Management Accounting Management - Assignment

Running Head: MANAGEMENT ACCOUNTING
Management Accounting
Name of the Student:
Name of the University:
Author Note:

1
MANAGEMENT ACCOUNTING
Introduction
Integrated reporting is a process of communicating the information related to the
organization consisting of strategy, governance, performance, short, medium and long term
values. It represents the company’s performance in both the non-financial and financial matters
and provides data that helps an organization in decision making for both short and long term. Its
main objective is to provide capital decision-making information while helping to make financial
and sustainability report. It helps the providers of the financial capital to explain them how to
create organizational value over the time. Directly it benefits the stakeholders who are interested
over the companies (Adams 2015).
In 2013, the International Integrated Reporting Council (IIRC) released this framework
that could help in establishing the principles and concept that can govern the content of the
integrated report. It was put to use in 25 countries for trial before implementing it worldwide.
This framework helps in setting the benchmark of the organization for creating strategy,
governance, performance and goodwill. It is made for the private sectors but both the public and
non-profit making organization can also adopt this framework. Integrated reporting framework is
used to speed-up the adoption of the integrated reporting in the worldwide. It applies the
principle and concepts that increase the efficiency of the reporting process while adopting
integrated thinking. It is also a process of reducing the internal duplication by which the quality
of information has been improved. With the help of quality information, providers of the
financial statement can take more efficient and productive decision (Atkins and Maroun 2015).

2
MANAGEMENT ACCOUNTING
Principle
The International integrated reporting council has specified the principles rather than
specifying the disclosures required and standard measurement. It helps the companies to make its
own report in a proper way rather than preparing through a checklist approach. These changes
enable the companies to communicate their value created. IFRS provided the platform where the
business values can be created and protected. Integrated reporting have replaced most of the
reporting forms as it will alone produces and explain valuable information. It assists to provide
assistance to the company resources which is known as the capital. Therefore, the main objective
of this framework is to set up the principles that govern the report and explains the fundamental
concept. This report must be reliable, concise and complete as it includes the material matters
which is both positively and negatively balanced. Integrated reporting has some component
which is essential for making it as a framework. Like organizational overview toward the
external environment, governance structure ability to create values, business models,
opportunities and risk that can affect the company’s goodwill, resource allocation, challenges
facing by the company and the presentation needed to determine what are to included or not
(Dumay et al., 2016).
Importance
Corporate reporting was not very complex but with the increase in the rules, provisions
and complexity of the annual report that led to the increase in need of some other reporting
format. IIRC issued new reporting format to solve this problems by promoting the efficiency and
decision-making.
In addition to the improvement of the internal management, internal reporting framework
has some of the benefits like it help to create trust with the customers, suppliers and the society.

3
MANAGEMENT ACCOUNTING
It helps to increase the importance of the government agencies and other non-profit making
organization. It helps to get the maximum value during transfer and sell of the business by
providing the better basis of valuation. Sometime investors want to know the capital that has
been deployed before based on which business plan has been made (Flower 2015).
Need for adopting integrated reporting
With the increase in need of sustainability and transparency of financial statement has
increased the rigidity for both the stakeholders and management. Stakeholders have always been
the eagerness to know the business processes that are being performed while the potential risk
that are arising during the process. Stakeholders always want to know the business activities of
the company and the financial position before they make any investment. So to be attractive in
this competitive business companies has to adopt the new reporting format by which they can
meet the stakeholders demand. Financial and non-financial information are disclosed so that all
the stakeholders’ requirement can be full filled (Lai, Melloni and Stacchezzini 2016).
Integrated reporting shows the future picture of the company while linking the financial
performance and the non-financial performance. It is the most attractive or effective way to meet
the stakeholders. It brings more transparency in the corporate world by showing the link between
the financial and sustainable performance.
Uses of IR in Public and Private sector
Both public and private sector are delivering service to the economy, social and
environmental. The way how they achieves this are by preparing and continuously doing public
accountability and keeping transparency. Corporate reporting only shows the limited story about
the impact that the public or private organization are having. So the integrated reporting provides