Corporate Accounting Integrated Reporting - PDF

Added on - 15 Jun 2021

  • 10

    Pages

  • 2762

    Words

  • 49

    Views

  • 0

    Downloads

Trusted by +2 million users,
1000+ happy students everyday
Showing pages 1 to 3 of 10 pages
CORPORATEACCOUNTINGINTEGRATED REPORTINGSTUDENT ID:[Pick the date]
IntroductionThe significance accorded to both transparency and sustainability has witnessed significantgrowth since the advent of the 21stcentury which has left sizable impact in the mannerbusiness is conducted (Couldridge, 2014-2015). In the earlier days, the main concern for thebusiness was shareholders’ wealth maximisation but now a paradigm shift has happenedtowards the stakeholder model where sustainability is given significance so that value can becreated over the long term (Hoque, 2017). Owing to this concern is sustainability, the needfor the non-financial information has grown in the last two decades which has meant that thetraditional reporting is no more sufficient considering the limited flexibility that it offers toaccommodate non –financial performance parameters. Additionally, in the ongoing time, ithas been seen that value has shifted from financial capital to intellectual capital and hencethis needs to be captured and reported. Therefore, it is required that the non-financialinformation can be captured in various financial reports and shared with the intended users(Adams, 2013).A useful tool in this regards is integrated reporting since it can capture not only financialperformance parameters but also for non-financial aspects. It refers to the practice ofcorporate communication which involves dissemination of an “integrated report’ on aperiodic basis which highlights value creation carried out by the firm over a particular time.Thus, this reports contains various aspects related to the organisation such as governance,strategy, performance and prospects as these could over a period of time leas to creation ofvalue (Adams, 2013). The relevance of integrated reporting becomes evident from the IIRCsurvey in which most of the businesses considered it as a valuable tool which can capture thenon-financial aspects of the business. In this background, this report aims to criticallyhighlight the key benefits that can potentially arise through the use of integrated reportingalong with highlighting the potential challenges therein.
Benefits of Integrated ReportingOne significant benefit that tends to arise from integrated reporting is in the form of corporatebehaviour change which makes the organisation more sensitive to sustainability concerns. Asper King (2011), the integrated reporting commences from this realisation by the topmanagement that there are sustainability risks associated with the business owing to theadverse effects the operations of the company have on environment as well as society. Oncethis realisation happens, then company strategy is altered so that sustainability concerns areaddressed by suitably modifying the operations of the company. Additionally, integratedreporting also serves as a vital communication tool especially with stakeholders since throughthis the board is able to highlight how the business is being more sustainable (Armbester etal., 2011).Yet another mode through which change in corporate behaviour can kickstart is through theintegrated report preparation. This report could highlight the key weaknesses in the corporatestrategy being currently adhered to and also would lead to the changes required in corporatebehaviour for rectifying the existing situation (King, 2011). The corporate behaviour changecan go a long way in enabling a harmonious integration of business decision making andsustainability. Thus, in such a scenario, a top to down change in observed where a paradigmshift in the organisational culture is brought which tends to long lasting and hence bringsabout a tangible change in regards to making the business practices more sustainable andperiodically reporting the same (Hoque, 2017).A key component of corporate governance is corporate reporting as plays a pivotal role inreduction of agency costs incurred for monitoring of the management, The concerns overfraud financial reporting have grown in the last two decades fuelled by the huge losses thatinvestors have suffered in the various corporate frauds that have occurred and hence
desklib-logo
You’re reading a preview
Preview Documents

To View Complete Document

Click the button to download
Subscribe to our plans

Download This Document