The Role of Integrated Reporting in Corporate Reporting

Running head: ADVANCE MANAGEMENT ACCOUNTING
Advance Management Accounting
Name of the Student
Name of the University
Author’s Note

1ADVANCE MANAGEMENT ACCOUNTING
Introduction
Integrated Reporting, commonly known as IR, plays a crucial role in the promotion of a
more consistent as well as effective approach of corporate reporting; it also aims in improving
the quality of available information to the users so that the organizational capital can be allocated
in the more efficient and productive manner (integratedreporting.org, 2019). The primary
objective behind the introduction of IR is to inform the financial capital providers of the
companies that how the companies are creating value and all the stakeholders of a company such
as suppliers, employees, customers, communities and other can become majorly beneficial from
the IR. At the same time, it needs to be mentioned that integrated reports provide the users with
both the financial and non-financial information of the companies with the aim to assist them in
the process of various decision-making (integratedreporting.org, 2019).
Discussion
IR improves the manner the business organizations think, plan and report the details of
their businesses. In today’s business world, many of the companies use IR in order to clearly and
concisely communicate an integrated story of their process of value creation. For this reason,
organizations irrespective of private and public are using IR for building understanding as well
as trust in their businesses.
IR is considered as an effective way to assist a private company in better understanding
and managing how they create value so that they can report on their value creation process. The
adoption of IR assists a private company in building a better as well as more material
understanding about the aspects that ascertain the company’s ability of value creation over long,
medium and short-term (integratedreporting.org, 2019). In this process, IR helps in improving

2ADVANCE MANAGEMENT ACCOUNTING
the private firms’ business planning and development by taking into account a wholly corrected,
holistic view on the capitals as well as resources necessary for their business models. Thus, IR
provides the opportunity to the private companies in understanding six different capitals so that
they can effectively manage them for long-term value creation; these capitals are financial
capital, manufactured capital, intellectual capital, human capital, natural capital and social and
relationship capital (integratedreporting.org, 2019). Moreover, better understanding of these
capitals helps the private companies in implementing better communication channels with the
key stakeholders. The IR framework provides the private companies with three guiding
principles that are strategic focus, future orientation and conciseness in reporting. Overall, IR
improves the corporate reporting of the private companies (integratedreporting.org, 2019).
Like private companies, the companies under the public sectors become majorly
beneficial from the implementation of IR. It is the responsibility of many public sector
companies to provide service delivery as well as governance excellence in an environmentally,
socially, financially and economically way (home.kpmg, 2019). IR provides major assistance to
the public sector companies in equilibrium reporting of the conflicting aspects. IR can provide
the public sector organizations with an agenda so that they can focus their reporting on their
major objectives. After that, the public sector organizations get major assistance from IR in
explaining their strategies, governance and operating model so that they key stakeholders can
assess their performance based on these key strategies (home.kpmg, 2019). It means IR assists
these companies in effective stakeholder engagement that can assists these companies in
showing how they have maintained the balance of the often conflicting needs of different
stakeholders. Moreover, the public sector organizations can get the opportunity from IR in
aligning their reporting with the organizational risks and opportunities along with management