Abstract:
The study examines the impact of integrated reporting disclosure on the value relevance of accounting information for listed firms in Sri Lanka's diversified financial sector. This study utilizes data from 23 listed firms in Sri Lanka's diversified financial industry for the period from 2017 to 2023. IR is the independent variable of the study, while the value relevance of accounting information is the dependent variable. The signaling theory provides the theoretical basis for this study. The study utilized year-wise statistics of the IR score and the results of correlation and regression analysis to draw its conclusions. The research findings reveal an increasing trend in terms of IR disclosures by listed firms in Sri Lanka's diversified financial industry. Additionally, we found a statistically significant positive impact on the value relevance of accounting information due to IR disclosures. This study offers organizations and investors valuable insights into the benefits of adopting IR. It also provides policymakers with unique insights for undertaking policy initiatives on IR. As the study was conducted in the Sri Lankan context, where IR is a voluntary practice, future studies can consider firms across several countries with different reporting legislations. It is recommended to analyze the impact of each content element on the firm value to reveal more meaningful information in future studies. Finally, future researchers are encouraged to employ a qualitative approach to validate the findings of this study.
