Integrated Reporting: What Is Happening So Far

by Nick Main and Eric Hespenheide, Deloitte Review, 14 June 2012

0 comments

Facebook

Digg

Twitter

topics:
Accounting and Regulations

tags:
auditing investor relations risk management

Integrated reporting as defined by the International Integrated Reporting Committee aims to incorporate everything from strategy to risk management, from financial reporting to the inclusion of other capitals (think societal and environmental impacts). It aspires to meet the needs of a wider group of stakeholders—e.g., investors, employees and non-governmental organizations (NGOs).

And it intends to interlink these elements in a way that makes their interdependencies clear. Everyone in an organization, not just the accountants, is likely to be touched by integrated reporting.

The potential importance extends beyond a reconstitution of traditional corporate reports. Corporate reports—whose growing sophistication and range have been a reflection of the development of the global economy over the past two centuries—are in some sense the rulebook that investors and society at large use to “keep score.”

Change the rulebook and you will almost certainly change the game. The movement toward integrated reporting potentially represents the most significant change to the rulebook that we will have seen in years.

The Basic Idea

The two organizations at the forefront of the development of new ideas regarding integrated reporting are:

The Integrated Reporting Committee of South Africa (IRCSA), which, under the chairmanship of Professor Mervyn King, produced a report built on a pronouncement on corporate governance in South Africa (King III). It proposed that integrated reports become the preferred form of corporate reporting in the country.

The International Integrated Reporting Committee (IIRC), which was formed in 2010 under the aegis of the Prince of Wales Accounting for Sustainability Project and the Global Reporting Initiative. In addition to business executives and investors, representatives from the major accounting bodies, standards setters and security regulators sit on this committee.

To help generate discussion to guide the development of the International Integrated Reporting Framework, the IIRC has published in a discussion paper a series of principles and content elements for preparing an integrated report.

The elements of an integrated report as suggested by the IIRC in the discussion paper are:

Organizational overview and business model: What does the organization do, and how does it create and sustain value in the short, medium and long term?

Operating context, including risks and opportunities: What are the circumstances under which the organization operates, including the key resources and relationships on which it depends and the key risks and opportunities that it faces?

Strategic objectives and strategies to achieve those objectives: Where does the organization want to go, and how is it going to get there?

Comment on this article

Your name: *

E-mail: *

The content of this field is kept private and will not be shown publicly.

Homepage:

Comment: *

Web page addresses and e-mail addresses turn into links automatically.
Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd> <a> <p> <span> <div> <h1> <h2> <h3> <h4> <h5> <h6> <img> <img /> <map> <area> <hr> <br> <br /> <ul> <ol> <li> <dl> <dt> <dd> <table> <tr> <td> <em> <b> <u> <i> <strong> <font> <del> <ins> <sub> <sup> <quote> <blockquote> <pre> <address> <code> <cite> <embed> <object> <strike> <caption>
Lines and paragraphs break automatically.
Use  to create page breaks.

More information about formatting options

Verification Code

This question is for testing whether you are a human visitor and to prevent automated spam submissions.

What is the fourth word in the phrase "edocoje ucezule lino pajiyu yumus"?: *

Accounting and Regulations

CFO innovation Asia Accounting and Regulation the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Accounting Regulation, IFRS, US GAAP, Tax, investor relations, corporate governance, Corporate Law, Financial Regulators, Internal Audit, Audit, Corporate Law.

Auditing, Investor Relations, Law and Compliance, Tax

Finance and Banking

CFO innovation Asia, Finance and Banking the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Corporate Finance, trade finance, treasury and risk management, capital expenditure, Banking, mergers and acquisitions

Cash and Liquidity Management, Corporate Finance, Insurance, Treasury Management

Management

CFO innovation Asia the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Finance Management, Corporate Governance, Human Resource Management, Compensation and Benefits, Mergers and Acquisitions, Professional Development, Corporate Real Estate, Risk Management, Budgeting and Forecasting, Business Process Management, Business Process Reengineering, Outsourcing.

Budgeting and Planning, Business Expense Management, Human Capital Management, Outsourcing and Shared Services, Risk Management

Metrics

Corporates, Financial Services

Technology

CFO innovation Asia Technology the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Finance Systems, Business Intelligence, EPR, Accounting software, CRM, Cloud Computing, Telecommunications, Business Process Outsourcing, Business Process Management Software.

Business Intelligence, Enterprise Software and Systems, Financial Systems, Security