ACCA Recommends Integrated Reporting for Firms
A study conducted by the Association of the Charted Certified Accountants has revealed that organizations that follow the integrated style of reporting end up disclosing extra environmental, ethical and social information in the corporate reports prepared by them. The report also found that such companies take more account of the needs of the stakeholders.
ACCA has issued a paper consisting of discussions on “Reporting pre and post King III: what’s the difference?”
Through this paper, ACCA has summarized the findings of academic related report as far as the impact of integrated reporting in South Africa (where IR has been made compulsory since 2010-11) is concerned.
ACCA researchers analyzed as many as ten annual reports of different companies of South Africa, both after and before the introduction of integrated reporting. Based on their analysis they came to the conclusion that additional environmental, ethical and social information were reported in the 2010-11 annual reports in comparison to the reports that were issued before integrated reporting became compulsory.
In the reports issued before IR, such information is restricted to specified sections instead of being a part of the entire report.
Rachel Jackson of ACCA pointed out that there are a lot of differences between now and then. He also said that the entities that were examined have come to realize that issues that are not related to finance have implications on the finances of their companies. He also stated that there is a massive change in the manner in which sustainability related issues are now being linked to risk and materiality.
The report further indicated that the adoption of integrated reporting can be a huge challenge for the International Integrated Reporting Council. According to Jackson IIRC has been focusing on issuing integrated reporting for the purpose of making decision as well as for shareholders. IIRC has clarified that it paying more attention towards shareholders.
Association of the Charted Certified Accountants has included several recommendations in their list in order to develop integrated reporting further. These recommendations revolve around offering concise information for avoiding repetition as well as for including additional feedback after consulting stakeholders and involving academics to discuss the future of integrated reporting.