Purpose This paper aims to investigate materiality judgement providing insights, critiques and future research paths in light of the open debate on the role of materiality in corporate financial disclosure, highlighting potential connections and implications with sustainability and intellectual capital (IC) reporting. Design/methodology/approach The research presents an overview of the analysis of financial materiality, including new stimuli from recent studies and regulatory requirements for financial and non-financial reporting. Accordingly, this study used a systematic literature review (SLR) based on a combination of content, text and bibliometric analysis of materiality in accounting research studies, collecting data from the Scopus database as one of the most relevant repositories. Findings The SLR identified four relevant research trends, concerning: (1) the relevance of materiality principles in corporate disclosure; (2) financial reporting practices and materiality; (3) theories and approaches in defining financial materiality and (4) the existence of quantitative and qualitative thresholds in the materiality judgement. Research limitations/implications The results provide theoretical and practical implications when comprehending the development of the concept of financial materiality in financial statements and whether they can be appropriate in reporting IC as well. We identified future research paths. Practical implications From a practical perspective, this study is useful for companies implementing financial materiality based on stakeholder engagement and improving their transparency in financial and non-financial reporting practices. Social implications The research investigates if the process for assessing materiality is in line with the expectations of all stakeholders involved in financial and non-financial reporting. Originality/value This research is the first to investigate the scientific basis and applicability of the concept of financial materiality to sustainability and IC reporting.

Does financial materiality judgement matter in reporting intellectual capital? A systematic literature review and future research trends

Francesco Paolone;Riccardo Tiscini
2024-01-01

Abstract

Purpose This paper aims to investigate materiality judgement providing insights, critiques and future research paths in light of the open debate on the role of materiality in corporate financial disclosure, highlighting potential connections and implications with sustainability and intellectual capital (IC) reporting. Design/methodology/approach The research presents an overview of the analysis of financial materiality, including new stimuli from recent studies and regulatory requirements for financial and non-financial reporting. Accordingly, this study used a systematic literature review (SLR) based on a combination of content, text and bibliometric analysis of materiality in accounting research studies, collecting data from the Scopus database as one of the most relevant repositories. Findings The SLR identified four relevant research trends, concerning: (1) the relevance of materiality principles in corporate disclosure; (2) financial reporting practices and materiality; (3) theories and approaches in defining financial materiality and (4) the existence of quantitative and qualitative thresholds in the materiality judgement. Research limitations/implications The results provide theoretical and practical implications when comprehending the development of the concept of financial materiality in financial statements and whether they can be appropriate in reporting IC as well. We identified future research paths. Practical implications From a practical perspective, this study is useful for companies implementing financial materiality based on stakeholder engagement and improving their transparency in financial and non-financial reporting practices. Social implications The research investigates if the process for assessing materiality is in line with the expectations of all stakeholders involved in financial and non-financial reporting. Originality/value This research is the first to investigate the scientific basis and applicability of the concept of financial materiality to sustainability and IC reporting.
2024
Financial materiality, Sustainability reporting, Intellectual capital reporting, Systematic literature review
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/20.500.12606/15389
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