Integrated Reporting – An Influencing Factor on the Solvency and Liquidity of a Company and Its Role in the Managerial Decision-Making Process

Abstract

Corporate reporting has evolved over time as a result of the global economic situation and of the pressure coming from the stakeholders of a company. In this context, the concept of integrated reporting emerged, which, all companies can now voluntarily adopt, except for the South African ones. The International Integrated Reporting Council (IIRC) is the main body that developed the first conceptual framework for integrated reporting in 2013. The main objective of this research is the analysis of the solvency and liquidity of the companies that have adopted integrated reporting, considering the classification of the companies by their business sector. The analyzed sample consists of 13 business sector comprising 56 companies from Europe, North and South America, over 2015–2017. The result of the research reflects that the adoption of integrated reporting does not represent a significant influence factor on the solvency and liquidity of the analyzed business sectors, but can certainly lead over time to liquidity improvement and to the reduction of the insolvency risk. Integrated reporting is a management tool that, if properly used, can bring both external and internal benefits to a company’s economic activity and to its financial performance.