Value relevance of the E&Y excellence in integrated reporting awards (EYIRA) in South Africa: an empirical investigation

Abstract

This research report examines whether or not the information provided in an integrated reporting ranking is value relevant to market participants. For the purposes of this paper, reference will be made to the Ernst & Young Excellence in Integrated Reporting Awards (EYIRA). The EYIRA is a detailed report released annually, which ranks companies into different categories based on the quality of the integrated reports they publish. In order to determine the value relevance of the information provided in the EYIRA, an event study was performed. Information that is value relevant to market participants will be indicated by the achievement of abnormal returns either on or after the event date. Furthermore an investigation was performed in order to determine whether or not market participants take note of the improvements of companies over the years under study. The results indicate that overall market participants have little to no reaction to the event itself. A minor positive reaction is observed for the companies that have improved over the years however it was not significant enough to conclude that the information provided by the EYIRA adds value to the investor’s decision making process.