Integrated Reporting and Value Relevance: The Moderating Role of Business Ethics

Abstract

The research explores the importance of business ethics in improving the link between integrated reporting and value relevance. In particular, it states that integrated reporting improves the corporate transparency by means of presenting a consistent picture of value creation based on financial and nonfinancial factors. In its turn, the efficiency of this type of reporting depends on the ethical background and level of transparency of the disclosed information. Using the stakeholder and signaling theories, the author proves that business ethics increases the stakeholders' trust and credibility of disclosure and, therefore, helps to make better investment decisions.