The effect of integrated reporting on financial performance: Implementation in Turkey (2018-2021)

Unforeseen developments in the global business environment have made all organizations feel obliged to follow new business models and processes and respond to information requests from their stakeholders. Before the financial scandals and environmental disasters, it was sufficient for companies to present their basic financial statements to investors. However, these issues have led to transparency about companies and their activities becoming a focal point for all interested parties. Corporate governance, sustainability, stakeholder theory and integrated reporting are concepts that gain importance in this process. A comprehensive financial reporting framework was needed in response to changing market realities and ever-evolving conditions. Such a framework should contribute to strategy development, risk management techniques, and senior management's long-term decision-making, as well as meeting the financial and non-financial information needs of shareholders. Integrated reporting is an important step towards meeting the emerging need for new information by connecting these critical elements. This study was conducted to investigate whether integrated reporting creates a statistically significant difference on financial performance in businesses. Companies that published an integrated report between the years 2018-2021 in Turkey were included in the research. Integrated scorecard scores were calculated to be used in the quality assessment of 53 reports prepared in this time period. In the study, data on return on assets ratio, return on equity ratio, Tobin's Q ratio, Market value / book value, asset and equity growth rates, net profit margin, price / earnings ratio and equity / total assets ratios were determined to measure the financial performance of the enterprises. The effect of the market value/book value, asset and equity growth rates, net profit margin, price/earnings ratio and equity/asset total ratios on the return on assets ratio, return on equity ratio, Tobin's Q ratio of the enterprises included in the scope of the research between the years 2018-2021 is multiple. analyzed using linear regression analysis method. In the study, it was suggested that the integrated report score was positively related to the return on assets ratio, return on equity ratio and Tobin's Q ratio, but a positive relationship could not be determined as a result of the analysis. The results reveal an insignificant relationship and a negative relationship—the effect of ER scores in 2020 on companies' Tobin Q scores—between the variables.