Assuring the chairperson’s statement in the integrated report An auditing framework to curb the use of impression management in corporate reporting

Masibulele Phesa, Mabutho Sibanda and Zamanguni Hariatah Gumede
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Masibulele Phesa: University of Kwazulu-Natal
Mabutho Sibanda: University of Kwazulu-Natal
Zamanguni Hariatah Gumede: University of Kwazulu-Natal

International Journal of Research in Business and Social Science (2147-4478), 2024, vol. 13, issue 5, 663-683

Abstract: The study aimed to design the auditing framework for the audit of the chairperson’s statement. The chairperson’s statement is one of the most read narrative disclosure statements in the integrated report. Non-financial information has become twice as important as financial information yet, it is not required by the International Financial Reporting Standard (IFRS). The chairperson’s statement is not audited and this leads to the use of impression management tactics. This study answers the call from different scholars who have called upon the audit of the chairperson’s statement to curve the use of impression management tactics. The mixed method is used for data analysis. Perception of external auditors is sought through the Likert scale and interviews to ensure triangulation. Descriptive statistics, correlation, and thematic analysis are used to analyze the data. The study found that auditors are aware of the existing concern about the use of impression management in the chairperson’s statement. In this regard, an audit of the chairperson’s statement is deemed appropriate and long overdue. External auditors are the most suitable experts to audit the chairperson’s statement and issue reasonable assurance. Secondly, auditors believe that the reliability of the chairperson’s statement is crucial and to ensure credibility, the company must have strong internal control, and report accurate and complete information in the chairperson’s statement. The auditing framework is designed and shown through an integrative conceptual model. The results are consistent with previous studies that emphasise the need for the assurance of non-financial information in the integrated report. This study triggers debates amongst accounting firms, standard setters, and policymakers on the adoption of the auditing framework for the chairperson’s statement to give assurance to the users. The study contributes to the body of knowledge with an auditing framework to audit the chairperson’s statement, the first of its kind. Lastly, the study adds to the developing debate on the assurance of narrative disclosure parts of the integrated report. Key Words:Auditing framework, Chairperson’s statement, Impression Management, Narrative disclosure, Integrative conceptual model

Date: 2024
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