Integrated Reporting

This study covers a study on integrated reporting (IR) framework over two different sections such as Part ‘A’ and Part ‘B’. Part ‘A’ covers an essay on IR framework and a case study to be attached with the Appendix section. Part ‘B’ is an individual presentation on integrated reporting (IR) framework. The essay section of this study discusses the benefits of using IR framework. The presentation is being constructed based on the written part of this study. Overall, this can be a helpful study for its readers to understand the importance of integrated reporting (IR) framework these days.

Running head: INTEGRATED REPORTING
Integrated Reporting
Name of the student:
Name of the university:
Author note:

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Executive summary
This study covers a study on integrated reporting (IR) framework over two different sections
such as Part ‘A’ and Part ‘B’. Part ‘A’ covers an essay on IR framework and a case study to be
attached with the Appendix section. Part ‘B’ is an individual presentation on integrated reporting
(IR) framework. In the essay section of this study the benefits of using IR framework is mainly
discussed. However, the conclusion section highlights that IR framework will lose its
effectiveness if not being supported with appropriate utilisation of its data. An appropriate
utilisation means appropriately planning strategies to counter any issue being identified in the
report. The presentation is being constructed based on the written part of this study. Overall, this
can be a helpful study for its readers to understand the importance of integrated reporting (IR)
framework these days.

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Table of Contents
Part A:..............................................................................................................................................3
Essay................................................................................................................................................3
References........................................................................................................................................9
Appendix........................................................................................................................................11
Case Study.....................................................................................................................................11
Reference.......................................................................................................................................12

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Part A:
Essay
The main purpose of this essay is to discuss and understand integrated reporting (IR)
framework from various perspectives including also its six pillars. The six pillars of IR are
financial, intellectual, manufactured, social and relationship, human and natural (Flower 2015).
Integrated reporting these days is getting huge attention from various private and public firms in
the world. It is because the framework provides a unique and an easy approach for reporting
separately on annual and CSR report. Reporting on the company’s financial performance is not
alone sufficient these days. Instead, business is also supposed to report on other aspects of the
business like its impact on the development of economic, human, social and natural capital
(Flower 2015).
Thesis statement; “corporate integrated reporting (IR) is a good move for integrating
different reporting norms”
The use of IR framework by wide number of private and public firms is following an
incrementing trend. A set of data can help to understand the stated fact in the first line of this
paragraph. Hence, approximately over 1,000 firms are being into integrated reporting for years.
In addition, more than 50% of COOs, CEOs and CFOs have started moving towards IR. A close
to 35% of same entities have planned moving to IT in nearing future. Adding to this, companies
listed on the Johannesburg Stock Exchange have already been into integrated reporting since
2010 (Business-humanrights.org 2019). In Japan alone the number of business that do integrated
reporting is over 150. In Japan, around 200 companies adopted integrated reporting
(Integratedreporting.org 2019). The list also includes countries such as Singapore, Malaysia, the

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Netherlands, Brazil, North America, India and United Kingdom (The Guardian 2019). All the
statistics covered so far in this paragraph just indicate an increasingly growing trend for
integrated reporting. However, it does not at all express the difficulties or challenges being faced
by these or many of such firms. The issues related with integrated reporting is being discussed in
the later part of this essay.
Integrated reporting for value creation and strategic control, organizations are no
longer analyzed for their financial performance alone. They must also be doing well in parts,
which impacts the society and the national economy. It means sustainability is an essential part
of business now and so of the reporting. Hence, it is important that corporate reporting is done
considering an assessment of organizational strategy, its social impact and performance forecasts
(Hąbek and Wolniak 2016).
Integrated reporting does really help in value creation. This can be understood from a
number of case examples showing companies to have benefitted from using the integrated
reporting. The list of companies include but not limited to like General Electric, SAP, Novo
Nordisk and Tata Steel (Dumay et al. 2016). Creating an integrated reporting helps companies
presenting a holistic picture of their business prospects. This on a broader aspect was never
possible with traditional financial reporting. Integrated reporting can be beneficial for both
leaders within the company and external stakeholders. Integrated reporting act like an agent to
internal change. It highlights the operational areas that have been the underperformers for the
company with respect to business sustainability. Hence, management gets informed on the weak
zones. Consequently, they find many reasons to go for assessing the needs for the change. Needs
assessment is eventually a part of companies that aspires business sustainability. Such change
processes are definitely the means to enhance service efficiency and human capability of the

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company. Indeed, this would become a fact provided that the change process is effectively
managed. The outcomes of any change process if it was elaborately analysed from different
business perspectives would most certainly add values to the service domain to have been
through the change (Adams 2015).
Integrated reporting does also help in strategic control. It has already been stated earlier
in the above paragraph that integrated reporting is helpful in value creation. It is due to many
reasons such as for it acts as internal change agent. Since it reports on various aspects of a
business, it produces a large set of data. Such large set of data are being noted down on
supportive and feasible technical platforms and then analysed to be able to make an evaluation of
the business performance. It eventually influences to go for the needs assessment to understand
whether the problem zones are treatable without being going for a change. Whether a change is
required or not this will actually create alerts concerning certain areas. These alerts will
encourage strategy making for identifying ways to treat the problem zones and facilitate a
sustainable business practice (Perego, Kennedy and Whiteman 2016). For example, integrated
reporting has helped to identify certain problem zones in the operations like increasing attrition
of employees. Integrated reporting will also give data showing that the highlighted area is
becoming an issue. Hence, a meeting will take place between the boards of members. This will
follow a meeting to be held between the management and employees to identify what actually is
influencing the attrition. Hence, they will reassess their existing strategies for reducing the
attrition and if required will look for either modifying it or adopting a completely different
strategy. This is how integrated reporting helps in strategic control.
Impact of six pillars of IR framework on the role of strategic management accounting
can be observed by analysing it. The six pillars of integrated reporting framework are financial,

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intellectual, manufactured, human, natural and social and relationship (Burke and Clark 2016).
Strategic management accounting is a process to strategically manage organizations’ financial
capability by closely monitoring and analysing various accounting terms. These are costs,
strategy, trends, prices and planning (Burke and Clark 2016). The six pillars of integrated
reporting framework has a direct impact on business. The business as stated earlier is not just
limited to making revenues but also to maintain the entire elements of a business. Since, six
different pillars are reported in IR framework, strategic accounting managers get to know a wider
aspect of the business. It was traditionally restricted just to care for the financial part of the
business. Now, strategic managers also have data on various other factors, which influence the
business.
Financial capital is one of the pillars of IR framework. IR framework provides a detail
analysis of the financial aspects of the business. It produces data in various aspects of finance
like cost, revenues, prices, trends, cash flow, liquid cash and much more. Strategic managers
have the data with them, which they can compare with that of the previous years’ data. By doing
so they will have a clear picture of the current financial capital (Baboukardos and Rimmel 2016).
Hence, strategic managers will accordingly make plans to support the financial capital of the
company.
Intellectual Capital is also a part of or one of the pillars of integrated reporting
framework. IR framework informs management on types of intellectual properties like
trademarks, trade secrets, patents and unique ideas. These are intangible assets and can be
obtained from balance sheet. IR framework provides a much elaborated discussion on these
intangible assets (Islam and Islam 2018). Hence, strategic accounting managers get to know on

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how these assets are performing and their respective impacts on the financial aspects of the
business.
Manufactured Capital is a significant part of integrated reporting framework. It refers to
material goods or property leased, owned or controlled by a company. Some of the examples of
manufactured capital include tools, machines, technology, buildings and the variety of forms of
infrastructure. These data were not largely the part of the company’s financial and annual report.
Indeed, these areas are elaborately explained in the integrated reporting framework. With this in
practice accounting managers now have a wide array of information on the types of
manufactured capital. Hence, they now have more data to cross-check whether there is
everything okay with the manufactured capital. Consequently, this will also impact their strategy
making, which will vary depending on the kind of data they have (Ruiz-Lozano and Tirado-
Valencia 2016).
Human Capital is perhaps one of the most vital pillars of integrated reporting framework
considering that employees are the valuable asset to a company. IR framework does elaborately
explains the types of data on human capital like the number of employees, the attrition rate, the
retention rate and so on. Integrated reporting framework produces a huge amount of data on the
types of human capital enabling mangers to take suitable actions concerning the diverse
situations (Morros 2016).
Natural Capital is one of the pillars of the IR framework. A traditional reporting format
was never so elaborated on the types of natural capital the way integrated reporting (IR)
framework is. Natural capital includes information such as the measures and strategies being
used to reduce the carbon footprint impact of an organization. It also includes promoting a green
supply chain operations management. Environmental wellbeing has emerged as essentials to

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operations to be able to attain business sustainability (Bonsón and Bednárová 2015). IR
framework does provide all these information and create enough reason for strategic accounting
managers to consider a revisit to their existing strategies.
Social and relationship is the last pillar of IR framework. The framework produces
information on how a company is being with the society and community around it. Hence,
strategic managers in accounting are encouraged to study these information and utilise all these
while designing future strategies for social and relationship (Siew 2015).
To conclude, this can be said that integrated reporting is a good tool to have an enhanced
view of a business and its impact on the six different pillars of IR framework. Moreover,
strategic accounting managers now have an enhanced control of what is happening within and
outside their company. However, the effectiveness of IR framework will depend a lot on how
these managers utilise the data thus covered in the report.

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References
Adams, C.A., 2015. The international integrated reporting council: a call to action. Critical
Perspectives on Accounting, 27, pp.23-28.
Baboukardos, D. and Rimmel, G., 2016. Value relevance of accounting information under an
integrated reporting approach: A research note. Journal of Accounting and Public Policy, 35(4),
pp.437-452.
Bonsón, E. and Bednárová, M., 2015. CSR reporting practices of Eurozone companies. Revista
de Contabilidad, 18(2), pp.182-193.
Burke, J.J. and Clark, C.E., 2016. The business case for integrated reporting: Insights from
leading practitioners, regulators, and academics. Business Horizons, 59(3), pp.273-283.
Business-humanrights.org 2019. So. Africa: Johannesburg Stock Exchange-listed firms required
to produce integrated report on financial, environmental, social impacts - new guidance issued |
Business & Human Rights Resource Centre. [online] Business-humanrights.org. Available at:
https://www.business-humanrights.org/en/so-africa-johannesburg-stock-exchange-listed-firms-
required-to-produce-integrated-report-on-financial-environmental-social-impacts-new-guidance-
issued [Accessed 30 Jan. 2019].
Dumay, J., Bernardi, C., Guthrie, J. and Demartini, P., 2016, September. Integrated reporting: a
structured literature review. In Accounting Forum (Vol. 40, No. 3, pp. 166-185). Elsevier.
Flower, J., 2015. The international integrated reporting council: a story of failure. Critical
Perspectives on Accounting, 27, pp.1-17.

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Hąbek, P. and Wolniak, R., 2016. Assessing the quality of corporate social responsibility reports:
the case of reporting practices in selected European Union member states. Quality & quantity,
50(1), pp.399-420.
Integratedreporting.org 2019. Japanese report calls for Integrated Reporting | Integrated
Reporting. [online] Integratedreporting.org. Available at:
http://integratedreporting.org/news/japanese-report-calls-for/ [Accessed 30 Jan. 2019].
Islam, R. and Islam, M.R., 2018. Insights the Practice of Integrated Reporting: A Study on
MNCs in Bangladesh on the Degree of Adherence to the Reporting Framework. Open Journal of
Business and Management, 6(03), p.733.
Morros, J., 2016. The integrated reporting: A presentation of the current state of art and aspects
of integrated reporting that need further development. Intangible Capital, 12(1), pp.336-356.
Perego, P., Kennedy, S. and Whiteman, G., 2016. A lot of icing but little cake? Taking integrated
reporting forward. Journal of cleaner production, 136, pp.53-64.
Ruiz-Lozano, M. and Tirado-Valencia, P., 2016. Do industrial companies respond to the guiding
principles of the Integrated Reporting framework? A preliminary study on the first companies
joined to the initiative. Revista de Contabilidad, 19(2), pp.252-260.
Siew, R.Y., 2015. A review of corporate sustainability reporting tools (SRTs). Journal of
environmental management, 164, pp.180-195.
The Guardian 2019. Integrated reporting in a disintegrating world. [online] the Guardian.
Available at: https://www.theguardian.com/sustainable-business/blog/companies-integrated-
sustainability-corporate-reporting [Accessed 30 Jan. 2019].

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Appendix
Case Study “Woolworths Holdings Limited”
The chosen case study using an integrated reporting (IR) framework is “Woolworths
Holdings Limited”. The company is based in South Africa and is also listed in JSE, which is the
oldest and largest stock exchange in Africa (Woolworthsholdings.co.za 2019). The integrated
annual report of “Woolworths Holdings Limited” shed lights on some areas that are facing
challenges. Consumer spending is one of those areas that has largely been affected from socio-
political and macro risks. Negative perceptions for price, product and value of consumers is
affecting the spending. The company is also not being able to exploit the trends for fashion,
quality and fit. Aggressive competition is increasing making it difficult to retain substantial
market shares. These are some of the issues related with strategic management of integrated
reporting (IR) (Woolworthsholdings.co.za 2019).
The piece of information furnished as in the above paragraph shows that despite being
able to identify the problem zones in regards to consumer spending, problems largely remain
unresolved. It means that Woolworth Group has so far struggled to leverage the benefits of
implementing integrated framework. The framework seems to have benefitted the company in a
way that an elaborate response was gathered on one problem. However, it is not so in regards to
implementing identified solutions to make a difference to these issues.
Sustainability leadership is another problem zones. “Woolworths Holdings Limited” has
failed to retain its leadership position in sustainable business practices. The fact has resulted in a
loss of competitive advantage to the company. It is also affecting its brand image. Leadership in
sustainability is mostly hammered from traceability and product safety. The increasing cost of

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natural resources has affected its supply chain operations management. The company has also
failed to transform its business in-line with the transformation objectives of Africa. The company
was also found being non-compliant with regulatory requirements (Woolworthsholdings.co.za
2019).
The set of information furnished as in the above paragraph just indicate the failure that
Woolworths Holdings met with. It clearly shows that the company has benefitted from
implementing integrated reporting framework. It has helped company to have an elaborated view
of the problem areas. As a result, the management could identify certain areas such as those
mentioned in the above paragraph. However, problems mentioned as in the above paragraph are
alarming signals to the company. It is because it is related with sustainability leadership. The
company as found in the annual report is losing its market supremacy in terms of leading
sustainable business practices. It also shows that companies such as Woolworths Holdings
Limited need to find ways to deal appropriately with integrated reporting framework. There is a
need to identify strategies to respond to problems. Until and unless there are no absolute
solutions to problems as obtained by applying integrated reporting framework, this won’t be
much of helpful in attaining the operations objectives.
Reference
Woolworthsholdings.co.za 2019. [online] Woolworthsholdings.co.za. Available at:
https://www.woolworthsholdings.co.za/wp-content/uploads/2018/09/WHL-2018-Integrated-
Report.pdf [Accessed 30 Jan. 2019].