Critical considerations on the association between external assurance of non-financial information and materiality disclosure quality in an Integrated Report context

The chapter provides a comprehensive discussion of materiality and assurance in an Integrated Report (IR) context. It briefly presents the main characters of IR, the criticalities and strengths of IR assurance in increasing stakeholders’ trust and the significance of a materiality determination process. We discuss the importance of materiality judgments for non-financial information (NFI) in the IR context and how these judgments could affect the reliability of the reported NFI disclosures, thus affecting credibility on reported information and the trust of stakeholders towards disclosing companies. The chapter concludes focusing on the link between assurance and materiality in the IR context. Assurance enhances the credibility of financial and NFI disclosed in IR, but this effect is much stronger when the quality of assurance improves, that is when an accounting firm provides the assurance and when the assurance level is reasonable rather than limited. Actually, there are very few cases of IR subjected to reasonable assurance and there are no recognized standards for IR assurance, but we believe that the possibility of adopting IR as non-financial declaration to assure could represent an opportunity both for the accounting association to define a set of rules and for assurers to create a competitive market.