Traditional Financial Reporting 2022

Running head: ACCOUNTING
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Executive Summary
The purpose of the report is to focus on criticism related to Traditional Financial Reporting. The
criticism shows Traditional Financial Reporting dealing with a financial outlook of the company
and it does not focus on reporting on another context of the company such as social, economic
and environmental and social effects of the company related to the financial statements. In
addition, Integrated reporting depicts the reunion of two main theories such as shareholder theory
and stakeholder theory and Legitimacy Theory which are discussed in brief. Lastly, the study
covers the costs and benefits of an Integrated report providing at a great extent both within an
organization and from an external viewpoint.

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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
1. Main criticisms of traditional financial reporting.................................................................3
2. Theories behind Integrated Reporting..................................................................................4
3. Costs and Benefits of providing Integrated Reporting.........................................................5
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

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Introduction
The purpose of ‘Traditional financial reporting’ is to give information related to the
financial position of an organization. However, it has been subject to many criticisms concerning
dealing with only financial outlook. International Integrated Reporting Council (IIRC) has
developed Integrated reporting which is having a global alliance with companies, regulators,
investors, other accounting profession and (NGOs) non-governmental organizations (Dumay et
al. 2017). The reporting gives accurate information related to the strategy of an organization,
including its governance and measurement of performance. In addition, it presents some
connection between social, economic and environmental context and its financial performance. It
establishes to show how it becomes possible for the organizations to create short, medium value
including the long term, which helps the stakeholders as well levels (De Villiers, Venter and
Hsiao 2017). In this report, two main theories of Integrated reporting has been discussed in brief,
including its cost and benefits.
Discussion
1. Main criticisms of traditional financial reporting
Traditional financial reporting is guided by International Financial Reposting Standards
(IFRS), which are issued by the International Accounting Standards Board (IASB). The purpose
of ‘Traditional financial reporting’ is to give information related to the financial position of an
organization in a structured way following these standards (De Villiers and Sharma 2017).
Traditional Financial Reporting has been subject to many criticisms. It concerns dealing
with the only financial outlook of the company, and it does not focus on reporting on another
context of the company such as social, economic and environmental and social effects of the