Integrated Reporting is holding back Businesses-Findings on a new Report
More competition and lower audit costs are favored by finance chiefs. Most of the businesses are hesitating to adopt integrated reporting with most of them taking an approach of wait and see as per the latest ACCA research. Other senior finance professionals and chief finance officers told ACCA that while they are about to adopt IR, most of them planned to do that in the close future. About 10 % of them said that they did not have the intention of adopting this new model of reporting which entails information that is non financial.
The report from ACCA named ‘Understanding Investors’ that is the fourth and final part of a series of research looking at the financial reporting future determined the finance chief’s views in Ireland and UK. It showed that about 40 % were very active in taking steps of introducing IR in the following years.
Nevertheless, the results from an earlier report in that series that took into account the community investors’ view deduced that 93 % of investors showed support for the integrated reporting concept. Ewan Willars, the policy director of ACCA said that what the research findings are on the face is that the finance profession is not as enthusiastic on it as other investors.
Nevertheless, CFO’s say that they realize the integrated reporting benefits are realizable and not showing the company as sustainability advocate, but that which can assist in aligning the company’s opportunities with its risks. It will see it as a more holistic view of corporate performance drivers and have better relationships adopted with shareholders externally. Those companies that emphasize on long term investment are likely to give a priority to integrated reporting.
Room for Audit Improvement given
As part of the research, ACCA has deeply looked into the auditor company relationship and the Finance chiefs made a highlight of a good relationship with their auditors. They were optimistic that there is still room for making improvements in the little competition in audit market and associated high costs. Of the population, 60% deemed that a lower fee was well anticipated while 47 % were in favour of a bigger competition in the audit market.