Advanced Financial Accounting Report: Integrated Reporting Analysis

This report delves into the realm of advanced financial accounting, exploring key concepts such as integrated reporting, corporate disclosure, and institutional theory. The analysis examines the significance of integrated reporting as a communication tool for organizations, emphasizing its role in conveying both financial and non-financial information to stakeholders, with specific reference to the National Australia Bank (NAB). The report discusses institutional theory's influence on organizational structures and changes, and the importance of sustainability reporting. It also outlines the advantages of integrated thinking and its application in strategic decision-making within financial institutions. The report further outlines the four steps of integrated thinking and its application in a financial services organization. The report concludes by underscoring the significance of financial reporting for informed decision-making and the ongoing evolution of financial practices.

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

1ADVANCED FINANCIAL ACCOUNTING
Table of Contents
Answer to question 1.......................................................................................................................2
Answer to question 2.......................................................................................................................2
Answer to question 3.......................................................................................................................4
References........................................................................................................................................6

2ADVANCED FINANCIAL ACCOUNTING
Answer to question 1
Integrated reporting mainly points out the communication that is visible in a periodic
manner and creates value with increase in time. It is pointed as concise communication on the
strategy of the organisation that creates both short term as well as long term prospects. As per
Flower (2015) the overall performance of the company is represented by the process of
integrated reporting that includes both financial as well as non financial information. There are
many user of National Australia Bank financial report from which one of the main user is
shareholders. The shareholders of National Australia Bank uses their financial report for the
process of integrated reporting and better than corporate disclosure which is mainly performed
by the company. Integrated reporting mainly assist in completing the both financial report as
well as the sustainability report for usefulness of the investors and other stakeholders of the
institution.
The corporate disclosure of organisation is directly related to their effective financial
performance that points out certain decision of capital disclosure. Shareholders are the user of
accounting information. National Australia Bank has published their integrated report which is
mainly derived from the annual report of the organisation. In addition to this, the growing
realisation of integrated report has included their factors that determines the financial as well as
tangible assets which is taken into account for their financial statement along with long term
consequences (Adams 2015). Reporting of financial data in a chronological order is present in
integrated reporting and for this reason, integrated reporting presents a better platform for
corporate disclosure of financial reports.

3ADVANCED FINANCIAL ACCOUNTING
Answer to question 2
Institutional theory is a theory of social structure which includes rules, norms, schemes
and routines to form a guideline of social behavior. It explains the element which is created,
adopted and diffused over time (Stubbs and Higgins 2014). It also helps to form institutional
decisions and activities. It explains why an organization structure becomes so popular and why
the changes occur. It describes two types of institutional pressure that promote changes. First
when new rules are backed by the instrumental changes that can stimulate changes in the
organization. Second pressure of change in economic and political structure has a high certainty
to stimulate changes. Institutional theory has cultural scholarship and legal transplant theories
which provide valuable information on how the organization can resist the changes that occurs
regularly.
Integrated reporting represents the financial and non-financial reporting to form a single
company report which helps to provide a great impact on the non-financial data by showing the
company’s performance on social, environmental and government parameter. Based on the
viewpoint of Cheng et al. (2014) investors and stakeholders have limitation from annual
reporting taking short term approach which meets the needs of investors and stakeholders who
would like to check the company’s performance and stability in the market. The main objective
of integrated performance is to help all the stakeholders to analyze the companies’ ability to
sustain in the market for medium and long term. Integrated reporting helps the financial and non-
financial performance of a company in the following ways:
 Incorporating sustainability in the company to demonstrate its benefit in the core
business.

4ADVANCED FINANCIAL ACCOUNTING
 Communicating the effects of company operation on environment and its community and
different ways to achieve them.
 Identifying the risk and opportunities to take competitive advantages.
 Taking of important decisions to improve all its performance.
 Identifying the cost saving techniques from both financial and non-financial prospective.
 Combining different department to create a streamlined organization.
 Increase contact with internal and external stakeholders for balance reporting.
 Increase goodwill and customer loyalty.
Integrated reporting comprises of both pull and push factors which allows the stakeholders to
give a greater level of encouraging to them to help the company to adopt integrated reporting. It
analyze the companies’ level of control on various forms of capital to increase or decrease the
stock of various forms of capital (Frias‐Aceituno et al. 2014). Sustainability reporting is a kind
of report that is published by an organization which mainly consist of economic performance,
environmental performance, social performance as well as governance performance. It also
includes the generation of collected data which mainly helps the company for its overall
improvement along with commitment of sustainable development (Serafeim 2015). Both
external stakeholders as well as internal stakeholders is considered for improving the
sustainability development with its reporting for better quality of sustainable reports.
Answer to question 3
Integrated thinking is a process and condition that includes decision making, reporting and
management based on some connective factors that affect the organization ability to create value
over time. It is a decision making process creates balance between two opposing variables.
Integrated thinking is founded on integrated reporting whose importance was considered in the

5ADVANCED FINANCIAL ACCOUNTING
international integrated reporting framework that helps in strategic decision making and daily
operation for an organization (Churet and Eccles 2014). It connects performance with purpose by
identifying, monitoring and executing business decision for long term period. It builds the need
of competitiveness and growth within a business to take advantage of the opportunities and face
challenges in the market. The four steps in the integrated thinking are as follows:
 Define different aspect of a problem.
 Finding the relationship between the related and unrelated part of the problem.
 Creation of a structure that defines the relationship between the two previous steps.
 Finding the decision and the ways to reach it.
National Australia bank limited is a financial service organization operating globally and is
one of the major Australian financial services which provide quality service and product to build
a good relationship. It explains why an organization structure becomes so popular and why the
changes occur. They provide various banking and financial services to individuals and
businesses (Higgins, Stubbs and Love 2014). Management and decision section in the NAB
report demonstrate the integrated thinking which is a part of management control system for
providing business information and this information forms the report or statement designed to
assist the management by providing precious and timely information.

6ADVANCED FINANCIAL ACCOUNTING
References
Adams, C.A., 2015. The international integrated reporting council: a call to action. Critical
Perspectives on Accounting, 27, pp.23-28.
Cheng, M., Green, W., Conradie, P., Konishi, N. and Romi, A., 2014. The international
integrated reporting framework: key issues and future research opportunities. Journal of
International Financial Management & Accounting, 25(1), pp.90-119.
Churet, C. and Eccles, R.G., 2014. Integrated reporting, quality of management, and financial
performance. Journal of Applied Corporate Finance, 26(1), pp.56-64.
Flower, J., 2015. The international integrated reporting council: a story of failure. Critical
Perspectives on Accounting, 27, pp.1-17.
Frias‐Aceituno, J.V., Rodríguez‐Ariza, L. and Garcia‐Sánchez, I.M., 2014. Explanatory factors
of integrated sustainability and financial reporting. Business strategy and the environment, 23(1),
pp.56-72.
Higgins, C., Stubbs, W. and Love, T., 2014. Walking the talk (s): Organisational narratives of
integrated reporting. Accounting, Auditing & Accountability Journal, 27(7), pp.1090-1119.
Serafeim, G., 2015. Integrated reporting and investor clientele. Journal of Applied Corporate
Finance, 27(2), pp.34-51.
Stubbs, W. and Higgins, C., 2014. Integrated reporting and internal mechanisms of
change. Accounting, Auditing & Accountability Journal, 27(7), pp.1068-1089.