Integrated Reporting as a Better Platform for Corporate Disclosure

Running head: ADVANCED FINANCIAL ACCOUNTING
Advanced Financial Accounting
Name of the Student
Name of the University
Author’s Note

ADVANCED FINANCIAL ACCOUNTING1
Question One
It is needed to assess whether integrated reporting is a better platform for corporate
disclosure for the users of financial statements. In case of National Australian Bank (NAB),
the selected user group of the financial reports is the Shareholders. Now, it is needed to
mention that the shareholders have certain information need. As shareholders are the part-
owners of the bank, they are required to know how the bank did for deciding whether to sell,
buy or continue to hold the corporation’ shares. For this reason, they need financial
information from income statement and sheet along with financial ratios for analysing
financial performance and position of the bank (Collier 2015).
It can be seen from the 2018 Integrated Report of NAB that the bank has disclosed
their financial performance for the year 2018 which includes information on the financial
performance of the banks through key financial indicators like net operating income, net
profit and others. In addition, this part also includes the key financial ratios of the bank for
analysing its financial performance and position (nab.com.au 2019). NAB has also included
information on non-financial performance of the bank. In the part named “SHAREHOLDER
INFORMATION”, the bank has provided information in dividend payment. This section also
includes the link of annual report so that they can easily access it. It implies that the
integrated report of NAB has been able in satisfying the information need of the shareholders.
Therefore, it has been able in presenting a better platform for corporate disclosure for the
shareholders (de Villiers et al. 2014).
Question Two
Institutional theory is considered as a crucial theory for justifying the adoption of the
practice of integrated reporting by the companies. This theory states that institutions of
economic, cultural, educational, financial and political nature maintain a major influence

ADVANCED FINANCIAL ACCOUNTING2
upon the worldwide organizations (Peters 2019). As per this theory, the disclosure policies of
an organization would tend to become similar to those employed by other companies. This is
a crucial aspect that needs to be considered in case of the adoption of integrated reporting by
NAB. It needs to be mentioned that there are two main dimensions of institutional theory;
they are Isomorphism and Decoupling. The adoption of integrated reporting by NAB can be
justified with the help of these dimensions.
Isomorphism
Coercive – It states that the business organization bring changes in their institutional practice
due to pressure from those stakeholders upon which the organization has dependency. It can
be seen from the integrated report of NAB that the bank has key stakeholders like customers,
people, community and shareholders upon which the business operation of the bank depends.
All these stakeholders have different information need that cannot be provided through
annual reports. This creates a pressure on NAB to adopt integrated reporting which provides
the scope to satisfy the information needs of these stakeholders with its six capital approach
(Frias-Aceituno, Rodríguez-Ariza and García-Sánchez 2013).
Mimetic – As per this concept, organizations have the tendency to follow or copy the practice
of other organizations in order to gain competitive advantage and to reduce uncertainty. This
needs to be considered as a major force behind the companies for the adoption of integrated
reporting and the same can be seen in case of NAB. It needs to be mentioned that many large
banks all over the world have already adopted the practice of integrated reporting which
create a pressure on NAB to adopt the same to maintain their goodwill in the industry along
with gaining the required competitive advantage (Stubbs and Higgins 2014).
Normative – According to this concept, organizations have to adopt certain practice due to
the pressure from group norms for adopting that particular institutional practice; and this