Integrated Reporting Analysis: Impact, Benefits, and Limitations

This report delves into the concept of integrated reporting, emphasizing its role in value creation by considering financial, human, social, and natural resources. It explores the core principles, advantages, and disadvantages of integrated reporting, including its impact on communication, strategic thinking, and stakeholder engagement. The report examines the benefits, such as improved decision-making and enhanced business valuation, while also addressing limitations related to accountability and reporting standards. It analyzes the views of authors Flower (2015) and Adams (2015) on the usefulness of integrated reports and concludes with recommendations to enhance the effectiveness of integrated reporting practices. The report highlights how integrated reporting can alter market dynamics by fostering a long-term strategy that addresses social and environmental issues, ultimately contributing to sustainable business and societal development.

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INTEGRATED REPORTING
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Abstract
The overall description of integrated reporting brings us in the value creation process
where the whole concept is underlying. International integrated reporting council advises all
firms to denote all their capital to enable a good value creation. The capitals should include all
the aspects of a business which includes financial, human, social, relationships and natural
resources of a business. Taking to account all the resources in the integrated reporting allows for
a good value creation to the business. The content of this papers is directed towards justifying the
statement by two authors with relation to the usefulness of preparing an integrate report for an
organization. The content of the paper also discusses various advantages and disadvantages of an
integrated report ending with recommendations at the conclusion.
Introduction to Integrated Reporting
Integrated reporting is an activity centered on the integrated thinking that results in a
periodic reporting on the value creation of a firm as time goes. It also focuses on the
communication used in the value creation of an organization. Before discussing the main core of
the paper it is important to get some aspect very clearly to get all the concepts. It is also defined
as a precise way of communication about how an establishment’s plan on how the work is done
imminence. It focuses much in the activities taking place in respect to the internal and external
environment, authority, presentation and projections. Integrated reporting also aims to addressing
the problems associated with an organization or a firm and gives a clear direction towards
improving the value. (ACCA and NBA 2013)
The study problem or question:

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 What is the impact of using an integrated reports within an organization
and its governance?
 Are the claims and views of Flower (2015) and Adams (2015) regarding
the usefulness of integrated reports true?
Benefits of Integrated Reporting
Integrated reporting is reinforced by the international integrated reports council which is
a coalition built of the watchdogs, investors, corporations, standard setters, the certified
accounting professionals and the non-government organization who share the view of better
communication in improving the integrated reporting. International integrated reporting council
have resulted to evolution of cooperate accounting reports. Integrated reporting aims to create on
reporting developments to provide an extended practice of reporting the value created by a firm,
by taking in concern of non-financial possessions such as mortal, social and knowledgeable
resources as a monetary investment. Integrated reporting ensures that all the aspects of the
business are followed to the latter. It does not major with the finance only but other aspects are
also incorporated to improve the value of the firm over the short, medium or a long-term
strategy. (AUASB 2013)
Studies have shown that integrated reporting has a tremendous positive impact on the
companies that get involved in the periodic reporting of the same. Some of the benefits of the
that the companies have gathered include good reputation, a more advanced decision-making
process, breaking down of the internal silos. The benefits stated above are, but a few since the
paper's purpose is to discuss the impacts of the benefits and various limitations of integrated
reporting.

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Better communication has been enhanced by integrated reporting since the in a business
firm various parties constitute driving forward of the activities happening in a business. Having
good cooperation in a company concerning the agreed standards of production and goals set
better communication is enhanced. For instance, a firm will set specific measures to achieve a
goal, bearing in mind that the whole organization constitutes of the internal and external factors
towards production communication must be an essential value to check upon to reach the goal
set. If the transmission in the firm is vertical, it means that the boss must be in a position to
communicate effectively to meet the stipulated goal in the integrated report. Integrated reporting
focusses more on the improvement of the activities a firm has been performing. With this
understanding, all the stakeholders must improve the communication matters to make a step
forward and eliminate stagnation of the business. As seen above integrated reporting has created
an excellent platform for improvement in communication thus good results. (Eccles 2009),
Enhancement of the way an organization thinks, plans and reporting the story behind a
business. Integrated reporting has enabled critical thinking of the organization through the
change of the strategies to be used in converting of the short-term approach to the long-term plan
of a business. For instance, in the business world there exists many goals set to reach a specific
purpose. The potential to achieve the goal whether small or a huge goal changes the way of
thinking. Similarly, the results of a modest goal do not depend on much bothering of the parties
involved since the expected output is not very much demanding. When the expectations of a
business are very high and stipulated to be long-term seriousness, and much effort becomes the
input of taking that task. Integrated reporting is believed to make the firms from the short term
level to the long-term overtime thus improved thinking of the firm and the employees involved
in the firm. (KPMG 2011)

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Offering an opportunity to communicate a clear, concise and integrated story that
explains how value is created over time. Integrate reporting is a venture that coherently allows
for value creation. Knowing how it should run many organizations can deliver precise
information on what they are producing and steps the business is taking to improve the value of
the products to earn more profits at a future date. Literary taking a goal about the what a person
knows best, and he/ she is determined to partake that goal is a result of an excellent
understanding of the content or tasks to handle at any point. Integrated reporting exposes the
organization to seriousness when it comes to working on the various activities out. Thus each
stakeholder of the company is fluent in the duties expected to flow from him/her. With this
regard integrated reporting has resulted in giving an opportunity to improved communication in a
concise and clear manner by all stakeholders. (KPMG 2011)
Management of critical opportunities and building of risks have made the investor and all
the stakeholders of the firm to create confidence when working towards a long-term goal.
Integrated reporting has enabled coming up with reports that have allowed them to perceive
many opportunities concerning to improve the value creation of the firm. Having that in mind the
management can complement them and have a way forward to implementing the opportunities
gathered since value creation is required (Yates 2017). This benefit of integrated reporting has
brought up huge investments and of which are long term. It is evident that integrated reporting
has impacted the presentation of the opportunities out there for grabs by the investors.
Integrated reporting has enabled the producing firms to think holistically according to the
strategies set by them. In all the firms the financial statements are mandatory in setting out what
is expected of a firm or the progress of the same (International Integrated Reporting Council
2013). For instance, in the business world, the anticipated results of production all depends on

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the total cost of the inputs. This determines the production era. With integrated reporting and
taking much concern in the value creation, a firm must think smartly to create a more enabling
environment to produce. This approach has enabled the stakeholders involved in the business to
believe in a more advanced manner to reach the stipulated long term, medium or short-term goal.
Another benefit of integrated reporting is recognition of creating value to improve the
business. It is evident that whenever some amount is added to the existing business, the output
and the results of the company changes drastically (AUASB 2013). Since integrated reporting
involves the creation of value over time, in-depth understanding of the content towards value
creation gets to the stakeholders of the business. Having this knowledge is all the contribution of
having practiced integrated reporting in their prospective industry. It is evident that increasing of
value have been made clear to business owners thus a benefit towards the stakeholders from the
integrated reporting. (KPMG 2011)
Sustainability is as a result of aiming higher from the previous step. Integrated reporting
aids in approval of many suppliers, customers, stakeholders and the society. Having
potentiahuge returns, a business must be extra serious when performing the tasks ahead. Allows
forming of strong bonds with the severe customers, suppliers, stakeholders and the society by
creating trust and credibility towards them. Integrated reporting has enabled the creation of trust
and confidence in the process of invention of value. (KPMG 2011)
Combined reporting has benefitted the businesses in maximizing the potential to transfer
sales, land by providing a better business valuation. The business owner has an incentive to
address the integrated reporting to have skills on how to make the business better (Adams 2015).
Having the company as long term, short term or medium it takes the aid of integrated reporting

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to maximize the business potential. It is evident that integrated reporting has enabled the
business to be on a better base of valuation which yields good fruits over time.
It has also enabled security financing at a reasonable cost compared to other reporting
methods. Among many lenders in the current world will want to know how financial capital has
been deployed in the past and coming years. Integrated reporting has enabled recognition of
future intentions based on a complete strategy and a well-rounded business plan. Those are the
various benefits impacted by the combined reporting. (PWC 2013)
Having the concern with all the aspects pertaining a business creates potential to alter the
market and how companies operate. Mounding a shift in a perspective of meeting a short-term
monetary goal of developing a long-term strategy that will not only commit to the social and
environmental issues but also to sustainable business and society (ACCA and NBA 2013). It is
essential to get a hitch on who is using the integrated reporting before getting to the benefits
associated with the venture. Combined reporting has gained popularity since the establishment of
the international integrated reporting council in the year 2010. In countries like Brazil, it is
performed on a mandatory basis which includes South Africa, and Brazil and research offer
evidence towards integrated reporting in other countries including the United Kingdom, Holland,
Australia, Spain, Japan, Singapore and United States of America. (Ecclesia 2011)
Limitations of Integrated Reporting
Despite the fact that the underlined advantage integrated reporting bears some flaws in
respect to its performance towards the accounting techniques. The experts criticize integrated
reporting framework of the international integrated reporting council. Regarding the fact that it
has abandoned sustainability accounting focusing on value for investor required instead of the
amount of the society. The flaw of integrated accounting chips in due to the focus on the firm

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itself and leaving the community alone. This reporting platform has no clear standards of
reporting. (AUASB 2013)
Integrated reporting does not have a great concern about the accountability, human rights,
and political characteristics thus lowering its effectiveness. According to Rodrigues (2015), the
content of the threes papers is as addressed below. When flower (2015) is compared with the
initial intent of 2011 many limitations are drawn from the same. The limitations majors on the
management accounting performs fabulous great shareholders and divers transformative ability.
Integrated reporting exposes limitations due to a comparison of flower (2015) 0n addressing
sustainability. (flowers 2015)
Another limitation is that integrated reporting was supposed to be the excellent solution
for the framework. However, IIRC did not meet the stipulated objectives it has laid before
concerning the settlement. The most serious failure is an abandonment of sustainability in the
accounting sector in its framework. According to flower (2015), integrated reporting does not
focus on the environment surrounding the investment, but instead, it concentrates on the value
addition of the investors.
The business case is in a wide range of integrated reporting. Signifies a limitation since it
focuses on value creation to increase profits. It does not talk more about the pollution that is done
by a firm upon production. A production firm has consequences to the surrounding environment.
Having majored in the profit maximization side, it leaves much about the climate exposing a
flaw in its framework (KPMG 2011).
Another point of critique is whether integrated reporting can be considered as a parameter
for measuring the sustainability measuring practice. Combined reporting is an accounting
practice intended to man the novel risks and run corporations. The combined report is capable of

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running the risks internally and has no access to the environmental dangers and not advising on
them. Though having the guts to give a future strategy for improving results, there would lack
coherent strategic objective (KPMG 2011).
Conclusion
Based on the above discussion it is evident that Integrated reporting surpasses the
traditional approach of handling silos since It enables a good relationship between the involved
parties in a business. Moreover, integrated reporting is able to connect the internal and the
external information towards making a common goal. Organization should therefore adopt the
use of an integrated reports in order to improve organizational governance but should properly
come up with proper solution to encounter the limitations of using the system.

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