Integrated Reporting Quality and Stakeholder Decision Usefulness: Examining Connectivity, Materiality, Reliability, Strategic Focus, and Information Comparability

Richard Slack

Integrated Reporting Quality and Stakeholder Decision Usefulness: Examining Connectivity, Materiality, Reliability, Strategic Focus, and Information Comparability

Author(s)	Richard Slack
Country	United States
Abstract	Integrated reporting seeks to connect financial and nonfinancial information within a coherent explanation of organizational strategy, governance, performance, resources, relationships, risks, opportunities, and prospects for value creation over time. The usefulness of this reporting approach, however, depends not merely on the publication of an integrated report but on the quality with which information is selected, connected, explained, and communicated. This study develops a simulation-based framework for examining the relationship between integrated reporting quality and stakeholder decision usefulness, focusing on strategic focus, connectivity of information, materiality, reliability and completeness, conciseness, consistency, comparability, and stakeholder relevance. A synthetic dataset representing 420 hypothetical stakeholder evaluations was constructed using seven-point measurement scales. Simulated decision-usefulness scores increased from 3.06 among reports classified as low quality to 3.94 in the lower-middle category, 4.91 in the upper-middle category, and 5.78 among high-quality integrated reports. Multivariable analysis identifies connectivity of information as a particularly influential reporting-quality dimension, followed by materiality, reliability and completeness, comparability, and conciseness. The overall integrated-reporting-quality index shows a strong positive simulated association with stakeholder decision usefulness. The model explains approximately 64.2% of synthetic variation in the dependent variable. The results support the proposition that decision usefulness arises when integrated reports enable stakeholders to understand relationships between strategy, governance, risks, financial performance, nonfinancial drivers, and future value-creation capacity rather than presenting disconnected disclosure categories. The paper contributes an integrated stakeholder-usefulness framework and provides a reproducible basis for subsequent empirical validation using investor experiments, analyst assessments, stakeholder surveys, report-content analysis, or market-based evidence. All quantitative findings are explicitly simulated and should not be interpreted as observations from actual companies or report users.
Keywords	integrated reporting; reporting quality; decision usefulness; stakeholder information; materiality; connectivity; corporate reporting; value creation.
Field	Engineering
Published In	Volume 6, Issue 2, March-April 2025
Published On	2025-03-17

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American Journal of Advanced Multidisciplinary Innovation and Research

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Integrated Reporting Quality and Stakeholder Decision Usefulness: Examining Connectivity, Materiality, Reliability, Strategic Focus, and Information Comparability

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