create interconnection between the financial and non-
financial data. According to the concept of integrated reporting it is important to have a connection
between the non-financial and financial data with the figure that has been given in the financial
information. Non-financial data are relatively important for the shareholders understanding and
that can create interest for the investment in the future aspects of the company. This important
information is found in the paper of (Turcul, 2015).

August 2010 is really important for the corporate reporting principles aspects because on that day
IIRC officially launched and created a global framework for the accounting for sustainability
reporting system. Integrated reporting is not mandatory in Bangladesh but keeping in mind about
the growth of the needs of the user of the information for the future investments. The company are
providing more information about their company in the annual reports and for the safety of the
investment they need to include more information about the non-financial aspects that has to
include more information about the non-financial aspects that has been used in the future
investments. In the research paper (Eccles, 2011) they found out is a slight change in the annual
reports in Bangladeshi company. Now companies are more focused about their business model
and sustainability reporting and risk and governance information along with the financial
information that make use of glimpse of companies shorthanded reporting policy and the principle.
From the perspective of Bangladesh most of the companies are providing their annual report within
the time but the reports are not the integrated reporting framework system. They are trying to
follow some framework from the integrated reporting that may give a clear picture about the
organization.

In the paper (Abeysekera, 2013) provides the guidance about the IIRC framework that needed to
be followed when the company is giving the integrated reporting about their company. Integrated
reporting is not a separate reporting system it is an annual reporting system which is constructed

11
with the information which is non-financial and which is important for the shareholders because it
reflects the commercial and social environmental context within the organization. It gives a clear
and constructed picture about the organization how they are performing in the global market and
creating a value in the market. They took sample from the global multinational companies because
integrated reporting is applicable mainly for the multinational companies. Multinational
companies have more complex transactions rather than normal global companies so when the
multinational company is working for their annual report they need to include more information
about their non-financial aspects for the shareholder and because of that they need to include more
and more information to clear their aspects goals, views, mission, vision and future focused
information. From the result we can say that integrated reporting is important for the multinational
company’s annual report framework it is creating a different dimension in the reporting system
policy because shareholders are getting more information from the annual report and they can see
the clear picture about it.

Your prospects and the future of the reporting system of the company is needed to be integrated
and decision supportive information that can lead the shareholders to understand the company’s
perspective of the non-financial information. (Nakib & Dey, 2018) paper did try to examine
whether the company of Bangladesh is going towards integrated reporting or not. For that they
took information from the listed companies of Bangladesh from year 2014 to 2016. Or conduct
index constructing 50 items of the eight content elements has been taken as an IR perspective by
the integrated reporting council in its companies who has adopted the IR. From 2014 to 2016 they
saw an analysis that 22% of the sample companies have adopted IR. The 50 items that they take
as an integrated reporting element which has been increased in the annual report of this companies
with the years in 2014 the percentage of that particular 50 items is 14% but when the year when
the year goes buy 2016 the adoption of those 50 items has an increased amount which leads them
that the Bangladeshi companies are now adopting IR with the system. This is a very good initiative
by the companies after the share market disaster in 2008 because the shareholder needs to trust
this companies with their money. In Bangladesh this is not mandatory for the companies to follow
the integrated reporting but in the global market the integrated reporting keeps a positive impact
in the farm value so the Bangladeshi company are now adopting integrated reporting because that
can give the trust back to the shareholders and the investors. More or less this was the summary of
this paper.

12
Tickets of research and the help of the academics and the rule maker for the financial annual reports
the integrated accounting has been used in the economic environmental and social aspects of
business. We can create triple bottom lines about the integrated reporting according to
(Mohammad, 2019). For this paper they collected 20 different banks and they took the annual
report information from 2012 to 2017 and analyze the financial statement of these banks through
their annual report provided by perceptive disclosure. Using annual report as main data they find
out that the banks are following a bit off information and elements of integrated reporting from
2017 but in 2012 to 2016 the banks do not emphasize their annual reporting system for their
shareholders. The non-financial information of any banks is the most important element in the
annual report of that particular organization because that carries the main target and vision about
their financial infrastructure. This non-financial information carries the material about
environmental, social and governance information about that organization. It is their corporate
social responsibility to disclose the information with the linking financial information and provide
within the integrated reporting.

Integrated reporting is the public disclosure for the financial and non-financial information. (Islam
& Islam, 2018) in this paper they try to and identify the problem regarding the importance of
intangible assets and corporate impacts on the environment, some human health and social
condition that can influence the corporate and political progress. The traditional reporting system
follows some narrow portion of the historical financial performance of any organization and
keeping that information in their mind the international integrated reporting council has developed
something beyond the normal framework they created a whole system that can introduce and
produce important information regarding any organization that needed to be known by the
shareholders. This particular reporting system can create value in the market for the organization
in the long run and they are assuming that this is the future of the reporting system which can
mitigate many accounting frauds. For this paper they took 11 multinational companies of
Bangladesh. They use annual report for their analyzing subject and then look forward to the non-
financial information regarding environment, social and governance information along with the
financial figures. They find out that this information is provided by the company in the CSR
disclosure instead of linking this information in the non-financial sector as an integrated reporting.
Documents the multinational company of Bangladesh is not following the proper integrated
reporting framework. Though it’s not mandatory for the companies to follow the integrated

13
reporting framework but multinational companies have critical financial and non-financial
information that needed to be disclosed in a perfect manner so that the shareholders and the
investors has some clear view about the company.

(Sweeney & Coughlan, 2008) this paper day focused about the corporate social responsibility
reporting it is a part of integrated reporting and in IR it gives importance regarding CSR. Many
organizations report about CSR in many manners they are using different media to communicate
their activities through their reporting system to their investors. Integrated reporting mitigates that
process through there manner that the company can give a clear view about the company and the
CSR activities that has been followed throughout the year by the company within a very short
framework and this framework is understandable by any investors and create a firm value for the
future prospects. For this paper they took 24 random companies throughout the globe and analyze
their annual report. Their main focus was in the non-financial disclosure that follows the CSR
activities of the company. They found out a very interesting result the firm which are following
integrated reporting that gives a better view about their CSR activities and it is really important for
the company to express their future investments and plans in front of the investors.

(Azim & Rahman, 2019) because on the quality and overall presentation about the integrated
reporting that are followed by the Bangladeshi company in according with the IIRC and the
Institution of Chartered Accountants of Bangladesh. D IIRC prepared the international integrated
reporting framework but in Bangladesh ICAB has provided the checklist for the integrated
reporting. There is a lack of discipline and some information missing about the strategy that can
create value of the company these are the main loopholes that find out when the company in
Bangladesh are following integrated reporting. The business model shows that the company is
failed to show the actual connection between the non-financial information with the figures that
can create a content element of IR. IRR is not mandatory to follow by the Bangladeshi company
but the shareholders and the investors need to be more careful and give emphasis Honda reporting
system that can involve the top management to follow the integrated reporting. But we can say
that the involvement of top-level management, project management team, and the main initial
shareholders are essential to implement the integrated reporting, these are the main key players
that can play a role in the integrated reporting system.

14
Chapter 3: Hypothesis

15
Research Hypothesis:

Ha1 = Integrated reporting has a significant positive effect on firm value.

Firms value creation process can be done by the integrated reporting. It can give financial benefits
to the financial capital provider and other investors such as stakeholders and the wider community
that is providing financial support. This can help to align the interest of the manager and the
shareholders to achieve the same goal for the organization. Sustainability strategy can give the
shareholders to find a various mechanism for the value creation. Value creation and risk can be
used as a good signal for the company to increase the value of the company reporting content. This
type of information regarding the accountability carried out by the company it is expected that the
investors are interested in the company. The more non-financial information has been included in
the annual report that follows the integrated reporting can reduce the information manipulation
and that can create increase in the price of the stock. So, on the basis of that we can conclude that
integrated reporting can mitigate the gap between management and the investors because the
company can give the perfect information to the investors about the value creation over the time.

Ha2 = Integrated reporting has a large influence on firm value for companies with higher
organizational complexity.

The complexity of an organization can be measured by differences both spatially, horizontally and
vertically. Many parts of the organization are interdependent. The complexity of the company can
be measured by the departments they had into their pipeline, number of industries, proportion of
intangible assets and firm size. We can categorize this complexity into three parts structural
complexity, relational complexity and complexity behavior. The city can be measured by the
graphical area of the organization, the departments, the subsidiaries and the level of hierarchy in
the organization. Relationship complexity can be measured by the relationship between the
shareholders and the management of the hierarchy that can create a specific amount of value
creation process that can make difference between the other organizations. If the management is
working for the shareholders and the investors the gap between those two mediators can be more
specific than before. The complexity of the information can be created when there is a degree of
changes in the company’s financial figures and that can create a specific amount of difference in
the decision-making process. When the company has a large amount of operations and the amount

16
of the financial figures had not come yet then the information provider may need some time to
provide the specific amount of information so that the shareholders can get the perfect amount on
the basis of which they can decide. But sometimes to clear things out the complexity of the
organization can be minimized by providing broader and more comprehensive information signals
that can give the shareholders a bit of upper hand on the decision-making process. The quality of
that particular annual report that follows the integrated reporting can make a huge difference
between a normal annual report reporting approach and the integrated reporting approach, it can
give a good signal for the investors because they can decide rather than the traditional reporting
system. For the complex transactions from the company more operation regarding the company
can make everything difficult for the investors and shareholders to understand the perfect amount
of information that can give them a perfect result about their decision-making process. Integrated
reporting contained information that is very much construct and serial wise information that can
give the investors a more particular non-financial information better than the traditional reporting
system they can allocate their decision-making process and they can reduce their risk about the
investment of the company and they can know better about the risk management process of that
company, and better identification about the opportunities of future aspects. In the past several
studies working on the integrated reporting regarding the organization that had come complex
transactions but in the modern reporting system we can say that the company with the most sector
and the and the more divisions and the amount of product that can create a complex situation for
the company better should use the integrated reporting to show the perfect image about the
companies non-financial and financial environment.

Ha3 = Integrated reporting has a large influence on firm value for companies that require
greater external financing.

The company wants to expand their activities this is really important for them to get external
financing that can boost up their activities for the future aspects. External financing can make a
huge cost rather than internal financing because when a company is getting external financing they
need to disclose their source with the perfect amount of information. The disclosure sector of the
annual report needed to be clearer in front of the shareholders and other investors so that they can
know about their invested money is not going on the wrong way. To disclose about the external

17
financing the company needs to be more careful about their reporting system and the integrated
reporting system helps to disclose this critical financing information in a very understanding way.
This level of information helps to understand the quality of the annual report and this can carry the
value of the particular firm. This corporate disclosure is a communication tool to give the signal
to the shareholders and the investors whether the company is good or bad. It helps the company to
gain the trust of the investors for their future investment. Sometimes when the company is getting
financing from the outside they do not want to disclose the perfect source of information in the
annual report because the shareholders and the investors can give them my idea that those
companies are not good for the future investments but the management of the company wants to
take the decision for themselves and that make the information gap between the management and
investors. External financing activities and the information provider can make a smooth
relationship between the management and the capital provider of the company. Sometimes
integrated reporting framework can give a large amount of disclosure on the annual report
regarding non-financial activities but this method can change the whole reporting system in a very
subtle way. Other researchers work on the quality of the disclosure of corporate governance
practice in the company that can be influential for the company with a higher external financing
need. In many papers this is proven that the company with a high external financing must have to
disclose their external financing information with the help of IR that can create a firm value over
the time.

18
Chapter 4: Methodology

19
Research Methodology:
Sample: The sample size consists of 33 banks listed in the Dhaka Stock Exchange which are
mandated to issue integrated reporting. The sampling technique used in this study was purposive
sampling because the other listed companies do not have to issue integrated report compulsory.
Here the data set included the information of this selected banks for five years from 2017 to 2021.
Variable Measurement: The dependent variable for this study is the firm value. The
measurement of firm value variables used the Tobins' q formula, this is the most common measure
is used for researching firm value (Ika Sebti Nurkumalasari, 2019) The greater the value of
Tobin’s q will show that the company has better investment opportunities and growth potential.
The independent variables for this study are integrated reporting. The integrated reporting
measurement index was determined based on eight content elements determined by The
International Integrated Reporting Council.
Scoring analyzing can be done by the presence or absence of each item by giving a score of 1 if
the company reveals integrated reporting elements, 2 when the company revealed this particular
information about the company in an average manner, we give them score 3 when the company
follow the perfect integrated reporting manner to show that particular non-financial information
and 0 otherwise. company can receive scores ranging from 0 to 60 depending on the number of
items disclosed.
There can be two moderator variables one is organizational complexity and external financing.
Organizational complexity (COMPL) will be measured by the proxy number of subsidiaries. The
second moderator variable is external financing (EKST). This variable is known by the ratio of
long-term debt to total assets.
This study needs the variable leverage, profitability, and size of the company. For the measurement
of the leverage Debt to Total Assets Ratio (DAR) is needed. And for the measurement of the
profitability Return on Assets (ROA) is needed. Company size becomes an important control
variable because size can influence the company's capacity to actively provide social activities.
This is measured by the size of the company was LN Assets.

20
Research Model:
For this study I’ll use MRA (Moderated Regression Analysis). This technique will help to identify
the presence or absence of moderator variables.
For this study we will use two moderators’ variables, there are five regression equations. The five
equations are as follows:
TOBINQ=α+β1IR+ β2ROA+ β3DAR+ β4SIZE+ε (1)
TOBINQ=α+β1IR+ β2COMPL+ β3ROA+ β4DAR+ β5SIZE+ε (2)
TOBINQ=α+β1IR+ β2COMPL+ β3 IR *COMPL +β4ROA+ β5DAR+ β6SIZE+ε (3)
TOBINQ=α+β1IR+ β2EKST+ β3ROA+ β4DAR+ β5SIZE+ε (4)
TOBINQ=α+β1IR+ β2EKST+ β3 IR *EKST+ β4ROA+ β5DAR+ β6SIZE+ε (5)
Description:
TOBINQ: Market value of equity plus debt value divided by the total book value of assets.
COMPL: Number of subsidiaries.
IR: The number of <IR> element disclosure items divided by the maximum number of disclosures
of the <IR> element.
SIZE: Natural journal of assets.
EKST: Long-term debt divided by total assets
ROA: Profit after-tax net income divided by total assets
DAR: Total debt divided by total assets

The decision-making criteria for the MRA regression model have been explained by (Sharma,
1981). The result can be concluded by 3 equations, if we can see that the equation two and three
or equation five or six are not significantly different then the COMPL and EKST variable and not
being able to call moderate variable but only independent predictor variable. There is another way
to explain the equation if the equation 1 and 2 are not different but it needed to be dissimilar from
the equation 3 or equation 1 and 4 are not different but it needed to be dissimilar from equation 5
then we can say that COMPL and EKST is pure moderator variable. But if those two equations
that means 1,2 and 3 the 1,4 and 5 are vary form each other, then the COMPL and EKST can to
be consider as moderators at all.

21
Chapter 5: Findings and
Analysis

22
Findings and analysis:

Table 1
Descriptive Statistics of Research Variable:

Table 1 shows the outcomes of the descriptive statistics of all the variables which is used in this
study. The average company has a firm value of 20377962719 with the highest value of
57618535129 while the lowest value is 3589392422. Then the mean value that means the average
integrated reporting disclosure is .502727, which means that the company has scored 30 out of 60
during 2017-2021. Based on table 1, the results show that the average company has a complexity
of 3.85 which means that the company had around 3 to 4 subsidiaries with the maximum value of
8 and minimum value of 2. In addition, the average external financing of the company is .077661
from the maximum value of .4297. These results indicate that most companies have relatively low
external financing on average.

23
Table 2
The Results of Moderated Regression Analysis (MRA):

Moderate regression analysis results for testing the hypothesis is available in the Table 2. Based
on the MRA analysis results we can conclude the answers for H1 hypothesis. In the table we can
see that the integrated reporting value of the company that the significance value of the IR does
not meet the significance level which is 0.05 or 5%. Based on the result we can say that H0 is not
rejected. That means integrated reporting does not create any specific value on the firm. The high

24
and the low score of the integrated reporting in the company does not important to the shareholders
of the company. Result of this study does not support the authenticity of the signaling theory that
says that integrated reporting can be useful for the companies as a signal or as an approach to
reduce the information gap between the company and the shareholder mainly the investors. On the
basis of the signaling theory we can conclude that the companies are using integrated reporting as
a tool for giving the signal to the investors about their company and with the help of this companies
can create a specific value on the eyes of the investors. The basis of the result of this study we can
say that integrated reporting does not serve the requirement which is needed for signal theory.
Because integrated reporting does not benefit the company to increase their value.

One of the most main focused objectives of integrated reporting is to be a communication system
for the company to the shareholders. This communication can create a corporate value in a short,
medium and long term. But this objective does not go with the characteristics of the short-term
investors because their main objective is the capital gain and sell the share in a very short period
of time. (Utami, 2016) mentioned in his paper that integrated reporting is not the essential
disclosure system for the company performance to the short-term investors because in this
reporting system the company included their home non-financial information in a very detailed
manner. The medium and the long-term investors of the company need this detail information for
their future investment so they can be benefited by the integrated reporting system.

This paper is based on the information of the banking industry of Bangladesh. Different banks
include their non-financial information in a different manner and we can conclude that the weak
understanding of this we can conclude that the weak understanding of this non-financial
information can be the reason that this is still not accepted for the user such as investors and the
financial analyst as a deciding factor for their future investment. For the investors this is still
difficult to understand the relevance of non-financial information and financial information in the
integrated reporting according to that significant impact on the decision-making process.
Integrated reporting is mainly the communication between the firm and the shareholders but when
the shareholders are not financially educated to understand the disclosure of non-financial
information in the integrated reporting then its usefulness is hampered by the system. In the papers
like [ (Abhayawansa, 2018), (Adhariani & De Villiers, 2018), (Hsieh, 2014) ] they also discuss
about the gap between the company and the investors regarding reporting system, maximum

25
investors have a very limited knowledge about the reporting system of any company they took the
decision on the basis of the financial figures from the past few years and the influence of the broker.
Big market players need to read in detail about the information of the particular company on the
basis of the information they take the financial decision whether they want to invest or not but this
particular educated investor number it’s pretty low in the market. In Bangladesh people who are
investing in the share market they don’t even know how to make decisions about the investment.
Non-financial information is a very sensitive part of any company, maximum number of the
investors don’t even know how to interpret this non-financial information of the company. In
Bangladesh integrated reporting system is not fully used in the market but this is essential for the
companies to include the information regarding integrated reporting to create awareness among
the investors. The investors and financial analyst for them it is impossible to read out all the
financial information that is included in the annual report to decide, they don’t have that much of
time to understand the non-financial portion of the company and make the decision out of it.
Integrated reporting it’s a long and unwarranted description report for the user, and they lose
interest while they are reading the report.

In this paper we worked on the banking industry of Bangladesh we can conclude the result from
moderated regression analysis that there is no positive relationship between integrated reporting
and the firm value. Most of the users of annual report are not interested in the integrated reporting
section because this is a long narrative report which need a time to read out and decide out of it
but in Bangladesh most of the users are using their investment knowledge on the basis of other
people. Financial literacy is really important to understand the integrated reporting so in
Bangladesh most of the people are not financially literate. Banks do business with the money of
other investors they don’t have their own money to invest on so this is really important for the
investor to understand the whole activities of the bank and for that integrated reporting is needed.
In the integrated reporting they will include their future investment goals, activities, mission,
vision, financial assurance, corporate governance, strategic focus and future orientation, risk
management operations and additional material repot regarding relevant rules and regulation of
banks. For banks it is also important to show the performance and prospects that lead to the creation
of the value over the short, medium and long term in aims to cover a vast of the business activities
within the sustainability framework. Banks must effectively manage their resources and
relationship to maintain and ensure attractive return on their investment over the long term. Needs

26
to keep the report constant and complete including all the material matters both positive and
negative in a fair way and without material inaccuracies.

For testing H2 hypothesis we will look into the coefficient table and compare the equations 1,2
and 3. We will look for the significance level of the IR variable and IR*COMPLS variables in all
these 3 equations. As we can see the IR variable is not significant in equation 1 and 2 but is
significant in equation 3 whereas IR*COMPLS is also significant in equation 3, thus the H0 is not
retested. In order to fully reject the H0 hypothesis we need all the selected variables in all the 3
equations to be significant at significance level of 0.05 or 5%, it can be concluded that the
COMPLS variable cannot be a moderator variable. Therefore, Integrated reporting has not a large
influence on firm value for companies with higher organizational complexity.

The relationship with the farm does not strengthen or weaken the high or low complexity of the
organization in the company. The signaling theory does not supported by this study. On the basis
of that result we can conclude that signaling theory is rejected by this study and because of that
the integrated reporting quality cannot be the finest media to prompt or designate the complexity
of the company management. Some elements which helps the company to express their complexity
with the integrated reporting such as description of the strategy regarding resource allocation as
well as the business model starting from the input process and the activities that is related with the
output, these are the important additional information for the investors to understand the depth of
the complexity of the business but on the basis of this paper the investors do not need this complex
information to make an investment decision.

On the basis of the study we can conclude that in Bangladesh most of the banks are not including
the content which is related to the integrated reporting. Elements like strategy and resource
distribution, market position and basis of the presentation and the preparation these elements are
not revealed in the content of the company’s annual report. On the basis of that content element
the shareholders and the investors will be able to find out the objective of the organizational
strategy, how they achieve their organizational goal and the challenges and the reservations that
might occur in the future events. Most of the banks are failing to explain about their presentation
of company’s information about the process of determining materiality, limitation and the material
measurement methods in the annual report. But the elements in the integrated reporting can help
the investors and the stakeholders to find out the maturity and the guarantee about the investment

27
decision. In Bangladesh integrated reporting guarantees are still in a weak position in the reporting
system of the banks and which is still a voluntary and subjective for the companies, there is no
regulation that the company needs to publish the integrated reporting in a mandatory way. So, we
cannot illustrate the actual picture of the in regulation and guarantee of material disclosure in the
integrated reporting.

In Bangladesh banks and other organizations follow the traditional way to present the annual
report. In the traditional way we can only look backward over the company’s financial
performance, with the help of integrated reporting we can look forward to the strategic
performance to manage and mitigate risk and right valuation of other tangible and intangible assets
which is not reported on the structured manner in the traditional reporting way. Financial literacy
is needed to understand the integrated reporting system because in this particular reporting system
can disclose all the necessary information which is needed for the investors to make an investment
decision. On the basis of this particular study we are rejecting the hypothesis but in my
understanding for the betterment of the reporting system and mitigate all the future risk that can
arise in the share market we need a better reporting system which can give the investors all the
necessary information that is needed to make an investment decision.

In the global market the multinational companies are using integrated reporting because they have
a very complex operational activity. The multinational companies have operation all over the globe
so they need to disclose their activities and vision about the future operational activities.
Traditional annual report cannot disclose all the material matters about the company but integrated
reporting system can disclose segment wise their operational activities. In the cases of bank, denied
external financing to expand their activities so when the company is using the external financing
they will have a bit more of complex transactions that cannot be fully cleared out with the
traditional annual reporting system. But all the elements are not included in the statement of banks
in the perspective of Bangladesh. As we said earlier that financial literacy is needed to understand
the integrated reporting on the basis of that we can say that the investors who has a limited
knowledge, capacity and the resources will find it difficult to relate this information into asset
pricing of the company valuation process that have a high complexity we can assume. In
Bangladesh this is not mattered that the higher value or the lower value of the organizational
complexity can make a difference between the integrated reporting and the firm value.

28
Banks also have a complex term which is important financial institutions, fulfilling their societal
purpose, dynamic financial intermediation, satisfactory risk profile, respectable capitalization and
fairly diversified ownership.

For testing H3 hypothesis we will look into the coefficient table and compare the equations 1,4and
5. We will look for the significance level of the IR, EKST and IR*EKST variables in all these 3
equations. As we can see the IR, EKST and IR*EKST variable is not significant in all three
equation 1,4 and 5, thus the H0 is not retested. In order to fully reject the H0 hypothesis we need
all the selected variables in all the 3 equations to be significant at significance level of 0.05 or 5%,
it can be concluded that the EKST variable cannot be a moderator variable. Therefore, Integrated
reporting has not a large influence on firm value for companies that require greater external
financing. That means the high or the low external financing in the company does not make the
company strengthened or deteriorated in the integrated reporting relationship with the firm value.
On the basis of the result we can conclude that this study does not support the signaling theory
which shows that the integrated reporting can be the most important way for the companies to
show that external financing and good relationship with the capital provider does not make the
firm value higher.

The disclosure about the external financing is the most important material non-financial
information from the perspective of banks. Financial figures will show the amount which is
collected from the external sources but the process of getting those financing supports is the non-
financial information which is needed for the investors. The company is making a strategy about
the financing situation of the company and for that they need to gather knowledge about the sources
they can find and collect that financial support which is needed to achieve their future goals. The
information about external financing is a sensitive data which is needed by the investors. External
financing information needed to be disclosed in a detailed manner but traditional annual reporting
way cannot the actual detailed picture about the sector so we need IR to show the actual and detail
narrative paragraph about the information of external financing activities. Four banks this is really
essential for them to show the information about their external financing source because when two
business with the money of other investors.

As we said earlier financial literacy is needed to understand the integrated financial reporting but
from the perspective of Bangladesh this is the most less important factor which can affect in their

29
decision-making process. Company needs external financing to expand their business and the
source of that particular external financing needs to be shown in the annual report in a detailed
manner so that the investors can get a knowledge about the source. In Bangladesh the common
people who are investing in the share market are facing problems because of lack of financial
literacy. When the company is including their external financing source the annual report gets a
long narrative that makes difficult for the user to understand the perfect picture about the situation
but in the integrated financial reporting the users can easily understand the picture that the
company is trying to show. In the disclosure section the company who are getting finals from the
external source needs to show the investors about the future vision that is match up with that
particular source. In some cases when the company is getting the external source of financing, the
management can hide some of the information when they’re using a traditional reporting system
because in the traditional reporting system they cannot include all the information about the
external sources but when they are including that information in the integrated financial reporting
system they have a scope to show the detail picture about the situation.

On the basis of the result we can conclude that the disclosure of integrated reporting is not needed
by the financial capital provider because different investors using different method to evaluate the
company. When the investor is using fundamental analysis forget them integrated reporting can
be a very useful source of information that they are needed but when the investors are not
dependent on the fundamental data they can go with the historical data and some technical analysis
for them integrated reporting is not needed for the decision-making process. Some of the investors
are using qualitative data as an information source from the third party this is the most useful
method to make an investment decision but the common people who are investing in the market
don’t have that much of source to gather that knowledge and use it as an investment decision.
Integrated reporting is mainly needed for the investors and this should impose as a mandatory
reporting system from the government. Investors in Bangladesh are relying on the source of the
personal evidence on the financial data such as qualitative financial information, competitive
advantage, ownership structure and management’s credibility. Some of the banks and companies
are following integrated reporting system and that part play a very less important role in the making
investment decisions in the perspective of the investors. Some of the investors stated that
environmental disclosure and the corporate social responsibility are the irrelevant portion and a
very limited for the financial analyst. The investors only believe in the performance of the past

30
few years and some of the relevant information that can give them a clear view about their vision.
This little part of information is enough making a financial decision for the common investors but
people who are investing their money in the market in a larger way they need a detailed information
about the company’s market position and they can get that from our annual report. Is that annual
report is using the traditional way of disclosing the matter then that will not be enough for them to
make a financial decision to help them out integrated reporting is needed to show the actual site
the actual situation which the company is facing. In Bangladesh integrated reporting is not able to
mitigate the breach between the information provider and the information needed to decide about
the investment. The improvement of the quality of integrated reporting disclosure does not make
any impact on the investment decision and increase the value of the company that matters to the
investor. If we follow the signaling theory we know that the companies are giving different kind
of signals to attract their investors and the investors investigate the matter to follow up the data to
decide and integrated reporting is the main tool for giving that signal from the perspective from
the perspective of the company. In Bangladesh this signaling theory is not applicable from the
perspective of the company because most of the investors are not financially literate they make
financial decision on the basis of figures that shows the previous financial performance which is
quantitative data. This information does not conclude their future activities and the goals they want
to achieve with the help of that investment. In Bangladesh integrated reporting is not able to
mitigate the gap between the organization who has a large external financing and the capital
provide.

31
Chapter 6:
Conclusion

32
Conclusion:
Firm value can be created by integrated reporting over time aimed at the organization itself such
as financial returns to providers of financial capital and to other people such as stakeholders and
invertors. To achieve comprehensive liability this report can be affiliated with the interest of the
management and the investors of Bangladesh. In the country like Bangladesh this kind of research
haven’t done yet, so the main objective was to discover whether the integrated reporting does make
any worth in the firm or not, on the source of the result the answer is no, integrated reporting does
not create any value in the firm. Firm with the higher complexity and external financing needs to
explain the detail about their activities in the annual report by following some specific method so
that that investors can have legitimacy about their performance in the market. On the basis of the
result we can say that complexity of the organization and external financing cannot be the moderate
variables. Integrated reporting can be used as a signal to the shareholders from the perspective of
the company, especially for the capital provider to reduce the information irregularities between
the investors and the management. To reduce the information irregularities, it is expected that
integrated reporting can increase the value of the company especially when the company have a
high organizational complexity and external financing, but from the result we can conclude that in
Bangladesh’s banking sector these factors are not important for the investors that can affect in their
investment decisions. Because most of the investors are not financially literate. Financial literacy
is needed to understand the importance of integrated reporting. Companies are not mandate to
publish integrated reporting in Bangladesh but to alleviate the gap amongst the organization and
the investors this reporting system can play a significant role. If we talk about from the perspective
of the company, they need to give clear knowledge about their planning along with their vision in
front of the investors and to attract more investors they need gain their trust by giving them
authentic information regarding they’re planning. Integrated reporting can be the way to gain the
investors trust. The multinational companies are reporting by following integrated reporting
framework because they have a huge operation to run and to explain their activities with their
investors and this reporting system is the only way to express they’re planning. This is not
important that the multinational companies will only follow the integrated reporting and the other
organization will not follow this reporting system because they have a less operational activities,
this reporting system needed to be mandatory to publish for the all the sectors. To make easy
decision about the investment integrated reporting can be the tool for the investors.

33
34
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