Integrated reporting and earnings quality: An analysis in the Brazilian context

Purpose - This study aims to analyze the relationship between the adoption of Integrated Reporting and earnings quality in the Brazilian context. Theoretical framework - Earnings quality may signal a more sustainable, ethical and transparent behavior of company management. Therefore, it can serve as an indicator of changes in management practices associated with the implementation of Integrated Thinking. Design/methodology/approach - The study employed a panel data model, considering a sample of 630 observations from non-financial Brazilian companies from 2017 to 2020. The data for companies adopting Integrated Reporting were manually collected from the companies' corporate disclosures. Findings - The analysis of Integrated Reporting quality revealed a significant relationship with earnings quality. This may indicate that these companies are making internal changes in terms of information transparency, and it is also expected that they are under less pressure to deliver short-term results. Practical & social implications of research - The research findings are relevant for shareholders, as they highlight how integration can drive internal changes within the company. For regulators and society, it provides an opportunity to anticipate the effects of adopting ISSB standards, as this body has incorporated the IIRC. Originality/value - It allows for indirect observation of changes in company management and managerial opportunism. Brazil represents a relevant context due to the publication of CPC 09 and the high number of Integrated Reporting adopters.