Click here to download

The level of compliance with the Italian Legislative Decree No. 254/2016 and its determinants: Insights from Italy
Journal Title: FINANCIAL REPORTING 
Author/s: Valter Cantino, Alain Devalle, Simone Fiandrino, Donatella Busso 
Year:  2019 Issue: Language: English 
Pages:  31 Pg. 113-143 FullText PDF:  353 KB
DOI:  10.3280/FR2019-001004
(DOI is like a bar code for intellectual property: to have more infomation:  clicca qui   and here 


The present research explores non-financial mandatory disclosure in Italy in light of the recent Italian Legislative Decree No. 254/2016, which transposes the Directive 2014/95/EU on "the disclosure of non-financial and diversity information". The study pursues a twofold aim: first, it seeks to measure the level of compliance of non-financial information (NFI) with non-financial mandatory disclosure; and second, it seeks to identify which determinants favor higher compliance levels in the first year of the regulatory adequacy. To these ends, the study examines the non-financial 2017 statements of 50 listed Italian companies to test by means of a NFI Disclosure Score three determinants that could explain the level of compliance. The NFI Disclosure Score was set at 52.58%. Moreover, findings suggest that the type of reporting channels (stand-alone report or disclosure included in the Annual Report), the Guidelines Reporting Initiative (GRI) options chosen by the companies, and the presence of the Corporate Social Responsibility (CSR) Committee within the board all affect compliance levels. This study is one of the first research conducted on mandatory NFI disclosure providing indications for regulators and companies on how to improve NFI disclosure.
Keywords: Non-financial disclosure, mandatory disclosure, non-financial information, Italy, Directive 2014/95/EU.
Jel Code: M14, M41

  1. (AICPA), A. I. of C. P. A. (1994), Jenkins Committee. Improving business reporting: A customer focus.
  2. Baboukardos D. (2018), The valuation relevance of environmental performance revisited: The moderating role of environmental provisions, British Accounting Review, 50(1), pp. 32-47.
  3. Beck C., Dumay J. and Frost G. (2017), In Pursuit of a ‘Single Source of Truth’: from Threatened Legitimacy to Integrated Reporting, Journal of Business Ethics, 141(1), pp. 191-205.
  4. Bini L., Dainelli F. and Giunta F. (2017), Is a loosely specified regulatory intervention effective in disciplining management commentary? The case of performance indicator disclosure, Journal of Management and Governance, 21(1), pp. 63-91.
  5. Brammer S. and Pavelin S. (2006), Voluntary environmental disclosures by large UK companies, Journal of Business Finance and Accounting, 33(7-8), pp. 1168-1188.
  6. Buhr N., Gray R. and Milne M. (2014), Histories, rationales, voluntary standards and future prospects for sustainability reporting: CSR, GRI, IIRC and beyond, in Sustainability accounting and accountability (pp. 69-89). Routledge.
  7. Cahan S.F., De Villiers C., Jeter D.C., Naiker V. and Van Staden C.J. (2016), Are CSR Disclosures Value Relevant? Cross-Country Evidence, European Accounting Review, 25(3), pp. 579-611., 10.1080/09638180.2015.1064009DOI: 10.1080/09638180.2015.1064009
  8. Chelli M., Durocher S. and Fortin A. (2018), Normativity in Environmental Reporting: A Comparison of Three Regimes, Journal of Business Ethics, 149(2), pp. 285-311.
  9. Cho C.H., Laine M., Roberts R.W. and Rodrigue M. (2015), Organized hypocrisy, organizational façades, and sustainability reporting, Accounting, Organizations and Society, 40, pp. 78-94.
  10. CNDCEC (2008), La relazione sulla gestione - Alcune considerazioni.
  11. Cyert R.M. and March J.G. (1963), A behavioral theory of the firm, Englewood Cliffs, NJ, 2.
  12. De Villiers C. and Alexander D. (2014), The institutionalisation of corporate social responsibility reporting, British Accounting Review, 46(2), pp. 198-212.
  13. De Villiers C. and Marques A. (2016), Corporate social responsibility, country-level predispositions, and the consequences of choosing a level of disclosure, Accounting and Business Research, 46(2), pp. 167-195., 10.1080/00014788.2015.1039476.DOI: 10.1080/00014788.2015.1039476.
  14. Devalle A. and Rizzato F. (2013), The quality of disclosure in the annual report: analysis of different approaches, Cambridge Scholars Publishing-Global Science & Technology Forum (GSTF).
  15. Devalle A., Rizzato F. and Busso D. (2016), Disclosure indexes and compliance with mandatory disclosure – The case of intangible assets in the Italian market, Advances in Accounting, 35, pp. 8-25.
  16. Dhaliwal D.S., Li O.Z., Tsang A. and Yang Y.G. (2011), Voluntary nonfinancial disclosure and the cost of equity capital: The initiation of corporate social responsibility reporting, Accounting Review, 86(1), pp. 59-100., 10.2308/accr.00000005.DOI: 10.2308/accr.00000005.
  17. Dhaliwal D.S., Radhakrishnan S., Tsang A. and Yang Y.G. (2012), Nonfinancial disclosure and analyst forecast accuracy: International evidence on corporate social responsibility disclosure, Accounting Review, 87(3), pp. 723-759.
  18. Dumay J., Bernardi C., Guthrie J. and Demartini P. (2016), Integrated reporting: A structured literature review, Accounting Forum, 40(3), pp. 166-185.
  19. Erkens M., Paugam L. and Stolowy H. (2015), Non-financial information: State of the art and research perspectives based on a bibliometric study, Comptabilité – Contrôle – Audit, 21(3), 15.
  20. European Commission (2015), Consultation Document NON-BINDING GUIDELINES FOR REPORTING OF NON-FINANCIAL INFORMATION BY COMPANIES Disclaimer.
  21. European Commission (2016), Feedback statement on the public consultation on the non-binding guidelines for reporting on non-financial information by companies having taken place from 15 January to 15 April 2016.
  22. European Commission (2017), Guidelines on non-financial reporting (methodology for reporting non-financial information). Official Journal of the European Union, (December 2014), pp. 1-20. -- Retrieved from http://eur-lex.europa.eu/legalcontent/EN/TXT/PDF/?uri=CELEX:52017XC0705(01)&from=EN.
  23. European Parliament. Directive 2003/51/CE, 4 Official Journal of the European Union § (2003).
  24. European Parliament and the Council (2013), Directive 2013/34/EU amending Directive 2006/43/EC and repealing Council Directives 78/660/EEC and 83/349/EEC on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings. Official Journal of the European Union, 2013(June), L 182/19-75.
  25. Fornaciari L. and Pesci C. (2018), Global financial crisis and relevance of GRI disclosure in Italy. Insights from the stakeholder theory and the legitimacy theory, Financial Reporting.
  26. Gao F., Dong Y., Ni C. and Fu R. (2016), Determinants and Economic Consequences of Non-financial Disclosure Quality, European Accounting Review, 25(2), pp. 287-317., 10.1080/09638180.2015.1013049DOI: 10.1080/09638180.2015.1013049
  27. Girella L., Abela M. and Ferrari E.R. (2018), Conceptual shifts in accounting: Transplanting the notion of boundary from financial to non-financial reporting, Financial Reporting.
  28. Global Reporting Initiative (2016), Consolidated set of GRI sustainability reporting standards, -- Retrieved from https://www.globalreporting.org/standards/gristandards-download-center/.
  29. Guidry R.P. and Patten D.M. (2012), Voluntary disclosure theory and financial control variables: An assessment of recent environmental disclosure research, Accounting Forum, 36(2), pp. 81-90.
  30. Halkos G. and Skouloudis A. (2016), Exploring the current status and key determinants of corporate disclosure on climate change: Evidence from the Greek business sector, Environmental Science & Policy, 56, pp. 22-31., 10.1016/j.envsci.2015.10.011.DOI: 10.1016/j.envsci.2015.10.011.
  31. Haller A., Link M. and Groß T. (2017), The Term ‘Non-financial Information’ – A Semantic Analysis of a Key Feature of Current and Future Corporate Reporting, Accounting in Europe, 9480, pp. 1-23., 10.1080/17449480.2017.1374548DOI: 10.1080/17449480.2017.1374548
  32. Haslam C., Tsitsianis N., Andersson T. and Gleadle P. (2015), Accounting for Business Models and Increasing the Visibility of Stakeholders, Journal of Business Models, 3(1), pp. 62-80.
  33. Hess D. (2008), The three pillars of corporate social reporting as new governance regulation: disclosure, dialogue, and development, Business Ethics Quarterly, 18(4), pp. 447-482.
  34. Hummel K. and Schlick C. (2016), The relationship between sustainability performance and sustainability disclosure – Reconciling voluntary disclosure theory and legitimacy theory, Journal of Accounting and Public Policy, 35(5), pp. 455-476.
  35. Ioannou I. and Serafeim G. (2017), The consequences of mandatory corporate sustainability reporting.
  36. Jain T. and Jamali D. (2016), Looking inside the black box: The effect of corporate governance on corporate social responsibility, Corporate Governance: An International Review, 24(3), pp. 253-273.
  37. Kansal M., Joshi M. and Batra G.S. (2014), Determinants of corporate social responsibility disclosures: Evidence from India, Advances in Accounting, 30(1), pp. 217-229.
  38. Lai A., Melloni G. and Stacchezzini R. (2016), Corporate Sustainable Development: Is “Integrated Reporting” a Legitimation Strategy?, Business Strategy and the Environment, 25(3), pp. 165-177.
  39. Lu Y. and Abeysekera I. (2017), What Do Stakeholders Care About? Investigating Corporate Social and Environmental Disclosure in China, Journal of Business Ethics, 144(1), pp. 169-184.
  40. Mahoney S.C., Thorne L., Cecil L. and LaGore W. (2013), A research note on standalone corporate social responsibility reports: Signaling or greenwashing?, Critical Perspectives on Accounting, 24(4-5), pp. 350-359.
  41. Malsch B. (2013), Politicizing the expertise of the accounting industry in the realm of corporate social responsibility, Accounting, Organizations and Society, 38(2), pp. 149-168.
  42. Manes-Rossi F., Tiron-Tudor A., Nicolò G. and Zanellato G. (2018), Ensuring more sustainable reporting in europe using non-financial disclosure-de facto and de jure evidence, Sustainability (Switzerland), 10(4), pp. 7-9.
  43. Maniora J. (2017), Is Integrated Reporting Really the Superior Mechanism for the Integration of Ethics into the Core Business Model? An Empirical Analysis, Journal of Business Ethics, 140(4), pp. 755-786.2874-z.
  44. Marcia A., Maroun W. and Callaghan C. (2015), Value relevance and corporate responsibility reporting in the South African context: An alternate view post King-III, South African Journal of Economic and Management Sciences, 18(4), pp. 500-518.
  45. Martínez-Ferrero J., Garcia-Sanchez I.M. and Cuadrado-Ballesteros B. (2015), Effect of financial reporting quality on sustainability information disclosure, Corporate Social Responsibility and Environmental Management, 22(1), pp. 45-64.
  46. Michelon G., Pilonato S. and Ricceri F. (2015), CSR reporting practices and the quality of disclosure: An empirical analysis, Critical Perspectives on Accounting, 33, pp. 59-78.
  47. Muttakin M.B. and Khan A. (2014), Determinants of corporate social disclosure: Empirical evidence from Bangladesh, Advances in Accounting, 30(1), pp. 168-175.
  48. Nielsen C. and Madsen M.T. (2009), Discourses of transparency in the intellectual capital reporting debate: Moving from generic reporting models to management defined information, Critical Perspectives on Accounting, 20(7), pp. 847-854.
  49. Overland J. (2007), Corporate social responsibility in context: The case for compulsory sustainability disclosure for listed public companies in Australia, Macquarie J. Int’l & Comp. Envtl. L., 4, 1.
  50. Pavlopoulos A., Magnis C. and Iatridis G.E. (2017), Integrated reporting: Is it the last piece of the accounting disclosure puzzle?, Journal of Multinational Financial Management, 41, pp. 23-46.
  51. Peters G.F. and Romi A.M. (2013), J. Account. Public Policy Discretionary compliance with mandatory environmental disclosures: Evidence from SEC filings, Journal of Accounting and Public Policy, 32(4), pp. 213-236.
  52. Qiu Y., Shaukat A. and Tharyan R. (2016), Environmental and social disclosures: Link with corporate financial performance, British Accounting Review, 48(1), pp. 102-116.
  53. Rezaee Z. and Tuo L. (2017), Voluntary disclosure of non-financial information and its association with sustainability performance, Advances in Accounting, 39(May 2016), pp. 47-59.
  54. Schneider T., Michelon G. and Paananen M. (2018), Environmental and Social Matters in Mandatory Corporate Reporting: An Academic Note*, 17(2), pp. 275-305., 10.1111/1911-3838.12173DOI: 10.1111/1911-3838.12173
  55. Skouloudis A., Jones N., Malesios C. and Evangelinos K. (2014), Trends and determinants of corporate non-financial disclosure in Greece, Journal of Cleaner Production, 68, pp. 174-188.
  56. Stolowy H. and Paugam L. (2018), The expansion of non-financial reporting: an exploratory study, Accounting and Business Research, 4788., 10.1080/00014788.2018.1470141DOI: 10.1080/00014788.2018.1470141
  57. Stubbs W. and Higgins C. (2018), Stakeholders’ Perspectives on the Role of Regulatory Reform in Integrated Reporting, Journal of Business Ethics, 147(3), pp. 489-508.
  58. Tschopp D. and Huefner R.J. (2015),. Comparing the Evolution of CSR Reporting to that of Financial Reporting, Journal of Business Ethics, 127(3), pp. 565-577.
  59. Venturelli A., Caputo F., Cosma S., Leopizzi R. and Pizzi S. (2017), Directive 2014/95/EU: Are Italian companies already compliant?, Sustainability (Switzerland), 9(8).
  60. Zadek S. (1998), Balancing Performance, Ethics, and Accountability, Journal of Business Ethics, 17(13), pp. 1421-1442., 10.1023/A:1006095614267DOI: 10.1023/A:1006095614267
  61. Zambon S. and Di Pietra R. (2015), Integrated Reporting: Concepts and Cases that Redefine Corporate Accountability, Financial Reporting, 2(2), pp. 139-149.

Valter Cantino, Alain Devalle, Simone Fiandrino, Donatella Busso, in "FINANCIAL REPORTING" 1/2019, pp. 113-143, DOI:10.3280/FR2019-001004

   

FrancoAngeli is a member of Publishers International Linking Association a not for profit orgasnization wich runs the CrossRef service, enabing links to and from online scholarly content