Integrated Reporting in the Public Sector: Theoretical Foundations and Determinants of Quality

ABSTRACT Integrated reporting (IR) has gained attention as the IFRS Foundation promotes its use through the International Integrated Reporting Council framework (IIRF). Public sector (PS) organizations, as key drivers of economic, social and environmental sustainability, are increasingly adopting IR to enhance transparency and accountability. This study examines the theoretical foundations of IR adoption in the PS and evaluates factors contributing to higher compliance with the IIRF. Through content analysis of 62 PS entities worldwide, we find that adherence to Global Reporting Initiative (GRI) standards, sustainable development goals (SDG) reporting and external assurance significantly enhance IR quality. Our findings confirm institutional isomorphism as the dominant theoretical explanation for IR adoption in the PS, as organizations mimic best practices from peers rather than being driven by legitimacy or stakeholder pressures. This study contributes to the literature by providing a larger and more comprehensive dataset than previous studies, offering insights into the evolving role of IR in the PS.