Forward-looking Information and Results: Evidence on Integration between Strategic Plans and Annual Reports

This paper develops the concept of disclosure integration and presents an exploratory analysis on the topic looking at connections between forward-looking information (FLI) in strategic plans and historical data in annual reports, focusing on information continuity and comparability. It is based on the idea that integrating FLI with reported results is essential to allow users to interpret corporate disclosures and to have an indication of the likely reliability of future financial forecasts. In other terms, integration is reached when investors are able to verify whether the previously disclosed targets have been hit in documents covering the same topics and items with historical information. To perform this analysis, the paper advances a proposal for an index to measure integration based on the comparison of FLI in strategic plans and in the following annual reports. Additionally, we investigate determinants of disclosure integration. Our findings support the hypotheses that size and performance are significantly associated with the level of disclosure integration,