DOES EFFICIENCY INCREASE THE APPLICATION OF INTEGRATED REPORTING?

Continuous stakeholder demands for more detailed and transparent reporting have led to the development of a new reporting framework. That is the so-called International Integrated Reporting Framework according to which companies report on financial and non-financial aspects of business operations. More importantly, they show the way in which value is created through the established business model in the short, medium, and long term. Since it is still considered a new tool for socially responsible reporting, the question arises of its recognizability and level of its implementation and impact on business operations. Therefore, this paper analytically deals with the overall concept of integrated reporting and its connection with the principle of efficiency as the basis of the value-making process. Therefore, the main objective of the paper was to investigate the current application of the concept of integrated reporting in companies of the Republic of Croatia and the Republic of Slovenia, in the period from 2011 to 2016, and to determine whether a greater degree of business efficiency influences the implementation of integrated reporting methods and socially responsible business operations. The method of online research, descriptive statistics, and non-parametric method of hypothesis testing were used. Although the results showed a low level of application of the International Integrated Reporting Framework, the empirical part shows that a higher level of business efficiency encourages companies to conduct more socially responsible business operations through the presentation of economic, environmental, and social aspects of business operations.