BAO 3309 Trimester 3: Integrated Reporting in Australia Assignment

This report provides a comprehensive analysis of integrated reporting in Australia, focusing on the role of the International Integrated Reporting Council (IIRC) and the findings of the CPA Australia report. The report explores the IIRC's objectives in developing a common reporting basis for companies to disclose value creation information to stakeholders, including its roles in corporate reporting, information quality improvement, and integrated reporting promotion. It further examines the existing and potential roles of integrated reporting in providing relevant information to stakeholders, engaging with them, and addressing issues such as reporting comparability, quality, usefulness, and user satisfaction, drawing on both the CPA report and relevant accounting literature. The report also analyzes the principles of integrated reporting, including stakeholder relationships, materiality, conciseness, reliability, completeness, consistency, and comparability, comparing them with the CPA report's findings. Finally, it contrasts the International Framework with General Purpose Financial Reporting (GPFR) and examines their respective users, materiality concepts, and the application of principles like reliability and completeness within each framework.

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

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Table of Contents
Answer to Question 1.................................................................................................................2
Answer to Question 2.................................................................................................................3
Answer to Question 3.................................................................................................................4
Answer to Question 4.................................................................................................................6
Requirement [a]......................................................................................................................6
Requirement [b].....................................................................................................................6
Requirement [c]......................................................................................................................6
Requirement [d].....................................................................................................................7
Answer to Question 5.................................................................................................................7
Answer to Question 6.................................................................................................................9
References................................................................................................................................11

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Answer to Question 1
The prime objective of the inception of the International Integrated Reporting Council
(IIRC) is the development of a common basis to report that would assist the companies in
disclosing information to the stakeholders on how they create value through business
operations (integratedreporting.org 2020). The IIRC has certain roles which can be seen
below:
1. Development and implementation of a more robust corporate reporting mechanism for
the companies is a prime role of IIRC. This corporate reporting framework demands
taking into account the material issues within the companies affecting their value
creation process which is a crucial information for the stakeholders (Adams and
Simnett 2011).
2. Identifying the areas within the business organizations associated with corporate
reporting that requires major attention on priority basis is a crucial role of IIRC. It
understands the needs of the stakeholders regarding these issues so that they can be
improved on priority basis.
3. IIRC is majorly responsible to improve the information quality of the companies both
on financial and non-financial matters so that it becomes easier for the stakeholders in
comprehending the actual financial and non-financial performance of those
companies. This is a crucial role that assists to improve the corporate reporting
mechanism of these companies.
4. Promotion of integrated reporting within the companies is considered as a prime role
of IIRC. IIRC does this by interpreting the advantages of the adoption of integrated
reporting within the companies. At the same time, this also helps the stakeholders in
gaining understanding on disclosing financial and non-financial information through
integrated reporting (de Villiers et al. 2014).
5. IIRC plays a crucial role among different parties associated with integrated reporting
in order to reach to an agreement for accepting and implementing the integrated
reporting. Some of these key parties are business organizations, government
authorities, groups of stakeholders, accounting regulators and others.
6. One major role of IIRC is to promote five types of capital within the business
organizations for the demonstration of the organizational value creation process in
better manner. This particular role of IIRC assists in enhancing two crucial aspects
within the organizations that are organizational accountability and stewardship.

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7. Voluntary adoption as well as application of integrated reporting is crucial for the
business organizations to disclose the required financial and non-financial
information. In this aspect, the role of IIRC is to undertake assessment of the areas of
the business operations of the companies where voluntary adoption of integrated
reporting is required.
8. IIRC has a major part to play in the adoption and implementation of integrated
reporting within the organizations. In this manner, IIRC promotes the aspects like
integrated thinking and integrated decision-making within the organizations that help
the companies in disclosing crucial information on the organizational value creation
process (De Villiers, Unerman and Rinaldi 2014).
Therefore, it is evident from the above discussion that IIRC plays a major role in
promoting and implementing integrated reporting within the business organizations through
introducing integrated thinking and integrated decision-making for the betterment of overall
corporate reporting.
Answer to Question 2
a. Providing Relevant Information to the Stakeholders
Various groups of stakeholders have the need of information that is relevant to their
professions or interests. For example, financial information of an organization is pursued by
the investors, creditors and others whereas environmental communities are interested in
environmental issues related information. The presence of both these kinds of information
can be seen in an integrated report that is a single report (García‐Sánchez and Noguera‐
Gámez 2018).
b. Engaging with Stakeholders
Various stakeholder groups acquire the required information through directly
engagement with the business organizations; and this makes an integrated report as the
secondary information source. The key utilization of integrated reports by the stakeholders to
check and verify a firm’s background information for making the engagement decision. This
makes the integrated reports as a confirmation tool by the stakeholders (Lodhia and Stone
2017).
c. Reporting Comparability

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Due to the absence of any uniform structure to present the information, companies
develop their own suitable structure for presenting information in the integrated reports. This
makes it difficult for the stakeholders in comparing one company’s integrated report to
another company’s. Although this does not have major impact on the environmental
stakeholder group, investors and other stakeholders seeking financial information face great
difficulty in comparing the financial information due to this (Stubbs and Higgins 2014).
d. Reporting Quality
As per concerns of major stakeholder groups, the key headings that can be seen in the
integrated reports do not disclose much material information on those issues; at the same
time, most of the integrated reports do not include the indicators on the material issues. This
leads to the lack of substantive information affecting integrated reports’ transparency
(Tweedie, Nielsen and Martinov‐Bennie 2018).
e. Reporting Usefulness
As claimed by certain key stakeholder groups, companies do not disclose much
information on the companies’ environmental, sustainability and governance issues and this
makes the integrated reports responsible for neglecting adequate discussion on their material
problems such as environmental pollution, climate change and others. Lack of information on
these issues affect quality of integrated reporting (Flower 2015).
f. Users of Reporting
As per the claims of many of the stakeholder groups, investors and other financial
stakeholders are being majorly targeted for the development of integrated reports while
neglecting the stakeholder groups such as environmental stakeholders and others. The same is
being claimed by the investors and other financial stakeholders that they are not being
primarily targeted for the development of integrated reports. This creates dissatisfaction
among the users of the integrated reports (García-Sánchez, Rodríguez-Ariza and Frías-
Aceituno 2013).
Answer to Question 3
a. Stakeholder Relationship
This principle of integrated reporting demands from an integrated report to give
understanding on how a company is engaging with its key stakeholders for building a cordial

5INTEGRATED REPORTING IN AUSTRALIA
relationship between them by putting attention towards their interests and necessities.
However, the CPA report findings shows the failure of most of the integrated reports in
putting attention towards the necessities and interest of the stakeholders on primary basis
which creates dissatisfaction among the stakeholders (cpaaustralia.com.au 2020).
b. Materiality
This particular integrated reporting principle demands from the companies to disclose
the material issues or circumstance that influence their organizational value creation process.
The CPA report findings disagree with the principles as the findings state that majority
numbers of the integrated reports of the companies have been developed by ignoring the
material issues affecting the value creation process. Adoption of different structures by the
companies to disclose integrated reports related information is one of the main reasons for
this (cpaaustralia.com.au 2020).
c. Conciseness
This principle of integrated report demands that the business organizations are
required to prepare their integrated reporting in the most concise manner. In line with the
CPA paper findings, there is a major lack of substantive information in the integrated reports
of the companies that contributes to the lack of conciseness in those reports. Moreover, the
absence of proper indicators associated with different material problems makes it difficult to
prepare and present the integrated reports in the most concise way (cpaaustralia.com.au
2020).
d. Reliability and Completeness
This is a crucial principle of integrated report that demands from the companies to
adequately present the positive and negative issues within the integrated reports and to make
sure that there is no error in the process. As per the CPA report findings, inclusion of all the
material issues requires the companies to disclose huge amount of information and thus, the
companies do not disclose these material matters in the integrated reports. This is affecting
the reliability and completeness of integrated reports to a large extent (cpaaustralia.com.au
2020).
e. Consistency and Comparability

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According to this integrated report principle, there must be consistency in the way the
integrated reports are prepared in order to make them comparable to the stakeholder groups.
As described in the CPA report findings, different structures are adopted by the firms in the
integrated reports for the presentation of both financial and non-financial information which
affects comparability of integrated reports along with consistency (cpaaustralia.com.au 2020).
Answer to Question 4
Requirement [a]
International <IR> Framework – It is a specific type of report involves in the
communication of a company’s information on the aspects like performance, governance,
strategy and others for the purpose of creating value. Its core objective is to govern the
integrated reporting through the development of required principles (Dragu and Tiron-Tudor
2013).
General Purpose Financial Reporting (GPFR) – It is a specific type of report involves in
the disclosing a company’s financial information through financial statements. Its core
objective is to assist the users in investment decision making process through delivering the
required financial information (Draft 2015).
Since both the frameworks involve in providing important information of the firms to
make crucial decision about the firms, this needs to be considered as the key resemblance.
The main characteristic of International <IR> Framework is that this involves in providing
both financial and non-financial information whereas GPFR involve in providing only
financial information. Therefore, this is the key difference.
Requirement [b]
Both the International <IR> Framework and GPFRs have different users on the basis
of the kind of information they provide.
International <IR> Framework – Stakeholders who provide the required financial capital
to the companies and the stakeholders who are interested on how the company is creating
value are the main users of this report. More specifically, these users include environmental
communities, investors, creditors, lenders, suppliers, employees, governmental agencies and
others (Serafeim 2015).
GPFR – People who has interest in the financial performance and financial position of the
companies are the main users of GPFRs. More specifically, the users of GPFRs are investors,

7INTEGRATED REPORTING IN AUSTRALIA
managements of the companies, employees, suppliers, lenders, creditors, government bodies,
taxation authority, financial analysts and accounting and financial standard setter bodies.
Requirement [c]
International <IR> Framework – Materiality in this report means the material issues
related information revelation by the companies as these issues influence their value creation
process (Morros 2016).
GPFR – The materiality concept of this particular report states that information that is
material affects the decision making process of the users when it is misstated or omitted
(Draft 2015).
Based on the above discussion, materiality issue in both the reports are the issues or
circumstance that are of key significance to the stakeholders of the companies in different
decision making process. On the other hand, the key difference can be seen in case of the
types of information. Since International <IR> Framework involves in the revelation of both
financial and non-financial information, materially involves both the financial and non-
financial matters that are of major importance to the stakeholders of the companies. However,
GPFRs involve in the disclosure of financial information and therefore, materiality for this
report involves the financial issues or circumstance affecting the decision making process of
the key stakeholders. This needs to be considered as the key difference.
Requirement [d]
The principles of reliability and completeness put the obligations of the business
organizations to include the material issues or matters in the corporate reports that includes
both the positive performance as well as negative performance of the company. The principle
of consistency puts the obligation on the business organizations to utilize the same techniques
in their corporate reports for same time so that they can be easily compared. Users must be
able to compare the acquired information from a company’s corporate reports. It is crucial to
mention in this aspect that the concepts of the above-mentioned principles are the same for
the GPFRs and integrated reports. However, type information disclosed creates the
difference. In case of GPFRs, all these concepts are used for the disclosure of only financial
information; at the same time, these principles are used in the integrated reports for the
disclosure of both financial and non-financial information (Rensburg and Botha 2014). This
creates the main difference.

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Answer to Question 5
The database in the IIRC website has recently added the integrated reports of some
firms. This portion of the report undertakes the analysis of the integrated reports of four of
these companies. Names of the selected companies are Trueworths International, EnBW,
Barclays Africa Group Limited and Vodacom. It can be seen from the above discussion that
there are five guiding principles of Integrated Reporting. Four of these principles are selected
as the base for comparing and contrasting the integrated reports of these four selected
companies; these principles are stakeholder relationship, materiality, conciseness and
reliability and completeness.
Stakeholder Relationship
This particular principle of integrated reporting states that an integrated should
provide insight on how a company is engaging with its stakeholders legitimately by taking
into consideration their needs and interests (integratedreporting.org 2020). It can be seen
from the integrated reports of Trueworth International, EnBW and Vodacom that all these
companies have provided all information on how they have engaged with their key
stakeholders in a table format and this table also includes the main issues associated with
engaging with the stakeholders and how these issues have been resolved
(truworthsinternational.com 2020). However, the integrated report of Barclays Africa Group
Limited does not have any such table that shows the insight of its engagement and
relationship with the key stakeholders. In case of Vodacom, all information regarding
engaging with the stakeholders has been provided in a table format in the integrated report.
These have created the main differences.
Materiality
This principle of integrated reporting shows that the business organizations are
required to reveal information the material matters affecting the value creation process in the
integrated reports (integratedreporting.org 2020). The main similarity among all these
companies is that these companies have disclosed the material matters in the integrated
reports that affect their value creation process (enbw.com 2020). However, difference can be
seen in the manners in which this materiality information has been disclosed. In Trueworth
International, these issues have been disclosed along with objectives and performance against
these objectives. EnBW has discussed about the material topic of their business. Barclays

9INTEGRATED REPORTING IN AUSTRALIA
Africa Group Limited has disclosed divided their material issues into five segments.
Vodacom has disclosed the material issues regarding each group of key stakeholder.
Conciseness
This principles states that the integrated reports should be concise by providing all the
required information on the aspects like organizational strategy, governance, performance
and prospects (integratedreporting.org 2020). Analysis of the integrated reports of these four
selected companies shows that all these four companies have provided all the required
information on their financial and non-financial matters in their integrated reports, but in
different way. There is not any similarity among the structures of the integrated reports of
these companies. Despite of this, the information has been disclosed in a concise manner that
includes information on business, business strategies, material business risks and
opportunities, governance and others (absa.africa 2020).
Reliability and Completeness
This particular principle puts the obligation on the business organizations to disclose
both the positive and negative material matters in such a way so that there is no material error
(integratedreporting.org 2020). It is observable from the integrated reports of the selected
business organizations that these companies have disclosed both the positive and negative
matters of their business in the integrated report that affect the value creation process. These
have been shown in the forms of risks and opportunities for the businesses of these
companies. In addition, these companies have disclosed the areas where they have achieved
the targets along with the areas where they have not been able to achieve the target
(vodacom-reports.co.za 2020). Therefore, major similarities can be seen in the integrated
reports of these companies.
Answer to Question 6
It is observable from the discussion part that the integrated reports of the selected
businesses have certain similarities and there are also certain differences in the integrated
reports of these selected companies.
The main reason for the similarities among the integrated reports of these four
corporations is the adoption of the International <IR> Framework which puts the obligation
on these business organizations to adhere to the same set of rules and regulations for the
preparation of integrated reports. This also implies that the five principles of integrated

10INTEGRATED REPORTING IN AUSTRALIA
reporting need to be adopted by all these four companies. Compliance with the same rules
and principles of the International <IR> Framework has made these companies to take into
account similar types of aspects that need to be included in the integrated reports. All these
aspects have contributed to the resemblances in the integrated reports of these companies
(Higgins, Stubbs and Love 2014).
Along with the similarities, there are many differences in the integrated reports of
these selected companies in the presence of certain key reasons. These reasons are shown
below:
 Apart from the key guiding principles and other information, IIRC has not issued any
uniform structure for the business organizations that needs to be complied with at the
time to prepare the integrated reports. For this reason, these companies have
presented the financial and non-financial information in their own-developed
structure. Since all these four companies have presented the information based on
different structures, differences in the integrated reports of these businesses can be
seen.
 Business organizations always try to display information that indicates towards their
good financial and non-financial performance in order to attract key stakeholders.
This develops the propensity not to disclose the areas with bad performance. This
needs to be considered as another major reason that creates the differences. For
example, when a company is disclosing both the negative and positive information of
their business, another company is only putting focus on disclosing information that
shows only their positive performance. This differentiates the integrated reports of
the companies.
 It is the major obligation of an integrated report to reveal both the financial and non-
financial information of the company. Companies are required to ensure adequate
disclose of information. However, certain companies fail to satisfy this information
need in the integrated reports as they put more emphasis on the disclosure of either
non-financial information of financial information. This affects the balance of
information in the integrated reports. This needs to be considered as major reason for
the differences in the integrated reports of the companies (Owen 2013).

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