Integrated reporting and analysts’ earnings forecast error: empirical evidences

The external corporate reporting is currently debated both in professional and academic contexts, given the misalignment between information provided by companies and real information needs from investors and other stakeholders (de Villiers et al., 2017; IIRC, 2017). Such misalignment seems to be reducible by the integrated report (IR), as proposed by the International Integrated Reporting Council (IIRC). Such report, that is already mandatory in some countries, is raising rich interest from scholars and practitioners: several companies around the world are already preparing their IR. Emerging literature on IR and capital markets shows that IR adoption is beneficial to the investment community (Barth et al., 2017; Kim et al., 2017; Zhou et al., 2017). However, capital market benefits are associated with the first adoption of the IR, while there are no evidence about the extension of such benefits over time. The current study tries to address this gap and investigates the usefulness of the IR to durably provide information suitable to reduce analysts’ earnings forecast error in a long run. In other words, the research explores whether the analysts’ attention to the IR is just fashion or if the benefits in transparency are durable.