Understanding reporting boundaries in annual reports: a conceptual framework

Abstract

PurposeThe purpose of this paper is to enhance conceptual understanding of reporting boundaries in corporate annual reports by developing a conceptual framework of the rules and principles, referred to here as dimensions, underlying boundaries. A total of nine contemporary regulations/guidelines are compared in terms of the boundary dimensions identified to illustrate similarities and differences in boundary concepts.Design/methodology/approachTo develop a conceptual framework of reporting boundary dimensions, academic and industry literature were analysed to identify boundary dimensions. Thereafter, nine contemporary regulations/guidelines were compared in terms of these dimensions. A qualitative approach was taken including document analysis and content analysis.FindingsA total of 10 key boundary dimensions were identified through analysis of academic and industry literature. Each dimension represents a continuum along which regulations/guidelines can position themselves. Taken together, the 10 dimensions provide a comprehensive description of the chosen boundary concept.Originality/valueThe paper contributes to accounting theory by providing a holistic conceptual framework of dimensions relating to reporting boundaries, thus answering calls for more conceptual development of the boundary construct. The conceptual framework and comparison of contemporary regulations/guidelines adds to scarce literature considering financial and non-financial boundaries simultaneously, which is relevant for annual reports. From a practical perspective, the paper brings renewed visibility to boundaries with implications for preparers, users, standard setters and auditors of annual reports.