ACC303 Essay: Integrated Reporting Framework Relevance in Australia

This essay examines the relevance of the Integrated Reporting Framework (IRF) in the contemporary corporate world, focusing on its application within Australian companies, particularly Woolworths Limited. The essay highlights the increasing adoption of IR principles by Australian companies, driven by the need for long-term value creation and improved communication with stakeholders. It discusses how Woolworths Limited has benefited from IRF by reducing costs, improving strategic alignment, and enhancing engagement with clients and stakeholders. The essay also acknowledges that while Australia has made progress in adopting IR, there is still room for improvement compared to global standards. Furthermore, it emphasizes how IRF enables companies to provide comprehensive information on their health, challenges, and future opportunities, shifting the focus from past financial results to future prospects and sustainable value creation. The adoption of IR principles has allowed Woolworths Limited to improve its strategic reporting, identify material risks, and enhance transparency, contributing to better business governance and increased stakeholder trust. The essay concludes by highlighting the six capitals (financial, manufactured, intellectual, human, social & relationship, and natural) that constitute the integrated reporting framework and their role in describing the activities and outputs of Woolworths Limited.

Running head: AUSTRALIA COMPANY 1
An Essay on the Relevance of Integrated Reporting Framework to Australia Company
Student’s Name
Institutional Affiliation

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An Essay on the Relevance of Integrated Reporting Framework to Australian Company
The essay is based on contemporary corporate report conducted by KMP in Australia
in the year 2014 as reported by (Atkins & Maroun, 2015). According to KMP report is that
more than quarter of the biggest companies in Australia are currently using integrated
reporting principles in their annual reports. The companies are focusing on how to create
long-term values of IR rather than the short term and medium term values and earning
associated with integrated reporting principles. Hence, Woolworths Limited which is a major
company in Australian Stock Exchange or ASX will be used as an example in this essay.
Woolworths Limited has been listed in the stock exchange for over twenty years, with a good
ranking compared to other companies in the stock exchange market (Beck, Dumay & Frost,
2017).
According to the fourth edition of Australian ASX Corporate Reporting, there is a
significant increase on the number of companies using IR principles. Such a company is
Woolworths Limited that is doing away with the outdated methods of detailing its financial
performance reports (Beck, Dumay & Frost, 2017). Woolworths Limited is being described
as a company that has been using the integrated reporting principles in its boards and
managerial systems which created its suitable working values for both investors, shareholders
and numerous stakeholders. By using the integrated reporting the Woolworths Limited has
cut down its costs related to creation of financial reports. It is because IR removes irrelevant
information and then restructuring the reports by making it clear to different users, which is a
great advantage of IRF to Woolworths Limited.
The report from ASX Corporate that was published by Beck, Dumay and Frost
(2017), outline that in 2017 there was a steady and rapid progress on the adoption of the
principles of IR by twenty-five percent in Australia compared to fourteen percent in the past

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years. From the ASK Corporate report it is deduced that Woolworths Limited was among the
companies that was involve in the steady and rapid adoption of the IR principles because of
its key advantages. In addition, there has been a great upsurge movements of IR in Australian
for the last twelve years such as the AICD who are currently in support of the adoption of the
principles by the Woolworths Limited. The steady adoption of integrated reporting in
Australia by company like Woolworths Limited has been the result of their international
counterparts who have recognize the significant of IR allocations of capital decisions (Sierra-
García, Zorio‐Grima & García‐Benau, 2015). Hence, G100 which is a leading Australian
CFOs and ACSI understand the market trends and opportunity of business that are related
with IRF and, it is in support of Woolworths Limited for adopting the integrated reporting
principles in their annual reports.
In addition, Woolworths Australian Limited is providing the evidence of improvement
on its internal strategic alignments as well as the better and appropriate engagement with
clients, workers and other publics including stakeholders and shareholders which is arising in
their integrated reporting of every year (Atkins & Maroun, 2015). Although, Australian
companies like Woolworths Limited is a good examples that indicating that IR principles are
in progress in the country. Despite of the positive sign of improvement, Australia still as long
way to go because in the globe it is approximately one thousand six hundred companies
which have adopted the integrated reporting.
Under IR Woolworths Limited has been able to provide information on the health of
the company and problematic or problems which are challenging the company as well as the
opportunity it will face in the future (Simnett & Huggins, 2015). The integrated reporting has
help the company to avoid focusing in the examination of past years financial results but
rather on the future results. These including more focusing on the active governance, use of
resource as well as exposure, strategic performance of the company and in the administration

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of the material risks to produce and preserve their creation values. Adams (2015), explained
that Woolworths Limited company traditional annual reports did not have more information
in comparison to the current report which has the more information and data. The current
information in the company reports is sufficient for fully assess of the organization’s ability
in execution of its strategies in the future as well as if the previous earning will be sustainable
in either of the medium or long-term (Sierra-García, Zorio‐Grima & García‐Benau, 2015).
In the Woolworths Limited reports there is an indication that the company has move
to a sustainable financial position and performance, and it is currently including narration
disclosures on the non-financial organization performance. But this is without connecting the
company strategic planning and objectives. By using integrated reporting principles the
company has also been able to show performance versus targets and budgets using its
measurable Key Performance Indicators or KPIs (Simnett & Huggins, 2015). The company
has improved it level of strategies from its reports since, the reports indicates where the
organization is going and where it has come from, either by short term, medium term or long
term. Woolworths Limited discloses its specific ambitions which were underpin by the
company high-level of strategy by giving an appropriate insight of what they are intending to
do in order to deploy the strategy accordingly (Ruiz-Lozano & Tirado-Valencia, 2016).
Woolworths Limited is currently able to identify its material risk as well as the explanations
of how the company is being managed, which has been attained by connecting the risks
associated to the company strategies and objectives, key drivers as well as the future outlook
in Woolworths Limited reports.
The KMP report published by Beck, Dumay and Frost (2017), stated that while
companies in Australia are adopting the IR principles, company such as Woolworths Limited
is still behind other main capital markets values. For instance, there are perspectives of the
leaders of the organizations and other investment companies like Woolworths Limited who

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have realised the benefit of integrated reporting principles within the company (Reuter &
Messner, 2015). However, the same benefits they have shared with their key stakeholders and
shareholders. They have identify IR as the driving clarity of the organization as well as its
alignment all across the company. Thus, Woolworths Limited has seen integrated reporting as
what is significant in the creation value and preservation of long term business values
because it is a drive to better business practices (Flower, 2015).
In addition, Woolworths Limited as also been using the international integrated
framework that was launched in the year 2013, with is main objective of changing the
communication mind-set in the company (Flower, 2015). By, applying this principle of IR the
Woolworths Limited has improved its explanation to financial providers in the capital market
by showing how it is planning to create the value by moving forward (Simnett & Huggins,
2015). The IR adopted by Woolworths Limited goes beyond normal organization financial
reporting needs to an extent that it can require the providence of insights in the company
resources. It also provides the relationships of the influence which the creation of value have
over the short term, medium term and long term on the strategies of Woolworths Limited.
In consideration to efficiency gain and balance of the cost, Woolworths Limited has
implemented the IR because it existing futures such as easier system and protocols
(Thomson, 2015). The system and protocols of the integrated reporting enabled Woolworths
Limited to reduce it cost in making of annual reports. The fact is that IR is built around to
look the connectivity between various elements which creates capital in an organization. IR
also under the control and directions of the business model of reporting that include
invariable, incremental in costs which are associated with the setting up procedures of the
integrated report of the company (Islam & Islam, 2018). Despite of invariables and cost
incremental the establishment of IR by Woolworths Limited has been of beneficial, because it
lead to efficient and even less costly creation of reports. Woolworths Limited Australian

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Company to thrive in the stock exchange ranking because of the business case of doing IR
that improves the quality of the company reporting as well as leading to a better business
governance.
The integrated reporting framework applied by Woolworths Limited constitutes of the
six different components of the capital value that effectively describes the activities and
outputs of the Woolworths Limited (Islam & Islam, 2018). The six capital values include
financials values such as funds availability in the company, manufactured values such as
plant as well as equipment, intellectual values which include trademarks, copyright, systems,
licences as well as patents (Thomson, 2015). Human values including capabilities, standards
and experience, social and relations like communities and the stakeholder or shareholder
linkages, and the final capital values used and has been consider by Woolworths Limited is
the natural which constitutes of both renewable and non-renewable environmental resources.
Despite of capital market boarder reporting, it has been able to provide Woolworths Limited
with great and clear value of creation all around the organization and towards the move of
processing its objectives and building of the company trust (Kundu, 2017). By, embracing the
IR principles Woolworths Limited as been able to increase the value of its thinking and
reporting that are related to six capital.

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References
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