BAO3309 Research: Integrated Reporting Analysis Based on IIRC & CPA

This report provides a detailed analysis of integrated reporting, focusing on the role of the International Integrated Reporting Council (IIRC) and referencing the CPA Australia report, "AN EXPLORATION OF THE INFORMATION NEEDS OF SELECTED STAKEHOLDERS OF INTEGRATED REPORTING." It discusses the IIRC's function in improving data quality and promoting integrated thinking, management, and actions. The report also examines the research findings of the CPA report, addressing stakeholder information needs, stakeholder engagement, comparability, quality, and usefulness of integrated reporting. Furthermore, it explores the guiding principles of integrated disclosure, including stakeholder relationships, materiality, conciseness, reliability, completeness, consistency, and comparability. Finally, it compares general purpose financial reporting (GPFRs) as explained in the IASB and the International Integrated Reporting Framework, highlighting their similarities and differences in terms of value creation and stakeholder identification.

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

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Abstract
The main purpose of the assignment is to discuss different types of information that
need to be presented in front of the shareholders by companies. In this assignment, it is
important to understand how integrated reporting can be used during integrated thinking as
well as reporting cycle that results in dynamic and competent allotment of capital, will act as
a force for accessing sustainable practices and financial constancy. In addition to that, IIRC is
one of the reporting council that brings together activities as well as include representatives
from investment, corporate, accounting securities, and regulatory, standard-setting and
academic sectors along with the civil society. The Basic motive of an integrated report is to
describe to the providers of financial capital the mechanism of company for creation of value
within given time frame.

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Table of Contents
Abstract......................................................................................................................................1
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Answer to Question 1.............................................................................................................3
Answer to Question 2.............................................................................................................5
Answer to Question 3.............................................................................................................6
Answer to Question 4.............................................................................................................8
Answer to Question 5.............................................................................................................9
Answer to Question 6.............................................................................................................9
Conclusion..................................................................................................................................9
References................................................................................................................................10

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Introduction
The integrated reporting can be referred to as the basic change basis in the process in
which the corporate entities are reported and managed to the stakeholders. The purpose of the
integrated reporting as stated is to maintain the integrated process of decision-making and
thinking. The Integrated thinking can be described as the Framework of the active
consideration by corporate entity associations between the different practical and operating
units along with the capitals that the enterprise implements or uses. The main aim of the
integrated reporting is to make sure that the incorporated thinking and treatment cycle that
results in dynamic and efficient allocation of capital, will act as a force for attainment of
sustainable practices and financial stability.
Discussion
Answer to Question 1
The International Integrated Reporting Council which is also known as IIRC that was
previously referred to as the “International Integrated Reporting Committee” was established
in the year 2010 in the month of August and the primary rationale of the same is to generate
an accepted structure that is globally established for a development that results in
infrastructure by the government for creation of value within specified time frame. The
“International Integrated Reporting Council (IIRC)” unites a cross section of agents from
investment, financial and corporate securities, and regulatory, construction of standards and
academic sectors along with the civil community. It constitutes of a “Steering Committee”, a
“Working Group” and a three performance personnel that deals with the element of
engagement, enhancement, interactions and governance. The IIRC chairman is Mervyn King,
King “Committee on Corporate Governance” and Ex-Chairman, “Global Reporting
Initiative”.
According to Flower (2015) the basic role of the “International Integrated Reporting
Council” which is even referred as IIRC for the improvement of the data quality accessible to
supplier of economic capital to facilitate a more competent and creative allocation of capital.
It also provides a more consistent and resourceful approach to the community exposure that
draws on different aspects of reporting and discloses the extent of the wide factors that affects
materially the capability of a firm for creation of value within specified time frame. The
“International Integrated Reporting Council” which is referred to as IIRC that enhance the
stewardship and accountability for the extensive base of capitals manufactured, accounting,

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academic, human, communal and relationship, and ordinary and encourage the knowledge of
their interdependencies (Dumay et al. 2016).In addition to this it supports the incorporated
thinking, management and actions that focuses on the value of creation over the short, long
and medium term.
The IIRC framework has the establishment concepts and principles that supervise the
complete integrated report content. The integrated report represents the process on out the
strategy of the organisation, performance, governance, and prospects that lead to the value
creation. As Thomson (2015) highlights that there is no presence of standards for the above
mentioned elements and the document focuses significantly at the private sector region but it
could be incorporated for not-for-profit firms and public sector too.
The key motive of an integrated document is to address the supplier of financial worth
the mechanism of the company for creation of value within specified time frame. The
integrated document as per their model provides an opportunity to all the stakeholders who
are looking forward to the capability of the firm to generate value. This is inclusive of the
customers, employees, partners of business, suppliers, local societies, regulators legislators,
and policy creators, even though it directly does not aim at all the stakeholders. Simnett and
Huggins (2015) contradicts that the ones who provide financial capital can gain a substantial
effect on the capital assignment and tries to assess the assignment at all stakeholders would
be an unfeasible task and would reduce the focus and increase the length of the assignment.
Therefore, this would be opposing to the objectives of the assignment for creation of value
within specified time frame.
Answer to Question 2
The roles of integrated reporting with regards to the following are as follows:
a. Providing information that is relevant to stakeholders: As per the CPA report it
can be found out that theIntegrated Reporting combines financial and non-
financial data within one report, displays the combination between the two,
and addresses about several kinds of capitals (Busco2016). Integrated
Documentation has the probability for offering innovative or improved facts
upon content which is supportive in forming a balanced and holistic view of
performance of the firm. This is assisted by theory of voluntary disclosure,
which argues that a result of the improved explanation and resulting
minimisation in asymmetry of data. That creates an increase trust of the

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investors and self-assurance as well as inflow of accounting capital which has
the ability to minimise the resources cost.
b. Stakeholder engagement: According to the CPA report the integrated
documenting is regarded a major process of making use of the stakeholders. The
development of IR has been developing as IR addresses the connectivity among both
of the parameters (Atkins and Maroun2015). IR even addresses how the stakeholder
has an impact on the capability of a firm to develop and maintain value in the short,
long and medium process. Hence, integrated reporting is the most efficient manner to
develop the confidence of the stakeholders and the investors towards the firm during
the financial emergency and uneven scenario. Additionally, it can be expressed that
IR leads to enhanced relations with all stakeholders and better knowledge of their
desires, stakeholders such as givers of financial capital, researchers and vendors of
information looking for precise information.
c. Comparability of Reporting: The model of IIRC explains that more equivalently
and effective transparency is equivalent to integrated report, due to the fact that, it
develops the quality of the data, minimises asymmetric data and effective
understanding of information. It is for fact, availability of data replicates an increase
in prices of the stocks (Fekadu, Shidhaye, Petersenand Jordans2014).
d. Quality of reporting: The pronouncements make firms clear and developed
corporate policies. Therefore, several corporate managers have the idea that CSR and
sustainability documentation improves corporate policies. Additionally, it can be
explained that IR leads to enhanced relationship with all stakeholders and better
knowledge of their expectations who are seeking authentic information.
e. Usefulness of reporting: The “Integrated Reporting Committee of South Africa
(IRCSA, 2011)” recommends that advantages accumulated towards firms that
disclose IR data to extrinsic stakeholders as “the leadership’s ability to demonstrate
its efficiency, added with the rise in lucidity, could lead to minimised cost of capital
to the organization” in addition to enhanced representation of the financial and non-
financial data for the numerous stakeholders.
f. Users of reporting: The accounting data users are inclusive of the owners and
investors, suppliers, management, lenders, employees, customers, the government,
and the general public, when it arrives to the model of IIRC, it states that states the
users of reporting will be provided with relevant reports with proper in the integrated
report, This would enable to enhance the quality of data, minimise asymmetric data
and effective knowledge of information.

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Answer to Question 3
The CPA document with the guiding principles that assists the integrated disclosure that has
been explained as follows:
a. Stakeholder relationships: The stakeholder’s relationship refers to a group,
individual or an organisation that impacts an organisation or a company. A proper
stakeholder management creates a positive relationship with the stakeholders through
proper management of their expectation and objectives.According to the CPA
report the integrated documenting is regarded as a major channel of making use of
the stakeholders (Thomson2015). The surfacing of IR has been rising as IR indicates
the relationship among both the indicators. IR even defines how stakeholder has an
impact on the capability of a firm to construct and maintain value in the “short,
medium and long-term”.
b. Materiality: The materiality concept refers to the accounting principle that states that
all the minor matters of the organisation are to disregard and the matters that are
significant must be disclosed. Therefore the important matters are regarded as
material items.The IIRC addresses that for the motive of integrated reporting, a
matter is regarded as a process if it is of such significance and magnitude that it could
substantively have an impact on the evaluation of financial capital givers in relation
to the firm’s capability to develop value over the “short, medium and long term”
(Chenget al. 2014). In ascertaining to the fact that whether or not a topic is material,
senior personnel and those accountable with governance should regard whether the
matter substantively have an impact, or has the prospective to substantively affect, the
strategy of a firm, its business structure, or one or more of the capitals that may be
inclusive of financial, production, human, academic, natural, communal, relationship
it impacts or utilises.
c. Conciseness:The International Integrated Reporting Framework explains that in an
integrated documenting the disclosure should be brief while interacting with respect
to the strategy of the firm, governance, presentation, and developments, in the area of
its external atmosphere that creates to the development of value over the short,
medium, and long time frame. The materiality and shortness are the features which
are the “Guiding Principles” in the model of integrated reporting.
d. Reliability and completeness: As per the CPA report the “International Integrated
Reporting Framework” creates a balance among the good and bad data on the
business associated to financial transaction in the method of reporting and
disclosures.

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e. Consistency and comparability: The International Integrated Reporting Framework
allows the comparisons that are to be made over time and with other organisations
and comparison with the prior period. This would enable the corporate entity to
understand the financial position. The IIRC addresses that for the motive of integrated
reporting, a matter is considered as consistent if it is of such significance that it could
sustain the organisation’s capability to generate value over the “short, medium and
long time frame of time consistently.
Answer to Question 4
a) During the process of comparison of the purpose of common point financial documenting
(GPFRs) as explained in the “IASB” and the “International Integrated Reporting
Framework”. As per the IASB framework general purpose financial reporting is asset of
statements of finance that can be used by the board for a broad range of financial activities.
Similarity when it comes to the International Integrated Reporting Framework it in a same
way provides the entities with the similar set of framework of reporting and enable a proper
and sound stakeholders engagement so that they are attracted to invest in the organisation.
However the general purpose financial reporting (GPFRs) as per the IASB framework dies
not consider the time value creation which is one of the primary motive of the International
Integrated Reporting Framework.
b) When it comes to the identification of the users of GPFRs as well as the “International
Integrated Reporting Framework” both have similar process of identification of the
accounting users according to their importance. The accounting data users are inclusive of the
investors and the owners, management, suppliers etc in both of the cases.
c) As per the IIRC it states that for integrated reporting, a process that is considered as
material if it is of such significance and consequence that it could substantively have an effect
the provider evaluation of financial capital with respect to the ability of the firm to generate
value over the medium, short and long term (Dumay, Bernardi, Guthrie, and Demartini,
2016). Conversely, as the “IASB conceptual structure” while ascertaining whether or not a
product is material, senior personnel and those accountable with authority should believe
whether the matter substantively has an impact, or has the ability to substantively impact, the
strategy of a firm, its business structure, or one or more of the capital amount that may be

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inclusive of production, monetary, human, academic, natural, social, association it exploits or
affects.
d) According to the CPA report the International Integrated Reporting Framework in cse od
reliability and completeness it balances between the good and bad news on the business
related to accounting transaction in the process of disclosures and reporting, but in case of
IASB conceptual framework when it comes to reliability and completeness the consideration
is made if the items that are only reliable and complete that is the items which are “ good” in
nature, there is no balance between the good and bad news on the business related to
accounting transaction (Zhang and Andrew 2014). Moreover, theInternational Integrated
Reporting Framework allows the comparisons that are to be made over time and with other
organisations and comparison with the prior period which is similar to IASB conceptual
framework methodology.
Answer to Question 5
The integrated annual report of the four chosen companies namely ABN AMRO,
Waco International, ABSA and HULAMIN LTD of 2016 is unites a cross section of agents
from corporate, investment, financial securities, and regulatory, setting of standards and
holistic sectors along with the civil community. It can be viewed that from all the integrated
disclosers of the organizations that it constitutes of a “Steering Committee”, a “Working
Group” and three taskforces that handles with engagement of the content, development,
governance and interactions. When it comes to the aspects like materiality and comparability
in the company materiality has been implied to disclosures that are qualitative and
quantitative in nature and the information that is available within the report. An item is
looked upon to be a material if it could have an impact on the decisions of the communities
and its stakeholders (La Torre, Valentinetti Dumay and Rea 2018). Moreover in all the
companies of the annual integrated report addresses the interaction among the both
indicators. IR also defines how stakeholder has an impact the capability of a firm to generate
and maintain value in the medium, short and long-term when it comes to materiality and
consciousness. The Integrated Reporting annual report there is a disclosure which is concise
while communicating regarding the strategy of the organisation, supremacy, performance,
and outlooks, in the context of its external atmosphere that lead to the development of value
over the medium, short and long term (Hanlon et al. 2014). The completeness and reliability
in accordance to the integrated documents the there is an effective balances among the good

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and bad news on the business related to accounting transaction in the process of disclosures
and reporting.
Answer to Question 6
The factors of similarity in as per the “International Integrated Reporting Council
(IIRC), unites a cross section of agents from investment, commercial, financial securities, and
regulatory, setting of standards and academic areas along with the civil culture. The common
highlights in the integrated information of the firms have a goal to ensure that the integrated
thoughts and reporting cycle that leads in efficient and productive capital allocation will
perform, as a force for sustainability and financial constancy. As per the IIRC it explains that
for the motive of integrated reporting, a material is looked upon as a consistent if it is of such
significance that it could sustain the ability of a firm to develop value over the medium, short
and long term time frame on a consistent basis (Sierra‐García, Zorio‐Grimaand García‐
Benau2015). In addition to it the factor of IR in the integrated document of the firms even
addresses how the stakeholder have an impact on the ability of a firm to generate and
maintain value in the medium, short and long-term. The integrated yearly reports leads to
enhanced relations with all stakeholders and better knowledge of their anticipations,
stakeholders like the financial capital givers, researchers and vendors of information who are
looking for precise and valid information.
Conclusion
From the above analysis, it is concluded that the basic motive behind preparation of
integrated report is to define to the providers of financial capital as the mechanism of an
organisation for creation of value within specified time frame. In addition to that, the
integrated report as laid under the IIRC frame work benefits actually is helpful for all the
stakeholders who show interest in understanding the fact about the company for creation of
value within specified time frame. Furthermore, stakeholders are the person whose money is
invested in the company and it is required that they remain informed about any changes made
in the organization. Some of the stakeholders are customers, employees as well as suppliers
and local communities. Therefore, the integrated report represents the process on out the
strategy of the organisation, presentation, domination, and forecast for creation of value
within specified time frame.

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