Business reporting: how transparency becomes a justification mechanism

This paper contributes to the discussion of the present status and future scenarios of business reporting by conducting a thorough review and analysis of state-of-the-art of the authoritative business reporting literature and also a set of specifically formulated models for voluntary reporting. By analyzing the chosen business reporting models with respect to 14 generally acknowledged themes, the paper contributes to the understanding of the myriad of arguments that are mobilized in the debate on the future of corporate reporting. Based on a qualitative content analysis of nine purposively selected business reporting models, the analysis illuminates and characterizes the argumentation for supplementary reporting. The paper posits some interesting points in connection with the motives for improving corporate reporting practices. A dichotomy between reliability through normalization and relevance through linking disclosure to value creation is emphasized. As transparency is in the eye of the beholder, the process of developing corporate reporting practices must be concerned with reaching a common understanding and agreement between producers and consumers of such disclosures. Transparency is perceived as both a key objective and outcome of comprehensive business reporting. However, the concept of transparency seems to be an empty concept merely constituting a justification mechanism for actual behaviour, i.e. that disclosure instead is driven by the signalling value for the individual company of disclosing a piece of voluntary information.