University Financial Accounting Report: Integrated Reporting Analysis

This report provides a comprehensive analysis of integrated reporting, focusing on its benefits and implementation within the context of financial accounting. The report begins by identifying the major users of financial reports, such as shareholders, and highlights the information they require, including both financial and non-financial performance data. It then examines the role of institutional theory in justifying the adoption of integrated reporting, discussing concepts like isomorphism and decoupling. The report further explores integrated thinking, a key component of integrated reporting, and outlines the steps companies need to take to achieve it. Using the 2018 Annual Report of VicSuper as a case study, the report demonstrates how the company has addressed these aspects. The analysis covers VicSuper's approach to managing its finances, its external environment, and its strategies for integrated thinking. The report also discusses the importance of stakeholder needs and how integrated reporting can help meet those needs. This report provides a detailed overview of the financial aspects of integrated reporting, its impact on stakeholders, and its alignment with stakeholder requirements. The report uses the provided annual report to analyze the use of integrated thinking by VicSuper.

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
Question 1..................................................................................................................................2
Question 2..................................................................................................................................2
Question 3..................................................................................................................................4
References..................................................................................................................................6

2ADVANCED FINANCIAL ACCOUNTING
Question 1
One of the major users of financial reports of VicSuper is the Shareholders.
Shareholders of every company require certain information on the company’s performance
on both the financial and non-financial areas. Shareholders are considered as the half-owners
of the companies and this creates the need for them to acquire information on both the
financial performance and position of the companies in order to make decision on whether
the sell the shares or to retain them. The financial information needed by them is the financial
information from the income statement and balance sheet along with other financial
information. In addition, they need information on the non-financial performance of the
companies (De Villiers, Unerman and Rinaldi 2014).
The 2018 Annual Report of VicSuper has a section named “MANAGING OUR
FINANCE” and this section includes the financial information for assessing the financial
performance and position of the company for the last two years such as total assets, total
liabilities, total revenue, profit and other financial information (vicsuper.com.au 2019). In
addition, the section named “OUR APPROACH’ includes information on the performance of
non-financial aspects of VicSuper like supporting employees, commitment to responsible
investing, addressing climate change issue, role in the community and others. This indicates
towards the crucial aspect that the 2018 Annual Report of Integrated Report of VicSuper
provides both the financial and non-financial information on the performance of the company
to the shareholders (vicsuper.com.au 2019). This makes integrated reporting a better platform
for corporate disclosure for the users of financial statements.
Question 2
Institutional theory has a relation with integrated reporting as the components of this
theory are important to defend the adoption of integrated reporting by the corporations.

3ADVANCED FINANCIAL ACCOUNTING
Institutional theory demonstrates the influence of cultural, economic, educational, financial
and political natures on the business organizations; and there are similarities in the disclosed
policies of a company with its competitors (Marquis and Qian 2013). The components of this
theory can also be used for justifying the adoption of integrated reporting in VicSuper. It is
crucial to mention that Isomorphism and Decoupling are the dimensions of institutional
theory which are used for defending the reasons for justification.
Isomorphism – There are three branches of isomorphism which are Coercive, Mimetic and
Normative; and these are discussed below for justifying the reason for VicSuper.
As per coercive, the pressure from the stakeholders create a major force on the
corporations to alter their institutional practice since the corporations have large reliance on
those stakeholders. The key stakeholder groups of VicSuper are members, employers,
employees, community, government and others because the operations of the firm have large
degree of reliance on these stakeholders. Different stakeholders have various need of
information; and it is not possible for VicSuper to provide all the demanded information
through annual report. This develops indirect force on VicSuper to prepare integrated report
that provide the scope to present all this information to the stakeholders through its six
capitals (Stubbs and Higgins 2014).
Mimetic indicates towards the propensity of the corporations of copying or following
the business practice of other corporation for gaining the required competitive advantage
which is crucial for eliminating insecurity (Peters 2019). It needs to be mentioned that the
other companies that operate in the same industry in which VicSuper operate may have
already adopted the mechanism of integrated reporting that is a major reasons behind the
adoption of integrate reporting by VicSuper. This provides the companies with competitive
advantage while maintaining the goodwill of business.

4ADVANCED FINANCIAL ACCOUNTING
Normative indicates towards the group norms to adopt certain institutional practice
that create forces on the companies to adopt certain business practice. For VicSuper, this can
be considered as a key reason for the adoption of integrated reporting. To many business
sectors, integrated reporting is considered as a best practice of sustainability reporting and the
same cane be happened with VicSuper since the firm had to face certain pressure to adopt
integrated reporting because it is considered as a best practice within the industry in which
the company operates (Keohane and Martin 2014).
Decoupling – As per this concept, corporations aim at profit maximization by adopting
integrated reporting as the adoption of the same strengthens their environmental and social
image. In this manner, more customers attract towards the company that eventually leads to
the maximization of profit. The same could be the reason behind the adoption of integrated
reporting in VicSuper since the adoption of the same would increase its revenue and
profitability due to strengthen their environmental and social image by increasing its value to
the key stakeholders (Peters 2019).
Question 3
Integrated thinking is a key part of integrated reporting which makes the business
organizations able in taking into account the relationship between operating as well as
financial units as well as the capitals that are used by the companies (Churet and Eccles
2014). Integrated decision-making is a major outcome of integrated thinking that helps in
creating value for short, mid and long-term. Business organizations can achieve integrated
thinking by breaking down the silos while enhancing the understanding on how value is
created with in the organizations. There are five states companies need to go through in order
to achieve integrated thinking; they are to understand issue of sustainable development to
external environment, identify issues related to sustainability development having impact on

5ADVANCED FINANCIAL ACCOUNTING
value creation, strategy development, to develop connectivity and governance and to prepare
integrated reports (Higgins, Stubbs and Love 2014).
As per the management discussion and analysis section of the integrated report of
VicSuper, the company has identified the material risks of their business that can affect the
value creation process under the section named “Identifying and Managing risk”. After that,
under the section named “Our external environment”, the company discusses about the major
issues in sustainability development within the organization (vicsuper.com.au 2019).
VicSuper has mentioned about its adopted strategies under the section named “Our strategy”
where it has mentioned the assistance of integrated thinking in its strategies. Lastly, the
company has developed its integrated report while taking into consideration all these aspects
(vicsuper.com.au 2019). Therefore, it is visible from the above analysis that VicSuper has
followed all the crucial steps for achieve integrated thinking and this shows the use of
integrated thinking to the full extent by VicSuper (Dumay et al. 2016).

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References
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.
De Villiers, C., Unerman, J. and Rinaldi, L., 2014. Integrated Reporting: Insights, gaps and
an agenda for future research. Accounting, Auditing & Accountability Journal.
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). Taylor &
Francis.
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.
Keohane, R.O. and Martin, L.L., 2014. Institutional theory as a research program. The
Realism Reader, 320.
Marquis, C. and Qian, C., 2013. Corporate social responsibility reporting in China: Symbol
or substance?. Organization science, 25(1), pp.127-148.
Peters, B.G., 2019. Institutional theory in political science: The new institutionalism. Edward
Elgar Publishing.
Stubbs, W. and Higgins, C., 2014. Integrated reporting and internal mechanisms of
change. Accounting, Auditing & Accountability Journal, 27(7), pp.1068-1089.
Vicsuper.com.au. 2019. Annual Report 2018. [online] Available at:
https://www.vicsuper.com.au/~/media/files/about-us/reports/2018-annual-report/
vicsuper_annual-report-2018.pdf [Accessed 11 Sep. 2019].