Integrated Reporting

Integrated Reporting (IR) is depicted as presenting corporate information based on entity’s performance, environmental, social and governance parameters. Primarily, organisations depict both financial and non-financial information with the use of integrated reporting. It is essential for the businesses to circulate such an information so that the stakeholders are able to know about sustainable initiatives.

Running head: INTEGRATED REPORTING
Integrated Reporting
Name of the Student
Name of the University
Author’s Note

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Introduction
Integrated Reporting (IR) is depicted as presenting corporate information based on
entity’s performance, environmental, social and governance parameters. Primarily, organisations
depict both financial and non-financial information with the use of integrated reporting. It is
essential for the businesses to circulate such an information so that the stakeholders are able to
know about sustainable initiatives. In the recent times, IR has undergone significant development
in the annual report for ensuring improved brand value and customer loyalty (Macias & Farfan-
Lievano, 2017).
Significance of IR framework in contemporary corporate
The application of IR framework in the contemporary corporate can be noted among the
investors and stakeholders. However, the limitation of this framework is often criticised with its
application only during short-term approach of reporting. The important initiative to implement
IR can be defined with presenting a sustainable value for assisting stakeholder in both medium-
and short-term business. In addition to this, corporate reporting will be able to acknowledge the
developing economic reality which will be essential for organisational planning in the future. In
most cases, the leading corporate entities rely on IR framework for ensuring clear and concise
standard of reporting. This nature of reporting is often conducive for recognising the values and
present the same towards stakeholder. The important information in the integrated reporting is
able to guide the principle for multiple model IR approach. These models of IR have generally
focused on the areas of both financial and non-financial reporting purposes. Additionally, the
relevance of corporate reporting model is associated with appropriate reporting standards which
is followed by the organisation within global reporting (Dumay, 2016).

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Therefore, it is to be noted that IR significantly contributes towards comparison of
financial reports with global standard of reporting. The various components of IR are established
with organisations involved in positively contributing towards external environment. In addition
to this, the initiatives such as disclosing governance factor can be directly evident with additional
value creation. As per the resource and strategy allocation, the organisations will be able to
concentrate on both short-term and long-term goals. The UN has also taken major initiative in
using sustainability reporting for ensuring that the companies are able to implement IR. This type
of initiative is often led by the negotiators by maintaining a “zero draft” policy. The zero draft
policy initiative has led to the development in areas where there is lack of access to health and
medical technologies. This is often related with addressing fair pricing and improvement in
procurement strategies. The application of such a policy will be conducive for the organisations
to ensure that companies are able to include sustainability factor in their financial reporting
(Corbella et al., 2018).
Private and public entities adopting IR framework
The adaptation of such a framework among the private companies can be evident with
Novo Nordisk, BASF, United Technologies Corporation (UTC), American Electric Power (AEP)
and Phillips Electronics. The aforementioned companies have undertaken such a reporting to
integrate various types of financial and sustainability information in their financial report. This
has permitted the organisations for recognising different areas of non-financial perspective apart
from mentioning the key performance based on financial perspective. However, more recently
the publicly listed companies have taken the assistance from dedicated IR officers (IROs) who
are responsible for monitoring different types of private meetings with shareholders and
investors. These officers have also used themselves in providing the required assistance for
conducting conferences. During the implementation of IR framework, it is obligated to

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understand the investor relations function by both private and public sector companies along
with different types of upcoming challenges which they might be facing. The role of the
organisations is also seen to consider the various opinion of the investors at the time of preparing
research model, financial model and data analysis model (Bonsón & Bednárová, 2015).
In different types of other situations, corporate reporting is able to highlight important
information related to the risks of the investor pertaining to climate change. This is particularly
evident among companies based in USA which has taken considerable initiatives in disclosure of
such information in its financial report. It is to be further identified that a handful number of
companies in both private and public sectors have disclosed all the necessary information related
to risks of the investor pertaining to climate change (Surty, Yasseen & Padia, 2018).
Impact of IR framework on strategy and control during corporate reporting
It needs to be noted that for any business publishing of strategy into business model has a
significant impact on investor. The wide number of previous research studies have disclosed that
various corporate entities implement IR framework to have a better control and strategy
implementation. The nature of such evidence can be found among research conducted on South
African companies. The different types of other findings of the research have stated about the
insights on improvement led by incorporating IR into financial reporting. The main findings of
such a study variable to consider several influences which were relevant with the requirement of
integrated reporting (Kılıç & Kuzey, 2018). Some of these findings from the previous studies has
stated about pointing out important information with relevance to decision-making in investment.
The very types of criteria’s pertaining to the IR framework has been conducive in measuring
overall quality of information along with the application of relevant strategy. In this perspective,
the control factor has revealed significant information on identifying the opportunity and risk of
IR. The influence of such a framework as per strategy and control have ensured a more efficient

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operation of the business by identifying the risks and at the same time mitigating such threats
(Siew, 2015).
The assertions inferred on the strategy on control particularly with relevance to IR has
been able to show how businesses have used such a framework to identify future risk factors. It
is also essential for the entities to get notified about this type of risk so that it can act from
beforehand. The implementation of such risk mitigation strategies can be notably discerned
among private companies like Novo Nordisk, BASF, United Technologies Corporation (UTC),
American Electric Power (AEP) and Phillips Electronics (Fernando et al., 2017).
Identification of six capitals having an impact on strategic management accounting
The influencing role played by the six concepts on strategic management accounting can
be noted with “natural capital”, “human capital”, “financial capital”, “intellectual capital”,
“relationship capital” and “social capital”. The adaptation of natural capital acts as a guiding
principle for other capitals. This type of capital is associated with definitive changes for
observing requirements related to significant publishing of equity information. Additionally,
such concepts have been conducive in studying about the changes in business strategy and
knowing about the subjects which may be decided in a distinguished manner from stakeholders’
perspective (Goicoechea, Gómez-Bezares & Ugarte, 2019). The use of human capital is able to
discern the significant nature of changes which often involve identifying the remuneration of
employees, recognition, internal events and external events. It is to be further understood that the
application of financial capital is able to understand the significant scope of changes essential in
disclosing any important information on financial parameters such as equity, liability recognition
and sales revenue (Ngu & Amran, 2018).

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The fundamental understanding of intellectual capital is based on recognising the changes
in intellectual property rights. Some of the additional assertions like relationship capital can be
noted with the aggregate of decisions taken by organisations in ensuring connectivity in the
marketplace both directly and indirectly. Relationship capital is helpful in identifying and
evaluating different aspects of requirement for such a capital which is often termed as RCM. The
aggregate of relationship capital is depicted to be fluid in nature. However, in instance of
unprecedented changes may affect such recognition (Serafeim, 2015). Social capital is designed
with the factors which includes the effectiveness on how the social group are able to function in
an industry with shared identity, norms, effectiveness, trust, cooperation, understanding and
reciprocity. It is to be further understood that in several types of other theories the contribution
pertaining to social capital can be discerned with the influencing role of the strategies formulated
by Management accountants with mention of performance drivers such as growth for
entrepreneurial entities, superior managerial performance, maintaining diverse group and
improvement in overall supply chain relations. Henceforth, social capital is often praised for its
functional efficiency among notable business entities (Paolucci & Cerioni, 2017).
Conclusion
The essence of IR framework in contemporary corporate can be noted among the
investors and stakeholders. However, the limitation of this framework is often criticised with its
application only during short-term approach of reporting. The adaptation of such a framework
among the private companies can be evident with Novo Nordisk, BASF and Phillips Electronics.
The publicly listed companies have taken the assistance from dedicated IR officers (IROs) who
are responsible for monitoring different types of private meetings with shareholders and
investors. Impact of IR framework on strategy is noted with various corporate entities implement
IR framework to have a better control and strategy implementation. The nature of such evidence

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can be found among research conducted on South African companies. Six capitals having an
impact on strategic management accounting can be seen with enhancing operation and financial
control.

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