School of Accountancy (ETDs)

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    Investigating the relationship between integrated reporting quality and its effect on risk of the top 100 JSE listed companies in South Africa
    (University of the Witwatersrand, Johannesburg, 2023-12-13) Jhavary, Musnaa; Cerbone, Dannielle
    This thesis investigates the relationship between the quality of an organization’s integrated report, as defined by the EY Integrated Reporting Awards, and the risk of the organisation. To achieve this the relationship between an entity’s financial ratios and the quality of the integrated report it produces are calculated and explored. A quantitative research approach is used and risk is proxied using debt and equity ratios collected from the IRESS database, as well as integrated reports found on the websites of the top 100 JSE-listed companies over five years from 2017 to 2021. A regression is performed using the Statistical Package for the Social Sciences (SPSS) software. The results suggest a significant relationship between the costs of debt and integrated reporting quality, when compared to the cost of equity and the weighted average cost of capital. In addition, other variables hold a stronger relationship with integrated reporting quality, such as the ability of a firm to produce a standalone CSR report, as well as the firm’s equity market-to-book ratio and a firm’s size
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    The role of design houses in the evolution of integrated reporting
    (2022) Wadee, Zubair
    Integrated reporting matters. South African companies are at the forefront of integrated reporting (R. G. Eccles, M. P. Krzus, & C. Solano, A, 2019) due to many factors, including the role played by the governance framework King IV, the work of the Integrated Reporting Committee of South Africa (IRCSA) and South Africa's experience with different types of social and environmental reporting (Jill Atkins et al., 2020; De Villiers, Rinaldi, & Unerman, 2014). It is within this context that listed companies face isomorphic pressures in the preparation of the integrated report in search of legitimacy. In response to these external pressures, which are considered to be an external jolt, companies must respond. Their responses are driven by management’s attitude to the change and result in outcomes ranging from inertia where the entity does not change to evolution where there are changes to the systems, processes and culture of the organisation. This study finds that a mechanism by which management of companies that prepare integrated reports respond to the external pressure is by using design houses. The study finds that design houses act as a vector. The design house thus enables management to continue with 'business as usual' thus becoming immune to the external jolt and resulting in very little to no change within the organisation, or the design house may play a role in facilitating evolutionary change, with a range of other outcomes in between these two points.
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    An analysis of the section level of detail and disclosure of the six capitals in the strategy, risk and performance sections of the integrated reports of top JSE-listed companies
    (2022) Steenkamp, Amy Catherine Regina
    Purpose: This thesis assesses the level of detail of the strategy, risk and performance sections of 240 integrated reports of 30 companies selected from the top 100 JSE-listed companies by market capitalisation on 09 June 2021 for their 2013 to 2020 financial years. It also assesses whether the six capitals of the IIRC’s Framework are addressed in these sections. Method: A disclosure checklist was developed interpretively, based on relevant literature. Content analysis was used to evaluate the level of detail of the respective sections of the sampled companies’ integrated reports and whether the six capitals are addressed in these sections. Descriptive statistical tools, Kruskal-Wallis H tests, Jonckheere-Terpstra tests, and correlation tests (Spearman’s rho and Kendall’s tau-b), were performed to analyse the data and determine if there are significant associations between year, industry, market capitalisation (grouping variables), and level of detail and capital presence (dependent variables). Key findings: There was a great level of detail in the strategy, risk and performance sections of the integrated reports. In the respective sections, the companies mentioned their strategy, risk and performance factors. They provided descriptions of these factors and/or provided company specific results on the factors mentioned. Significant positive associations were evident between level of detail and the grouping variables. The six capitals were often included in the sections. On average, companies included between 4 and 6 capitals in all integrated report sections. The presence of financial capital and social and relationship capital were prominent in the various sections. The presence of natural capital was the least referenced of the six capitals. Significant differences were evident between the grouping variables and various capitals in the sections. Contribution: This paper is an exploratory study which assesses the level of detail and capital presence in specific integrated reporting sections. The longitudinal nature of the study (which coincides with the publication of the IIRC’s Framework (2013) and King IV (2016)) can add to the limited number of studies on integrated thinking and reporting. A basic level of detail analysis of the strategy, risk and performance sections may be useful to understand content which firms are relaying about their value creation processes. This paper can assist stakeholders in better understanding integrated thinking through the IIRC’s six-capital model.
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    An analysis of Circular Economy disclosures and the impact on Integrated Reporting
    (2022) Mahadew, Kashmira
    The impact of global markets on the natural environment has resulted in a rapid depletion of resources. The circular economy (CE) model is a sustainable business model which aims to stay within the limits of the planet and reduce the impact on the environment by decreasing excessive resource use, minimizing waste, and converting end-of-life goods into resources for further use. This research aims to investigate disclosures by Johannesburg Stock Exchange (JSE) listed companies by analysing the type of investments in developing and achieving a CE, the quality and nature of disclosures on a CE, and the related impact on the six capitals. A content analysis method was used to analyse a sample of integrated reports of JSE listed companies. Correlation coefficients were used to evaluate the relationships between the CE disclosures and 21 identified elements, and the Kruskal-Wallis and Jonckheere-Terpstra tests were used to evaluate the significant differences among industries, company size, and year when analysing the CE disclosures. This paper finds that a significant number of CE disclosures are located in the value creation and business model location of the integrated reports, the quality and type of investments to achieve a CE model tending to differ across different industries, company sizes, and year. The research revealed that CE disclosures are becoming more prominent in South Africa. The quality of reporting is moderately low. Industries which have a higher environmental impact and have extensive physical infrastructure tend to have better disclosure on their investments in the six capitals than service-driven industries. Both the quantity and quality of disclosures are better for larger companies. The research finds that companies are increasingly investing in research and development, and partnerships with research groups, think tanks and other third parties to drive their CE adoption. This paper contributes to both corporate reporting and the CE concept by evaluating the link between a CE model and integrated reporting and the impact which CE disclosures have on the six capitals of a company
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    The tone of business model disclosure: an analysis of integrated reports of public sector entities
    (2021) Mahomed, Suhail
    Orientation: State owned entities have recently come under scrutiny because of constant failure to ensure profitability and for corruption scandals. Examples of this can be seen through state capture corruption scandals which have been brought forward through to the Zondo Commission. Such corruption scandals have placed doubt in the minds of the public regarding the validity of integrated reports. This has called for increased accountability within the public sector. One solution to bringing about this accountability is through integrated reporting. Within the integrated report, the business model disclosure is qualitative disclosure describing how entities create value by utilising resources which is a useful component within the integrated report. However, the use of impression management strategies in business model disclosure in order to promote an entity’s corporate image has been raised as a concern by prior researchers. More specifically, the use of thematic manipulation has been extensively researched. Research purpose: The purpose of this study is to establish whether entities within the public sector adopt impression management strategies by manipulating the tone of the business model disclosure provided in their integrated reports. Significance of study: Integrated reports contain narrative disclosures. These disclosures are subject to possible hidden manipulation and may influence users’ decisions. In assessing whether impression management techniques are used, narrative disclosure analysis have given an indication whether these business models and more so the integrated reports themselves convey true information. The study contributes to the effective disclosure of business models within a South African context. Public regulatory bodies may find this study useful in assessing whether public entities concisely disclose business models. Overview of research method: The study made use of a quantitative approach in terms of research methodology even though the data was qualitative in nature. Each sentence within the business model disclosure of public sector entities was analysed. More specifically, only schedule 2 and 3A public sector entities were observed in this study. The research design consisted of three phases. These being a content analysis, a univariate analysis and a multi-variate analysis. Main findings: This study found that majority of disclosure in terms of business models were found to be using a non-positive tone which indicates that is no manipulation of tone through the adoption of impression management techniques. This was in line with a study performed in the private sector in a South African context (Moloto, 2019). Furthermore, the results found that there is an association between tone and other categories of disclosure (i.e. type, time and topic). Finally, when testing tone in relation to a set of disclosure variables relating to corporate governance (number of board of directors), performance (declining return on equity) and disclosure verifiability (positive tone being associated with qualitative and forward looking disclosure), it was found that there were significant statistical relationships between a more positive tone and all such disclosure variables