Analysis of Integrated Reporting in Accounting: Framework and Impact

This report provides a comprehensive overview of integrated reporting (IR) in accounting, focusing on its framework, relevance, and impact on corporate strategy and stakeholder engagement. It explores the IR framework, established by the International Integrated Reporting Council (IIRC), which emphasizes timely and clear communication on a firm's governance, performance, and strategy to create wealth. The report examines the benefits of IR, including its focus on value creation, the inclusion of various stakeholders, and its role in long-term strategic planning, using Coca-Cola as a case study. The report highlights the importance of IR in both public and private firms, detailing its impact on strategy, resource allocation, and overall business models. The report also discusses the concept of 'six capitals' which include manufactured, natural, human, financial, intellectual, social and relationship capital and its significance in creating value and promoting sustainable practices. The conclusion emphasizes the need for firms worldwide to adopt IR, aligning financial statements with the six capitals for a comprehensive annual report.

Running Head: INTEGRATED REPORTING IN ACCOUNTING 1
Integrated Reporting in Accounting
Student`s Name
Institutional Affiliation

INTEGRATED REPORTING IN ACCOUNTING Page 2 of 9
Integrated Reporting in Accounting
Introduction
Integrated reporting framework regarding corporate reporting is a periodic, timely and
clear communication on the firm`s governance, performance, strategy as well as the prospects
that result in the creation of wealth within a short period, medium term and with the long-term
gains. It does not only restrains itself to the organization`s financial performance but also covers
the scope of other value association information and it is reliable in giving a broader context of
information related to the results of operations of the business. Although the information
gathered from Integrated Rreporting, it is essential for decision making when it comes to capital
allocation and it also benefits most of the stakeholders in the organization because it completes
the financial as well as sustainability reports. The IR framework concept was established in
December 2013 by the founders of International Integrated Reporting Framework including
Alex Malley, who intended to satisfy the investor's appetite for comprehensive information
pertaining to performance of the organization (Bernard & Kaya, 2016). The IR framework
detailed four substantive reasons; the relevant information concerning accounting which includes
the relationship between IR and other data, the audience, value creation, capital and those
charged with management and governance. The Coca Coca company has adopted IR in their
annual reports.
The Relevance of IR Framework in the Current Corporate World
The framework is very appropriate in the sense that the focus of the presentation of
information is not to give a summary but the relationships between IR and other accounting
information. The data can be formulated in line with the existing reporting or can be independent

INTEGRATED REPORTING IN ACCOUNTING Page 3 of 9
report as long as it observes the norm of identifiable data. It can be expressed as a response to the
established statutes and requirement like management commentary which is relevant in a country
like Australia with active consideration, e.g., CPA Australia guide the usage of IR according to
compliance of listed companies like Coca Cola company that deals with beverages. The,
however, serve the long term due to the full coverage from one sector to another (Bartocci &
Picciaia, 2013).
The contemporary business entities should adopt the IR framework because it does not
only serve the investor, as it is the case with other reports, but it also helps all the stakeholders.
The customers, business partners, employees, regulators, policy makers, local communities, as
well as the legislators, are the audience of the information because the primary purpose of the
integrated report framework is to give clarity on the manner in which a firm create wealth and
other related information (Bartocci & Picciaia, 2015). The tactic have in Coca Cola company
emerge in New York Stock Exchange due the clarity of its information. The investor's needs are
gathered in the, but IR is so accommodative that the other parties are united for by inference.
The worth and value creation of the company is determined and explained in the IR
framework. The concept gathers for the what is meant by ʻvalue creationʻ by the company that it
is the wealth that is shown by the transformation, decrease or increase over time as a result of the
company`s economic activities as well as the output. J Paul Austin, the CEO of Coca Cola
acknowledges the use of IR in the company have had tremendous impact. The information under
the concept outlines the benefits of the organization, cash flows, the achievements of the firm`s
goals, the total capitals as well as the composition of value creation for the firm and others.
Value consists of two related aspects (Villiers, 2014). The nature of the cost for the benefit of the
company itself that give financial fulfillment to the capital providers and the creation of value for

INTEGRATED REPORTING IN ACCOUNTING Page 4 of 9
the benefit of the stakeholders and the community at large. Furthermore, the framework also
outlines the circumstances under which value is diminished or preserved and the relationship
between the two and value creation at the span of time, i.e., short, medium or long term
(Camilleri, 2017).The comprehensive coverage of the value creation and capital make integrated
reporting most convenient to the companies like Coca Cola to adopt during their annual
reporting.
The role of the managers and executive officers like J.Paul Austin in Coca Cola
company in ensuring the success in Integrated Reporting by promoting the presentation and
disclosure of information. Their participation and acknowledgmentof their responsibilities in the
process contribute a great deal to the credibility of the disclosure as well as the whole Integrated
Report and the content in the report. The governance, according to the IR framework, is
obligated to ensure effective leadership by being in charge of both the identification and
monitoring of workers participating in Integrated Report. The governing body should involve
their overall mind in the creation together with the presentation of IR and failure to which will
interfere with the credibility and integrity of the report.
Application of Integrated Reporting in Public and Private Firms
Most of the listed companies all over the world have adopted IR because of its ability to
combine entirely the firm`s value initiators- governance, strategy, a performance well as the
prospects and how they work together to realize the objectives of the company. Unlike the
custom reporting which focus on backward into the economic results, IR focuses on the manner
in which the companies like Coca Cola execute aspects of capital such as natural, social and
relationship capital and intellectual in their strategies in the future. The framework accesses the

INTEGRATED REPORTING IN ACCOUNTING Page 5 of 9
state of the company and its capability to handle its plans in realizing their long and medium
gains as well as its sustainability. The clarity on the focus of elements contained in Integrated
Reporting has enabled companies both in the private and public sector to manage their activities.
Strategy and resource allocation, achievement and performance of the objectives, challenges and
outlook of the firm, governance and value creation among other aspects of IR have become very
instrumental in creating objectivity and clarity of roles in the running of the companies ("CSR
Benefits to Society from Private Companies Are Greater than from Public Companies," 2018).
Coca Cola Company, the second largest bottling company, released an Integrated
Reporting which was termed as` The best is yet to come`. The report pays attention to economic,
financial, environmental as well as social parameters of strategy and performance. The report
highlighted the progress of the company in line with Integrate Report. The firm gained and
maintained the value or volume in 20 of 24 evaluated markets out of which 15 states it realizes a
continuous increase in the volume of shares. However, in history , the company registered a
decline in working capital that represented 21% improvement from the year 2012.The amount
the company used to produced a litre of beverage, that represent an inrease of 23% from the yaer
2004. A 10 on-site Combined Heat and Power (CHP) plants and 5 more yet to be established in
coming two years. Over 2.1 people took part in the company`s lifestyles programmes and the
firm invested in community programes in 2.5% of pre-tax gains. The report by the company,
which was very inclusive and exhaustive, followed the guidelines of International Integrated
Reporting Council (Mokhov & Ryabukhin, 2018).
The Coca Cola among other companies were analyzed by performance and achievement,
outlook and challenges, opportunities and risks, resource allocation and strategy, operation
model, governance structure and operational overview. Some statistical tools used, e.g., content
analysis, means of disclosure score, T-test and standard deviation showed that there were no
noticeable differences in the reporting of the economic position and performance in both the
private and public firms (Soyka, 2013).

INTEGRATED REPORTING IN ACCOUNTING Page 6 of 9
The Impact of IR on Strategy and Control on Firms` Business Models
The theory around IR is meant to adjust the corporate world in many ways through the
change in the mindset of the players in regards to the parameters of financial reporting. First, the
framework is exemplary when it comes to its emphasis on long-term strategic planning. The
executives, board members, and managers are geared to focus on the long-term gains and hence
plan accordingly by employing a variety of tools to achieve their objectives. The outcome is
beneficial to not only Coca Cola but also the community around the establishment, unlike the
short-term mentality which has led to the destructive environmental effects that have ruined the
business reputation. The companies which are adopted short-term plans in their transactions have
violated human dignity and damage the surrounding to make quick benefits (Galbreath, 2014).
The concept on ʻsix capitalsʻ which inculcate manufactured, natural, human, financial,
intellectual, social and relationship capital, is considered the basis of the creation of value during
the preparation of IR. The concept promotes the maintenance of natural resources, as the
company is required to give the impact on the environment and the measures taken in
maintaining the resources (Lodh, 2018). The managers are forced to learn the six-capital so that
they can get access to the performance, outline risks as well as developing strategy. Also, the
concept incorporates the inclusion of a wide range of players that contribute to the creation of
wealth like the employees, customers, regulators and the local community that participate in
Coca Cola (Johnston, 2013). The development of Integrated Report has somegains that include a
future focus on strategy, full acquisition of information that are required to make informed
decisions and the affordability, availability, and quality of six capitals and their associated risks.

INTEGRATED REPORTING IN ACCOUNTING Page 7 of 9
Conclusion
To sum up, it is evident that Integrated Reporting as proposed by International integrated
reporting councils (IIRC) is the concept that should be used in not only the transactions in
business but also in the annual reporting of the performance and financial position of the
company. The idea applies to both the public corporation as well as the private corporation in the
contemporary corporate world. The management and the stakeholders should therefore include
and adopt the elements of financial statements and six capitals to run the business and give a
comprehensive annual report on the firm. The theory of IR focuses mostly but not entirely on the
long-term strategic planning that aims at creating a win-win situation for the stakeholders. Its
concern about long-term gains and the attention given to the six capitals contributes to the
preservation of the environment and the natural resources. IR has changed the mindset of the
financial managers across the world with Coca Cola company as well as Australia and India
companies serving as the examples of countries which have embraced the concept and therefore
it is recommended that the framework should be adopted by firms across the world.

INTEGRATED REPORTING IN ACCOUNTING Page 8 of 9
References
Bartocci, L., & Picciaia, F. (2013). Towards Integrated Reporting in the Public Sector.
Integrated Reporting, 191-204.
Bartocci, L., & Picciaia, F. (2015). Towards Integrated Reporting in the Public Sector.
Integrated Reporting, 191-204.
Bernard, D., Burgstahler, D., & Kaya, D. (2016). Disclosure Incentives and Data Availability
for Private Firms: Implications for Comparisons of Public and Private Firm Financial
Reporting Quality. SSRN Electronic Journal.
Bui, B. (2015). Management control systems to support sustainability and integrated
reporting. Sustainability Accounting and Integrated Reporting, 121-148.
Camilleri, M. A. (2017). The Integrated Reporting of Financial, Social and Sustainability
Capitals: A Critical Review and Appraisal. International Journal of Sustainable
Society, 9(4), 1.
CSR Benefits to Society from Private Companies Are Greater than from Public Companies.
(2018).
Galbreath, J. (2014). Strategy in a World of Sustainability: A Developmental Framework.
Handbook of Corporate Sustainability.
Jhunjhunwala, S. (2014). Beyond Financial Reporting-International Integrated Reporting
Framework. Indian Journal of Corporate Governance, 7(1), 73-80.
Johnston, M. (2013). Corporate strategy. Long Range Planning, 30(6), 947-948.

INTEGRATED REPORTING IN ACCOUNTING Page 9 of 9
Lodh,S.C.(2018).conventional accounting in determining an enterrprise wealth: sign or
referent a theoretical discource for augmentation, international journal of Critical
Accounting.inderscience,(in press)
Maroun, W. (2013). Determinants of reporting. Sustainability Accounting and Integrated
Reporting, 76-89
Mokhov, V., & Ryabukhin, M. (2018). Sustainable development program «COCA-COLA
HBC RUSSIA». Investment and innovation management journal, (4), 68-72.
Soyka, P. A. (2013). The International Integrated Reporting Council (IIRC) Integrated
Reporting Framework: Toward Better Sustainability Reporting and (Way) Beyond.
Environmental Quality Management, 23(2), 1-14.
Villiers, C. D. (2014). The future of sustainability accounting and integrated reporting.
Sustainability Accounting and Integrated Reporting
.