Intergraded Reporting Framework

This article assesses the relevance of the Integrated Reporting (IR) framework in the modern corporate world. It explores how IR has influenced control and strategies in an entity's business model, such as strategic control and value creation. The article also discusses the utilization of the IR framework by public and private organizations and how the six capitals under the IR framework might influence the role of strategic management accounting.

ACC303 Advance Management Accounting Major Assignment Question1
ACC303 ADVANCE MANAGEMENT ACCOUNTING MAJOR ASSIGNMENT
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Intergraded Reporting Framework
Introduction
Corporate reporting ought to keep pace with developing world and deals with needs of broad
stockholder’s audience by offering non-financial and financial information having long-run
and short-run focus (Lodh 2018). The latest framework to the corporate reporting known as
the integrated reporting was suggested by IIRC. Basically, the IR is new but is considered a
powerful hint to corporate reporting; enhancing the manner in which firm think, report and
plan stories of their operations. A good number of entities are using the IR in communicating
concise, clear, and integrated stories which demonstrates how all the resources are adding
some value (Moolman, Oberholzer & Steyn 2016). As a result, the paper assesses relevance
of the IR in modern corporate world. It aims to offer clear explanation on whether IR has had
any form of influence on control and tactics on firm’s operational model including strategic
control and value creation. Additionally, the paper highlights as to whether the framework is
utilised by numerous public and private firms in the corporate reporting. Finally, it presents
analysis on how the six capitals under the IR framework might affect role of the strategic
management accounting.
Relevance of IR in Modern Corporate World
IR is viewed as the means of improving financial stability as well as rebuilding trust in the
capital market and their capacity in serving real economy. Therefore, IR is a process
established on an integrated intelligent, which leads to period integrated reporting by an
entity on value creation over specific period (Lodh 2018). Besides, IR is the concise or
precise statement on how firm’s governance, forecasts, performance as well as plan bring
about value establishment in the long-, short- as well as medium-term. This has changed

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corporate reporting process in the modern world. Integrated reporting brings together the
non-financial plus financial measures in a single price of report. Besides, IR displays links or
association amongst the non-financial and financial performance measures (Villegas 2017).
Furthermore, IR offers performance financial information in more integrated manner on
organization’s websites alongside with offering detailed financial info on specific interest to
stockholders.
The framework expands excellence of financial information readily accessible to the financial
capital suppliers in empowering more creative and competent capital allocation. Moreover, it
promotes more effective and consistent technique to corporate reporting that appeals on
diverse reporting aspects as well as communicates wide-range of aspects which materially
impact capacity of a company to create some values. It also boosts stewardship and
responsibility for different forms of capitals as well as promotes their interdependencies
understanding.
IR moves far beyond the silo technique of information reporting and gathering towards more
comprehensive examination and presentation of the firm’s performance and value (Sofian &
Dumitru 2017). In fact, IR is relevant since it offer more holistic view point of an entity
information significant to their business model, strategy as well as capacity to tolerate and
create worth in long-, short- and medium-term. It offer probable benefits like offer greater
transparency of and access to financial information from broader range of both the external
and internal information sources via integrated procedures and standardisation of the
financial information. Besides, IR is relevant since it offer streamlined corporate reporting via
more reuse of the reporting components, collaboration and transparency of the financial
reporting as well as analytical concepts utilised by both the external and internal financial
analysts. It is also relevant since it offer more understandable and relevant financial

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information for the stakeholders and management; hence, enhancing better decision-making
process.
According to Loprevite, Ricca and Rupo (2018), IR framework is important since it
advocates integrated thinking in an entity and mostly focuses on capacity of a company in
creating value. In fact, it points out some of the specific information that requires being
disclosed in integrated report. The framework also provides information linked to wide risk
assessment and probable forthcoming value development, therefore likeable to the resources
suppliers and probable investors (Lodh 2018). Generally, IR changes the way organizations
think holistically regarding their plans and tactics in making informed financial decisions, in
managing chief risk as well as improving their future performance. It enables firms make
better and well-informed non-financial as well as financial decisions like it advances capital
allocation, break down reporting silos and operational reporting and result in enhanced
processes and systems. Fernando et al (2017) highlight that IR might assists firms in
identifying eco-efficiency gains, improving productivity as well as enhancing brand loyalty to
the firms.
Highlights as to Whether the IR Framework is Utilised by Significantly Huge Number
of Private and Public Organisations
A good number of public and private firms are already publishing the IR prior to launch of
the new framework by IIRC. They incorporate several concepts established in the new
framework and clearly demonstrate foundation on how they create some values. According to
Watson (2011), a broad range of entities like GRI and WBCSD has adopted the IR
framework in their corporate report. Besides, IR is gains a lot of tractions very fast in specific
regions across the globe. For example, in many developed regions like Australia, the

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framework is gaining high adoption with a good number of public and private firms
embracing the model. Generally, uptake of the IR framework continues accelerating
moderately across the globe with specific regions of Asia and Europe gaining more traction
quickly (Fernando et al 2017). Presently, various European nations have legislation on the
sustainability reporting. Nonetheless, a good number of the European nations such as
Australia have legislation that force and stimulate disclosure of the sustainable reporting
(Lodh 2018). It is in fat interesting that many firms select IR as the means of complying with
the legislation.
Explanation as To Whether IR Has Had Any Influence on Control and Strategies on
Entity’s Business Model like Strategic Control and Value Creation
IR has had major influences especially on organizations’ strategies and control such as on
their strategic control as well as their value creation (Moolman, Oberholzer & Steyn 2016).
For instance, IR has brought about integrated thinking which has benefited the firms on the
way they handle their operations. Through IR, organizations have had improved financial
performances. Basically, IR has helped make different business reporting relatively more
consistent in their overall techniques across firms and more interconnected with other
components of the narrative and integrated reporting (Villegas 2017). Besides, IR framework
has had significant influence on organization’s strategic control since it offer crucial solution
to ways in which organizational board of directors are urged to act and think.
IR has influenced value creation since it improves on the quality of the information readily
accessible to the shareholders by combining diverse constituent of financial reporting in a
more comprehensible manner hence explain entity’s capacity in creating as well as sustaining
value. From the IR framework, value is generally formed by bring into line the strategies

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with the internal resources like external resources and financial capital like the environmental
services as well as access to the public infrastructure (Lodh 2018). For example IR identify
all resources a company needs in creating values over a specific time, even if they are from
the society therein as whole as well as if they have free access to the society. As a result, IR
ethos that some values are created and shared in between an entity and community in which
IR operates. In essence, IR combines some material non-financial as well as financial info in
single report, indicates linkages or associations between two and informs regarding several
forms of capitals (Moolman, Oberholzer & Steyn 2016).
Demonstration as To How the Six Capitals under IR Framework Might Influence Role
of the Strategic Management Accounting
IR might influence the central concept; that is strategic management account through
financial, human capital, relationship and social capital, natural, intellectual and
manufactured capital (Villegas 2017). This is due to perception that IR brings together
material info regarding entity’s governance, prospects, strategy and performance in a manner
that shows environmental, commercial and social context in which the firm operates. It offers
concise representation on how an entity demonstrates leadership as well as how it creates
some values (Moolman, Oberholzer & Steyn 2016). Besides, the Six Capital under the IR
framework might influence organization’s strategic management accounting since it include
more inform on how an entity fits in the society and business environment as well as how it
creates the long-run values.
Basically, the framework has changed the move from the merely reporting of the historical
financial information to focusing on long-run viability of a firm (Hoque 2017). The IR takes
into deliberation of interdependencies as well as connectivity between the six capitals that

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affect organization’s strategic management accounting. These capitals encourage business or
entity to think more widely and to take into account of all probable sources of the value
creation and reporting them.
Conclusion
The latest framework to the corporate reporting known as the integrated reporting was
suggested by IIRC. This is a new reporting framework though it is considered a powerful hint
to corporate reporting; enhancing the manner in which firm think, report and plan stories of
their operations. A good number of entities are using the IR in communicating concise, clear,
and integrated stories which demonstrates how all the resources are adding some value.
Further, it can be stated that IR framework has the probability of offering improved and new
information component that is significant in forming balanced and holistic view of an entity
performance.

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REFERENCE
Fernando, K, Dharmawati, R, Sriani, D, Shauki, ER & Diyanty, V 2017, ‘Does Integrated
Reporting Approach Enhance the Value Relevance of Accounting Information?: Evidence
from Asian Firms’, In 6th International Accounting Conference (IAC 2017). Atlantis Press.
Hoque, ME 2017, ‘Why company should adopt integrated reporting?’, International Journal
of Economics and Financial Issues, 7(1).
Lodh, SC 2018, ‘Conventional accounting in determining an enterprise’s wealth: Sign or
referent – a theoretical discourse for augmentation’, International Journal of Critical
Accounting, Vol. 10, No. 5. pp.341-362.
Loprevite, S, Ricca, B & Rupo, D 2018, ‘Performance sustainability and integrated reporting:
Empirical evidence from mandatory and voluntary adoption contexts’, Sustainability, 10(5),
1351.
Moolman, J, Oberholzer, M & Steyn, M 2016, ‘The effect of integrated reporting on
integrated thinking between risk, opportunity and strategy and the disclosure of risks and
opportunities’, Southern African Business Review, 20(1), 600-627.
Sofian, I & Dumitru, M 2017, ‘The compliance of the integrated reports issued by European
financial companies with the international integrated reporting framework,’ Sustainability,
9(8), 1319.
Villegas, MG 2017, ‘El Reporte Integrado en el sector público: una mirada desde
latinoamérica’, Revista española de control externo, 19(57), 67-92.

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Watson, A 2011, ‘Financial information in an integrated report: a forward looking approach’,
Accountancy SA, 14-17.