The Effect of Integrated Report Compliance within the Scope of TFRS on Financial Performance: An Application on High Value-Added Companies in Borsa Istanbul

Abstract

Purpose – Integrated reporting is a form of corporate reporting that consolidates financial and non-financial information of companies into a single document, illustrating how businesses will generate value in the short, medium, and long term, while also detailing the measures taken to safeguard this value. This study aims to ascertain the correlation between the 'integrated report relevance scores' derived from the annual reports of high value-added firms listed on Borsa Istanbul, assessed through content analysis, and their financial performance evaluated via financial and market ratios computed from balance sheet and income statement data using panel data analysis. Design/methodology/approach – the study utilizes the data of 61 high value-added firms that are traded on Borsa Istanbul between 2018 and 2022 and continue their activities uninterruptedly. In the research, panel data analysis method was used to test the relationship between integrated reporting compliance score and financial performance. Findings – In the study, it was determined that the integrated report compliance score has a partial effect on financial performance. In other words, it was determined that the integrated report compliance score has an effect on some of the variables related to financial performance. Discussion – Integrated report compliance scores of companies traded on Borsa Istanbul affect their financial performance. It has been observed that the integrated report scores obtained by the content analysis method of the companies in question affect their profitability rates in particular. Therefore, the transition of companies to integrated reporting will help increase their profitability.