Report on Participation in Standard Setting

Added on - Apr 2020

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PARTICIPATION IN STANDARD SETTINGParticipation in standard settingName of the UniversityName of the studentAuthors noteTHE UNIVERSITY OF GREENWICH
PARTICIPATION IN STANDARD SETTINGIntroduction:The report is prepared to demonstrate critical evaluation of usefulness of integratedreporting. Integrated reporting intends to promote corporate strategy by combining the reportingof non-financial and financial measures. Evaluation of integrated reporting usefulness toorganization has been done by researching and evaluating journal articles relating to integratedreporting. The article that would form the basis of present report is stakeholder perspective fromSouth Africa.It is the first country requiring integrated reporting on wider scale (Adams2015).An integrated report is a platform of accurate communication about performance, strategy,performance and governance of organization that leads to creation of medium, short and long-term value. Integrate reporting has been made a requirement for all listed companies byJohannesburg securities exchange. It is predicted by analyst that there exist strong correlationbetween ability of business and its resilience to create value in short, long and medium term. Inthe initial phase with the introduction of integrated reporting, it was intended to communicatenon-financial and financial information to range of stakeholders, but now it is more focused oninvestors of organization. Several ranges of benefits are provided by integrated reporting toproviders of investment decisions or capita allocation and shareholders. The purpose oflaunching framework of integrated reporting is to reflect genuine challenges faced byorganizations and making reporting by corporate more grounded and therefore they areconsidered useful to investors. Providers of financial capital are provided information about howvalue over time is created by organization (Barbozet al.2013).Discussion:International Integrated Reporting Council:With regard to adoption if global integrated reporting, South Africa has been one ofleading countries. Call for creation of integrated reporting in South Africa evolved frominseparability of sustainability, strategy, performance and governance. A greater context ofperformance indicators should be provided by integrated reporting and such reporting standardshould be capable of clarifying how relevant financial information fits into long term strategy ofbusiness and ultimately providing range of benefits of stakeholders. The continued developmentof South Africa is driven by stakeholder approach of King Reports. The introduction of newP a g e1|12
PARTICIPATION IN STANDARD SETTINGreporting standard has led to researcher focusing on well companies in nation is focusing onpresenting their financial information in an integrated manner (Crowther 2016). However,companies witnessed various obstacles in releasing their integrated reporting despite of makinggood job in creating accessibility to such reporting. Such obstacles comprised of few publishedexample, limited guidance and eruption in uncertainty from potentially on conflicting guidance.Several researches in South Africa have gained little information whether such reportingstandard have gained an understanding of financial information to stakeholders and how they arecommunicated to them. The role of early adopter of integrated reporting that is played by SouthAfrica also comes with several challenges and it also depicts the perception of general public offinancial reporting in country (Brown and Dillard 2014). It was inferred from some of researchthat investors do not rely much on using integrated reporting to make their investment decisions.A number of relevant an informed questions had been raised in the special edition ofAuditing, Accounting and Accountability journal. A research agenda was laid out fromperspective of accounting. It also involved comments on growing academic interest in academicresearch on integrated reporting and gaining of considerable prominence in since the IIRC(International Integrated reporting council) has been formed in 2010 (Zhouet al.2017). From thecurrent literature on integrated reporting, a number of themes can be identified. While integratingthe political nature of standard setting, the emergence of integrated reporting was highlighted asfragile and complex relationship between the parties to the manifestation of its framework. It hasbeen argued by authors that still prevails uncertainty in positioning of integrated reporting in thecorporate reporting (de Villierset al.2014).South Africa has led the field in total number of integrated reporting that is beingregistered in database of GRI. It was because of requirement of all listed companies on theirstock exchange to produce integrated report and because of mandating of King III. In recentyears, some of the close runner of South Africa in publishing integrated report includes Brazil,Australia and Netherland (Dumayet al.2016).The information based on database of GRI depicts some of sectors that are leading inexperimenting with integrated reporting are energy utilities, financial services, mining andenergy. Some other sectors would have perceived to double by the volume of financial servicesP a g e2|12
PARTICIPATION IN STANDARD SETTINGintegrated report. Higher volume of financial services publishing self declared integrated reportsare based in Australia, South Africa and Brazil and low number are based on USA and UK(Flower 2015). Results are more distributed in terms of utilities and energy.Companies in different countries have expressed their intention of publishing integratedreports because of number of reasons and they are listed below:Integration of financial report and corporate sustainability report in one single documentthat depicts cohesion between financial, operational and social actions.Integrated reporting intends to improve information quality that is available to financialcapital providers enabling them to make a productive and efficient capital allocation.It seeks to promote understanding interdependencies between broad base of capitals suchas manufactured, financial, social, human, and natural and relationship along withenhancing their stewardship and accountability.It assist organizations in building practice of financial, environmental, social, governanceand sustainability reporting and making them well equipped with managing their brand,operations and stakeholders reputation and dealing with management of such risks thatwould lead to comprising of long-term sustainability of organization (Frías-Aceitunoetal.2013).Promoting an efficient and consistent approach to corporate reporting and providingplatform for communicating full range of factors by which the organization ability tocreate value over time is affected.Meeting needs of stakeholders, avoiding of internal silos, strategic and natural fit andproviding stakeholders with full information of reporting.Companies have been producing integrated report as it combines financial performancewith information and data on social, environment and governance performance.Integrated reporting depicts information on non-financial key performance indicators(GarcíaSánchezet al. 2017).Combing financial and non-financial performance along with sustainability measuresundertaken by different companies.P a g e3|12
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