Effect of Integrated Financial Reporting on the Value of Firms listed at the Nairobi Securities Exchange

Abstract

This study investigated the influence of IFR on the value of  firms listed at the Nairobi Stock Exchange (NSE). The study  used financial  apital reporting, manufactured capital  reporting, intellectual capital reporting, human capital  reporting, social, and environmental  capital reporting as  independent variables, firm size as a moderating variable, and  firm value and dependent variable. The study used  both  primary data and secondary data. The secondary data was  obtained from individual firms’ annual financial reports and  websites  then captured in a data collection sheet. Data were obtained from a total of 64 firms listed at the NSE with data  ranging from January 1,  2016, to December 31, 2020. Multiple  linear regression model was used to test the combined effect on  the dependent variable. The study  found that there was a  positive and significant relationship between financial capital  reporting and the value of firms listed at the  NSE; there was  insignificant relationship between manufactured capital  reporting and value of firms listed at the NSE; intellectual  capital reporting had a positive and significant effect on the  value of firms listed at the NSE; there existed a positive and  significant  relationship between human capital reporting and  the value of firms listed at the NSE; environmental capital  reporting had insignificant  effect on value of firms listed at the  NSE; social capital reporting had insignificant effect on the  value of firms listed at the NSE. The study  further established  that firm size had moderating effect on the relationship between  integrated financial reporting and the value  of companies listed  at the NSE. The study concludes that integrated financial  reporting has a positive relationship with the value of firms  listed at the NSE. The study thus recommended that the  management of firms listed at the NSE should strive to adopt  the various  integrated financial reporting in enhancing the  value of their firms.