Advanced Financial Accounting: International Integrated Reporting Committee and Frameworks

This study discusses the International Integrated Reporting Committee and the roles of integrated reporting in relation to stakeholder engagement, financial reporting quality, and comparability. It also compares the objectives of general purpose financial reporting and the international framework as contained in the IASB or AASB conceptual framework.

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

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Table of Contents
Introduction......................................................................................................................................4
Question 1........................................................................................................................................4
Question 2........................................................................................................................................5
Part A...........................................................................................................................................5
Providing information that is relevant to stakeholders................................................................5
Part B...........................................................................................................................................7
Stakeholder engagement..............................................................................................................7
Part C...........................................................................................................................................7
Comparability of reporting..........................................................................................................7
Part D...........................................................................................................................................7
Quality of reporting.....................................................................................................................7
Part E...........................................................................................................................................8
Usefulness of reporting................................................................................................................8
Part F............................................................................................................................................8
Users of reporting........................................................................................................................8
Question 3........................................................................................................................................9
Part A...........................................................................................................................................9
Stakeholder relationships.............................................................................................................9

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Part B...........................................................................................................................................9
Materiality....................................................................................................................................9
Part C.........................................................................................................................................10
Conciseness................................................................................................................................10
Part D.........................................................................................................................................11
Reliability and completeness.....................................................................................................11
Part E.........................................................................................................................................12
Consistency and comparability..................................................................................................12
Question 4......................................................................................................................................13
Identification and explaining the similarities and differences between:.......................................13
Part A.........................................................................................................................................13
The definition and objective of the International Framework with the definition and objective
of general purpose financial reporting as contained in the IASB or AASB conceptual
framework..................................................................................................................................13
Part B.........................................................................................................................................14
Part C.........................................................................................................................................14
Part D.........................................................................................................................................16
Question 5......................................................................................................................................17
Question 6......................................................................................................................................21
Conclusion.....................................................................................................................................21

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References and Bibliography:........................................................................................................23
Introduction
In this particular study, the functions of International Integrated Reporting Committee
are demonstrated by referring to the applicable accounting literature and IIRC websites. The next
section illustrates the roles of integrated reporting in relation to the engagement of stakeholder,
financial reporting quality, financing reporting comparability and by referring to the financial
reporting users. Results of CPA report have been compared in the current segment in association
with the guiding principles and such principles comprised of reliability and completeness,
relationship, comparability, consistency and conciseness. Later on, the comparison between the
objectives of general purpose financial reporting and international framework has been
demonstrated as mentioned in the conceptual framework of AASB and IASB (Cascino et al.
2017). Furthermore, comparison has been done between the reporting framework of two
companies that involves MTN Group, HULAMIN LTD, DSM and CEMEX. Such assessment helps in
valuating whether their reporting framework complies with the guiding principles of IR.
Question 1
The International Integrated Reporting Council was previously known as The
International Integrated Reporting Committee and was established in year 2010 with the
objective of creating a framework that is accepted at global level that has the consequence of

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creating communication that is with creating value for organizations. A cross section of
representatives from accounting, investment, corporate, civil society and standard setting sector
are brought together using the platform of IIRC. Such representatives comprises of a working
group, steering committee and a three task forces. IIRC is one of the coalition’s standard setters,
regulators and professions from accounting. The committee has the intention of bringing together
the development by way of conducting the internationally reported framework that is accepted
internationally (Randolph 2015). Creation of such framework will assist business in creating
concise communications of their information and thereby help in value creation and leading to
the corporate reporting evolution.
Question 2
Part A
Providing information that is relevant to stakeholders
The main interest of the stakeholders is having access of information that is relevant for
their investment decision making. For example, investors now a day are interested in gaining the
information relating to environmental issues and it is regarded significant in their investment
decision depicting the particular organization is socially responsible or not. Such stakeholders
have information requirement that are varied and extensive and it is not possible for a single
annual or strategic report to address such requirements. It has been ascertained by making
reference to CPA report and findings from literature review that for conducting research on any
particular organization, stakeholders derives background information by making reference to
such reports (Humphrey et al. 2017).

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Part B
Stakeholder engagement
Engaging directly with the companies or business is the primary source of stakeholders
for seeking relevant information. Engagement of stakeholders is considered as quite interesting
as they are able to gain information and are able to prioritize the information that they have
derived.
Part C
Comparability of reporting
The informational requirements of stakeholders such as environmental and civic
references cannot be met by the integrating reporting framework. At the same time, most of the
stakeholders have to face the issues relating to the matters such as timing issues, quality and
comparability at the same time (Scott 2015).
Part D
Quality of reporting
Integrated reporting quality is used as a platform for identifying some of the significant
variations as ascertained by the financial stakeholders. It is opined by some of these financial
stakeholders that there are loopholes in the integrated reporting framework as it does not account
for most of the case studies along with absence of narrations of the significance of issue and their
inability to set the target. In addition to this, it is also pointed out by the environmental

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stakeholders that the integrated reporting also lacks on providing information on matters such as
setting correct indicators in matters relating to environment such as providing headlines for some
environmental issues and information about making lending to the projects such as fossil fuels.
Part E
Usefulness of reporting
The decision making activities are conducted by stakeholders using the framework of
integrated reporting and in this regard, such report is considered as useful to investors. The
usefulness of integrated reporting comes with mixed views on part of stakeholders. The main
purpose of such integrated reporting framework is to highlight on the matters that are considered
relevant for the decision making purse by the stakeholders (Mayo 2017).
Part F
Users of reporting
The main users of integrated reporting are stakeholders and investors as such report make
a disclosure about the different views of the users and importance of the producers of report.

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Question 3
Part A
Stakeholder relationships
The information about the relationship of stakeholders with organization can be accessed
from the findings generated from CPA report. Such information’s are disclosed under the content
elements of performance that helps in explaining the relationship of stakeholders with that of
stake. In addition to this, integrated report also incorporates the relationship of stakeholders and
improved reputation of the corporate.
Guiding principles Integrated reporting Findings from CPA report
Relationships with the
stakeholders
Performance
Business
Stating stakeholder relationships
Part B
Materiality
It has been ascertained from the findings generated from CPA report that the business is
required to make disclosure of the information on matters relating to the environmental
performance, information on the change in climatic conditions and disclosure about carbon
emissions and the social impacts of their operations. Such information disclosure is regarded as

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relevant because of stakeholders found it important to get incorporated in their investment
decision making. Moreover, it is also sought by the stakeholders to make disclosure of the
information that have a material impact and disclosing the materiality concepts. There are many
organizations who provide stakeholders with the information about the operations if their
business activities (Iasplus.com 2018). Nevertheless, such information disclosure is not
considered as relevant unless the organization is a big user of energy or they are a power
generator.
The materiality concept is applicable and determined by organization from value creation
perspectives as evaluated from integrated reporting. Therefore, it can be inferred from the
analysis that the framework of integrated reporting should disclose the matters for which the
ability of business is impacted pre dominantly and intends to create value for long and short
term.
Part C
Conciseness
It has been evaluated from the findings of CPA report that the present information as
well as conciseness facts is praised by organizations largely. It was opined by one of the
reporters that potential information could not be accessed because of the level of detail presented
in the report (Richardson 2017). Moreover, the challenging task for reporters is to keep the report
in concise format that will help in treating complex business activities by gaining the access to
right business information.

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It has been found from the CPA report that the concise information’s could not be
rendered by most of the reporters. However, stakeholders are able to have an understanding the
process of value creation by providing sufficient context to readers along with the performance
of organization at different times.
Part D
Reliability and completeness
On finding the reports of CPA, we have noted that more than about 10 stakeholders have
interrogated about the how much the reports are reliable, whereas we can see that the integrated
reports also provides assurance and verification of the reports since it has been expected to
provide a helping hand in assuring some confidence to a few stakeholders as well. In case we
talk about the financial stakeholders, they are expected to find reliability in various forms as they
deal in developing a reliability score for feeding as the assessment begins to process. At the same
time we can note that other financial stakeholders expect the data which are provided should
even more reliable in nature, the information about the data should be complete which
consequently will result in distortion of the significant information.
In order to strike a balance in between the good and bad news together in case of
integrated reporting, there must be reliability and completeness, the principles of reliability and
completeness are found to be very motivating and encouraging as we can see that about 60
percent of the reports have used neutral factual language and also has managed to avoid depicted
as the managing and marketing tools. So as to bring improvement in conscience as well as the
reliability and completeness of the information it is significant to bring about the improved

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changes in the materiality determination processes, thereby enhancing the credibility of the
reports in the most proper way possible.
Part E
Consistency and comparability
Major arguments were raised by the stakeholders on issues related to the usefulness of the
integrated reports from the findings of the CPA reports which is found to be very helpful in
comparing the reports. On studying the integrated reports the consistency and comparability
means letting the comparisons to be made for a specified period of time with other business
enterprises.

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Question 4
Identification and explaining the similarities and differences between:
Part A
The definition and objective of the International Framework with the definition and
objective of general purpose financial reporting as contained in the IASB or AASB
conceptual framework
International Framework objectives and
framework.
Purpose financial reporting as depicted in AASB
conceptual framework or IASB.
International framework is the integrate report that
helps users by providing concise information about
the governance, strategy, prospects and
performance at internal and external level so that
business are able to generate value over time for its
stakeholders.
The concepts as well as objectives used for the
purpose of general financial reporting are described
in the conceptual framework of financial reporting.
Moreover, the general purpose financial reporting
also provides assistance to the International
standard board for development of standards that
are of consistent nature.
Assist in improving the content of governing
process of organization by establishment of content
elements and guiding principles. Explanation of the
basic principles underpinning such guidelines so
that organizations are able to make adequate
utilization of such framework.
It assists preparers in consistent accounting policies
development when there is no standard applicable
to any specific or particular transactions. This
particular objective is regarded as useful when no
accounting policy exist in light of absence of
standard.

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Part B
Identification integrated reporting users Identification of general purpose financial
reporting users
An integrated reporting is of great importance to
users such as investors and stakeholders who shows
considerable interest in any organization for the
purpose of decision making and analyzing their
ability of creating value over time. Such users
involve customers, suppliers, employees, local
communities, business partners, regulators and
legislators.
Long term investors or shareholders in any
particular organization are the significant uses of
the general purpose financing reporting.
This is so because general purpose financial
reporting entitles organization to make appropriate
disclosure of their financial information by aligning
with the relevant accounting policies. It assists
them in making investment decisions.
Part C
Concept of materiality according to integrated
reporting
Conceptual framework concept of materiality
according to IASB
The information on matters concerning materiality
is disclosed in the integrated reporting and such
materiality concept would affect the ability of
business to create the value for a given time period.
At the time of presentation and presentation of
integrated report, the process of determining
materiality is considered of utmost importance. The
Information presented in the annual report is
regarded as material if it influences the decision
making process by misstating of omission the
figures of any reporting entity.
Moreover, materiality is considered as one of the
aspect of relevance that is entity specific and such
material factor is dependent upon the context and

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relevant matters that helps in identifying the ability
of creating value in terms of the potential impact on
attributes of value creation (Libby 2017).
magnitude of financial reporting.

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Part D
Integrated concepts IASB conceptual framework concepts
Reliability- Freedom from nay material errors and
balance impacts the reliability of information that is
presented in the financial report. Some of the
mechanism that helps in enhancing reliability is
reporting system and robust internal control system
along with stakeholder engagement (Macve
2015).
Completeness- It is required by organization to
make the identification of all the material
information for deriving complete information.
Reliability- Information is considered as reliable in
accordance with IASB conceptual framework if
such information is represented faithfully and is
free from any material errors. One of the qualitative
characteristics of the financial reporting is
reliability.
Completeness- As per the framework of IASB, the
information presented in the financial report of
organization should be complete and there should
not be absence of any information.
Comparability- The information presented in the
annual report should be easily compared over time
so that it assists users in comparing the information
during the different financial reporting period.
Consistency- The quality of financial information
presented in the report is enhanced if there is
consistency in the information’s so that it becomes
useful for users to evaluate the performance of
company.
Comparability-This particular qualitative
characteristic enables users to evaluate the
differences and similarities between the facts and
financial information presented in the report.
Consistency-Consistency is about making use of
same method accounting treatments of some of the
financial elements presented in the report. Such
characteristics would facilitate users to properly
evaluate and analyze the information and making
sound investment decision.

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Question 5
Integrated reports of four companies Guiding Principles of IR
HULAMIN LTD
The subscription of company is done on the
principles of stakeholder engagement as depicted in
the code of King III. Moreover, development of
management is done for formulating the policies
and highlighting the strategies for each group of
stakeholders. Any disputes with the stakeholders
are resolved by organization in a very effective
manner. Rather than litigating, the company intends
to settle any disputes using the mechanism of
resolution (Haskin and Burke 2016).
CEMEX
The main principle of CEMEX is to build and
maintain strong relationship with their
stakeholders. Any alterations in their financial
statements are adequately informed using a proper
platform.
MTN GROUP
The operating activities of company are informed
to the stakeholders along with the information
about the amount of money being invested.
DSM
The main purpose of company is to keep their
Stakeholder relationships
The relationship with stakeholders and reputation
of organization has improved by incorporation of
integrated reporting framework.

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stakeholders well informed by building cordial
relationship with them. Such information and
cordial relationship further helps in enhancing the
investing decision making of company.
HULAMIN LTD
The concepts of materiality have been applied at
Hulamin limited for enabling qualitative as well as
quantitative disclosures. Moreover, for enhancing
the disclosure of information, various changes have
been made and accordingly implemented. Such
changes have facilitated the comparison of the
financial information presented between different
reporting period.
CEMEX
It is believed by company that there should be
adequate presentation of information’s on all
matters related to materiality. The group ensures
that there is no materiality of the accounts and
omitted figures in the financial statements.
MTN GROUP
All the material matters presented in the financial
statements are adequately highly at MTN group.
This provides assistance to investors in gaining all
the relevant financial information so that the
Materiality
The application of materiality concept is done by
organization from the value creation perspectives.

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financial performance can be compared over time.
DSM
A great amount of emphasis is put by company on
sufficient disclosure of material information’s in
the financial statements.
HULAMIN LTD
It is believed by the company that a consistent
approach should be adopted that would help in
balancing the accounting treatments under different
categories.
CEMEX
Consistent information is rendered by organization
at CEMEX to the financial statements users and
used for facilitating comparison between the
reporting periods.
MTN GROUP
Users should be capable of understanding the
qualitative terms such as comparability and
consistency. Sufficient emphasis is laid down by
organization in disclosing the qualitative
characteristics so that financial information can be
compared.
DSM
The main priority of DSM is to provide users with
the consistent information so that financial
Consistency and comparability
These characteristics help in creating comparison
and consistencies across the different reporting
period.

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information can be compared.
HULAMIN LTD
The main objective of company is to provide
stakeholders with relevant financial information
that is free from material misstatements.
CEMEX
Proving complete and reliable information to users
is the main objective of the group.
MTN GROUP
Investors at MTN group are provided with
adequate information about the financial
performance of organization.
DSM
Investors at DSM group are provided with adequate
information about the financial performance of
organization.
Reliability and completeness
Completeness and reliability qualitative
characteristics help in creating balance between bad
as well as good events together.
Question 6
From the question given above, it is understandable that how the IR guiding principles
are significant to understand the undertakings taken by the enterprise or the organization. The
guiding principles which are selected above for the purpose of analysis were the stakeholder’s

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relationships, materiality, reliability and completeness, consistency and comparability (Loprevite
et al. 2018). These above mentioned principles are explained in detail by referring to about four
companies for example such as HULAMIN ltd., CEMEX, MTN Group and DSM. In order to
relate with the IR guiding principles the integrated reports of these four companies are needed.
There are facts that have been noted by explaining the similarities and the differences are
assembling of the information related to it. Obtaining the required information is essential and
can be treated as one of the most significant factors pertaining to the framework of integrated
reporting. It becomes very difficult for the companies to maintain healthy relationships with
clients without having complete and appropriate information. Each and every shareholder need
to be informed about any kind of changes or alterations made in organization (Martin and
Roychowdhury 2015). Also hiding of the important information or not acquainting the clients
about the newer implementation in the organization can have serious negative impact and image
of the company on the clients and consequently it may affect their businesses in the long run.
Others are the key factors that are playing a significant role in maintaining a good relation and
communication of the stakeholders.
Conclusion
Lastly at the end of this study we conclude that the integrated reports provide useful and
beneficial information to the users. Integrated reporting is also found to provide the thinking
within the mainstream business practices and thereby providing connectivity in between the
companies the clients. Comparisons are done or conducted so as to understand that it is
significant to provide the complete information about the enterprise or a financial statement as it
is found to help the users at the time of significant decision making .Communicating with the

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stakeholders as well as maintaining good relationship with the clients are found to be useful in
the success of the process.

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