The Role of Integrated Reporting in Shaping Corporate Reporting

This essay critically examines the proposition that integrated reporting is the future of corporate reporting. It discusses how integrated reporting offers a framework that provides extensive information, including financial data, organizational structure, and strategic positioning, to stakeholders. The essay analyzes the shortcomings of traditional corporate reporting, which primarily focuses on financial statements, and argues that integrated reporting provides a more comprehensive view by incorporating non-financial information, such as environmental and social impacts. It explores the benefits of integrated reporting, including improved transparency, better stakeholder engagement, and enhanced decision-making. The essay also considers the challenges and limitations of adopting integrated reporting, referencing studies and reports, including the practices in Malaysian companies, and concludes by emphasizing the importance of integrated thinking and a holistic approach to corporate reporting for long-term sustainability and value creation.

Running Head: Management Accounting
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Project Report: Management Accounting

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Contents
Introduction.......................................................................................................................3
Analysis............................................................................................................................3
Conclusion........................................................................................................................9
References.......................................................................................................................11

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Introduction:
Integrated reporting is a framework which offers huge number of information in order
to represent the financial information, organizational structure and the strategically position
of an organization to its stakeholders. It offers the information to the stakeholders which are
used by them to understand the risk associated with the business and get those measurements
of performance in short, medium and long term. Integrated reporting is a corporate
communication process which results in presenting the integrated report to the stakeholder in
order to communicate about the overall performance of the business (García-Sánchez,
Rodríguez-Ariza and Frías-Aceituno, 2013).
Integrated reporting represents that the financial statement alone are not sufficient in
order to present the information and performance of the organization to its stakeholders.
Integrated reporting makes it easier for the business to prepare the information in better
manner and present them to stakeholders of the business in order to manage the overall
performance of the business. Better reporting in a corporate could lead to the business
towards better capital allocation and it is also promising towards the market driven
approaches of the business and the overall performance of the business (Frias‐Aceituno,
Rodríguez‐Ariza and Garcia‐Sánchez, 2014). In the rapidly increasing market, integrated
reporting would surely improve the level of corporate reporting and offer better information
to the stakeholders of the business.
Corporate reporting is an essential means through which the companies communicate
and share about their steward obligation and accountability to their stakeholder. This paper
mainly takes the idea that how the integrated reporting would be the future of the corporate
reporting in an organization. The main focus has been done on that area where the future
development in the corporate reporting takes place and how the integrated reporting would
help the corporate reporting to be better.
Currently, the financial reporting is the main reason behind the corporate reporting
but along with the time, a new practice has been evolved in the corporate reporting which
depicts to brief and expose all the information about the internal changes and the external
impact on the business (Tapscott and Barry, 2009). Mainly the corporate reporting is based
on the financial and non financial reporting of the business.
Analysis:

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Atkins and Maroun, (2015) explains that the corporate reporting is a report which are
announced and published by the companies in order to present all the financial and non
financial information of the company to its stakeholders. Corporate reporting is built on the
premises to offer the proper information about the entity to its internal and external
stakeholders. Integrated reporting makes sure that the business become able to offer that
exact inform nation and all the relevant knowledge about the business to its stakeholders.
currently, the investors have focused not only on the financial performance of the
company but also on the environmental and social impact of an organization is also asked
from them which helps them to evaluate the overall performance of the business and make
better decision about the position of the company. A research from Krzus, (2011) explains
that the current structure of corporate reporting is not enough in an organization to meet the
entire need and demand of the stakeholders and thus the integrated reporting structure must
be followed in the business.
In various countries and multinational corporations, companies are required to include
the significant non financial information in their corporate reporting. But the companies do
not provide this information with clear link and the relation with economical driver, social
and environmental impact. It has been investigated by Eccles and Krzus, (2014) that in near
future, the success of the company would be dependent more on the ability to create the value
without misuse the natural resources and with the better and transparent information about
their entire activities in their reporting. Meanwhile, the stakeholders of the business would
also look for the process and the strategies of the business to meet the financial and non
financial performance goals of the business.
Flower (2015) further explained into his study that companies which are engaged with
the integrated reporting process would have a greater access to transparency and better
information about the internal and external changes in the business. The Integrated reporting
structure makes it quite easy for the management of the business to prepare a better corporate
reporting structure and present it in front of the stakeholders of the business to assure them
about the position and the performance of the business.
Besides it, there are relevant and understandable information, present in the
business which is required to be known by the stakeholders to identify and evaluate the
overall performance of the business. But this information is not provided by the business in
current corporate reporting system. Thus it becomes important for the corporate to changes

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the structure and adopts the integrated reporting structure in the business. This structure
would improve the competitive advantages in the business through saving the cost; improve
the operational efficiency, market position and brooder environment. As well as, it would
also help the business to adopt the differentiation strategy and set better level at the
marketplace.
the companies which are engaged with IR or the companies which are planning to
adopt the IR system has been studied and it has been found that the integrated processes and
the information standard of the business get improved and it helps the stakeholders of the
business to reach over a conclusion at right time (Brown and Dillard, 2014). This information
set a based for the stakeholders along with the right mix of all the information, collaboration
and transparency of the information and position so that the unethical elements could be
reduced and the main goal of the stakeholders and business could be achieved.
The IASB deduced in its Conceptual Framework updates in 2010 that, in building up its
models for broadly useful budgetary revealing, it is proper to think about the requirements of
the more extensive network of investigators or other capital suppliers, for example, obligation
speculators and credit and value examiners. This brings into centre the requirements of the
investor through the eyes of various gatherings engaged with the investigation of the
organization's budgetary articulations (Stubbs and Higgins, 2014). This examination is then
utilized by investors and helps the working of the capital markets. Nonetheless, the IASB
thinks about that while different gatherings, for example, prudential controllers may likewise
observe broadly useful answering to be of premium, extra data can be looked for by those
controllers past the data that would for the most part hold any importance with capital market
clients of IFRS money related proclamations. Such controllers can likewise make their very
own changes in accordance with money related data announced under IFRS, to fill their own
particular needs. In May 2015, the IASB distributed an Exposure Draft, Conceptual
Framework for Financial Reporting, where the IASB reaffirmed its choices taken in the 2010
Conceptual Framework with respect to the essential gathering of people or clients of money
related revealing.
While the IASB centres around capital market clients of monetary revealing, other
approach producers and standard setters allude to a much more extensive gathering of
gatherings, either formally or casually. Progressively, the impact of different partners with an
enthusiasm for an extensive variety of social, ecological or different issues is brought into

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advancements in revealing either specifically or by affecting administrative changes
(Abeysekera, 2013).
The integrated reporting not only helps the external stakeholders but it also helps the
internal stakeholders to get the summarized information about all the activities of the
business and make better strategically planning on the basis of that. Besides it, Thomson
(2015) has also added that the integrated reporting process involves the relevant and
understandable information from the business which is available to the internal management
of the business only and quite important for the other stakeholder of the business as well.
This information involves information about internal and external sources of the business.
Through this informational and the integrated process, internal and external analyst of the
business could easily identify the overall performance of the business and make better
decision about the company’s position.
The study on the Malaysian market represents that the integrated reporting has not
been adopted by the big corporate of the country. Bursa Malaysia’s top 30 company’s annual
report has been studied and it has been found that the framework of the companies is against
the integrated reporting. Malaysian business has the basis structure of corporate reporting but
it is a long way for the companies to improve the structure and follow the IR framework to
improve the overall reporting structure.
The report of international integrated reporting council has disclosed that most of the
Malaysian companies have started disclosing about their key activities and elements but still
there is huge change which would be done by the companies in order to improve the
performance of corporate reporting of the company. The integrated reporting framework is
the future of the corporate reporting (Adams, 2015). It could offer the better framework to the
corporations to improve the overall performance of the company.
The main requirement and the expectation of the stakeholders from the corporate
reporting of an organization are to identify the various financial and non financial aspects of
the business which also involves the integrated thinking mindset. Integrated reporting makes
it easier for the business to offer the same and achieve the level of “integrated thinking”
mindset as in this process, the companies report beyond the financial plans and the process of
the business (De Villiers, Rinaldi and Unerman, 2014). It focuses more on the outcomes of
the business rather than the output from the reports of the business.

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Incorporated Reporting Framework proposes that their organization report ought to
incorporate these following key components: external environment, organizational overview,
system and asset allotment, plan of action, openings and dangers, administration, execution
and future standpoint. "As per PwC investigation, 90% of the organizations give an abnormal
state vital vision yet just 33% of the organizations incorporate their key needs data in their
yearly report. Organizations development demonstrates that just 20% of them reaction to the
market patterns. 43% incorporate their term of plan of action however just 7% were
unequivocally connect the model towards the esteem creation. Just 10% give understanding
on corporate administration exercises and 27% report their main risk (Flower, 2015). In the
mean time, it is just 40% that connected their key execution markers (KPIs) to their
methodology.
These examination, demonstrates that how frail are organizations in Malaysia forcing
IR in their detailing. Thus, as a venturing stone, PwC start to distinguish the most basic non-
money related dangers and openings which will frame the reason for the organization's
esteem creation. Other than organizations will decipher these non-monetary components into
a quantifiable configuration to encourage track and analyze execution after some time. These
markers will unmistakable between present moments, medium and long haul needs (Cheng,
Green, Conradie, Konishi and Romi, 2014). Finally, the organization arranging need to
reflect what the organization needs to accomplish inside their time spans and their express
subtle elements ought to be upheld and reflected in the organization's statement of purpose,
procedure, KPIs and focuses by the partners and it must make an incentive to them.
Ongoing improvements demonstrate that organizations' activities and conduct are not
just influenced by laws and directions; nor are they free from different variables, for example,
speculators and customers' weight, general feeling, legislative issues, assurance and morals.
Today, numerous organizations view themselves as dynamic individuals from society which,
consequently, implies that they are growingly considered responsible for their activities (and
in some cases deficiency in that department).
Specifically, the accompanying patterns have influenced the manner in which
organizations are seen, judged also, considered responsible by a bigger partner gathering of
people:

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• All the stakeholders want to get different information and corporate affairs of the
business
• From the funds of pension to extremist speculators and socially dependable financial
specialists, investors
 differentiate and request upgraded straightforwardness on a developing number of
issues
• Groups that customarily just had a constrained enthusiasm for corporate revealing and
 in this manner a more latent job, for example, workers, networks, social gatherings,
have
 ventured up their craving for data and impact
• With globalization, a bigger number of (potential) colleagues and partners
 are occupied with more data on a more extensive scope of corporate undertakings from
a bigger (Adams and Simnett, 2011)
 number of nations
• Companies are required to act morally inside the general public they work in. For
instance,
 with worldwide supply chains, organizations are even anticipated that would play out
their own due
 steadiness to guarantee that their colleagues likewise act morally and don't undermine
 their image esteem or permit to work
Corporate reporting at present spotlights on capital suppliers including value investors,
obligation suppliers and different banks, and consequently is straightforwardly connected to
budgetary detailing. Be that as it may, maybe thus, it is neglecting to recognize the way that
the gathering of people is developing. Any improvements in corporate detailing ought to be
intended to address the requirements of more extensive partner gatherings.
Society is driving organizations to survey their execution in manners that go past
exclusively capital and benefit (Jensen and Berg, 2012). While the gathering of people of
corporate revealing has officially extended essentially, it is probably going to keep
developing, changing and enhancing later on. With the end goal to address the changing

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needs of a more extensive and more powerful gathering of people, it is important to survey
how improvements in corporate announcing can give more valuable data to them (Flower,
2015).
On the basis of the study, it has been found that the integrated reporting makes it
easier for the internal and external stakeholders of the business to make better decisions for
the betterment of the business. the reporting process not only helps the external stakeholders
but it also helps the internal stakeholders to get the summarized information about all the
activities of the business and make better strategically planning on the basis of that. Besides
it, corporate reporting structure of the business requires some changes which could be done
through the framework and structure of the business. It has been found that the integrated
reporting process involves the relevant and understandable information from the business
which is available to the internal management of the business only and quite important for the
other stakeholder of the business as well ((Frias‐Aceituno, Rodríguez‐Ariza and Garcia‐
Sánchez, 2013). This information involves information about internal and external sources of
the business. Through this informational and the integrated process, internal and external
analyst of the business could easily identify the overall performance of the business and make
better decision about the company’s position.
Conclusion:
On the basis of the entire report, it has been identified that the companies could
improve the reporting structure and framework through adopting the integrated reporting
structure of the business. The future of the corporate reporting is annual report+ suitability
which has been presented in better way in the framework of the integrated reporting and thus
it could be concluded that the integrated reporting is the future framework of the business.
Companies could improve their performance and the communication level of the companies
could also be improved through the integrated reporting firework of the business.
On the basis of the study on various reports, journal articles, study etc, it has been
found that the main requirement and the expectation of the stakeholders from the corporate
reporting of an organization are to identify the corporate and financial aspects of the business
so that the level of the business could be evaluated and better decisions could be made.
Integrated reporting makes it easier for the business to offer the same and achieve the level of
“integrated thinking” mindset as in this process, the companies report beyond the financial

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plans and the process of the business. It focuses more on the outcomes of the business rather
than the output from the reports of the business.

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References:
Abeysekera, I., 2013. A template for integrated reporting. Journal of Intellectual
Capital, 14(2), pp.227-245.
Adams, C.A., 2015. The international integrated reporting council: a call to action. Critical
Perspectives on Accounting, 27, pp.23-28.
Adams, S. and Simnett, R., 2011. Integrated Reporting: An opportunity for Australia's not‐
for‐profit sector. Australian Accounting Review, 21(3), pp.292-301.
Atkins, J. and Maroun, W., 2015. Integrated reporting in South Africa in 2012: Perspectives
from South African institutional investors. Meditari Accountancy Research, 23(2), pp.197-
221.
Brown, J. and Dillard, J., 2014. Integrated reporting: On the need for broadening out and
opening up. Accounting, Auditing & Accountability Journal, 27(7), pp.1120-1156.
Cheng, M., Green, W., Conradie, P., Konishi, N. and Romi, A., 2014. The international
integrated reporting framework: key issues and future research opportunities. Journal of
International Financial Management & Accounting, 25(1), pp.90-119.
De Villiers, C., Rinaldi, L. and Unerman, J., 2014. Integrated Reporting: Insights, gaps and
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Eccles, R.G. and Krzus, M.P., 2010. One report: Integrated reporting for a sustainable
strategy. John Wiley & Sons.
Eccles, R.G. and Krzus, M.P., 2014. The integrated reporting movement: Meaning,
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Flower, J., 2015. The international integrated reporting council: a story of failure. Critical
Perspectives on Accounting, 27, pp.1-17.
Frias‐Aceituno, J.V., Rodríguez‐Ariza, L. and Garcia‐Sánchez, I.M., 2014. Explanatory
factors of integrated sustainability and financial reporting. Business strategy and the
environment, 23(1), pp.56-72.

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Frías-Aceituno, J.V., Rodríguez-Ariza, L. and García-Sánchez, I.M., 2013. Is integrated
reporting determined by a country's legal system? An exploratory study. Journal of cleaner
production, 44, pp.45-55.
García-Sánchez, I.M., Rodríguez-Ariza, L. and Frías-Aceituno, J.V., 2013. The cultural
system and integrated reporting. International business review, 22(5), pp.828-838.
Jensen, J.C. and Berg, N., 2012. Determinants of traditional sustainability reporting versus
integrated reporting. An institutionalist approach. Business Strategy and the
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Krzus, M.P., 2011. Integrated reporting: if not now, when. Zeitschrift für internationale
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Stubbs, W. and Higgins, C., 2014. Integrated reporting and internal mechanisms of
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Tapscott, D. and Barry, B., 2009. Grown up digital: How the net generation is changing your
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Flower, J. Critical Perspectives on Accounting, 27, pp.18-22.