Reading: User Preference for Information Contained in the Environmental Reporting in Sri Lanka


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User Preference for Information Contained in the Environmental Reporting in Sri Lanka


D.M.M.B. Dissanayake ,

Uzabase Inc., Access Towers II, 278/4, Union Place, Colombo 02, LK
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E.M.A.S.B. Ekanayake

Department of Business Finance, Faculty of Management, University of Peradeniya, LK
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As a response to the mounting public pressure for companies to be accountable for their environmental performance, they have increased the volume and the scope of their environmental reporting in the recent past. However, two interconnected problems have still been visible. First, there is no commonly accepted reporting framework for environmental reporting in Sri Lanka. Thus, companies tend to report on their own. Second, most of environmental reports appear to prepare without giving due attention on the users’ needs. This study aims to investigate users’ preferences which, if included in environmental reports, enrich the perceived decision usefulness. More specifically, it examines the user preferences on environmental reporting of the companies listed in the Colombo Stock Exchange (CSE) in Sri Lanka. For this purpose, the study borrowed the conceptual framework for financial reporting developed by the International Accounting Standards Board that discusses two fundamental (i.e., relevance and faithful representation) and four enhancing (i.e. comparability, verifiability, timeliness, understandability) qualitative characteristics fulfilling the information needs of the users.

The study followed survey method and on online questionnaire has been created allowing the investors in the CSE to respond. 48 usable questionnaires were received. The descriptive and inferential statistics were used to analyse the responses of the users.

The results show that the users who read environmental reports prefer quick and convenient reading techniques. Further, they do not read reports that are perceived to be irrelevant or faithfully not represented. Furthermore, the users need such reports to be shown in a balanced manner containing both positive and negative information, and to be provided with future oriented information identifying significant environmental issues and demonstrating top management’s commitment for those issues.

It can be concluded that users prefer information that possesses two fundamental qualitative characteristics to be presented in a convenient, readily accessible and balanced manner. Companies shall recognize such users’ preferences in future environmental reporting while policy makers and regulatory bodies shall ensure the decision usefulness of environmental reporting by put in place appropriate disclosure standards and regulations. The study, however, conducted with a smaller sample, limiting the generalizability of the findings. Future research may be conducted using a large sample and with more user groups.

How to Cite: Dissanayake, D.M.M.B. and Ekanayake, E.M.A.S.B., 2018. User Preference for Information Contained in the Environmental Reporting in Sri Lanka. Peradeniya Management Review, 1(1), pp.67–88. DOI:
Published on 01 Jun 2018.
Peer Reviewed


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