The report relates to the exploration of the information which are based on the various types of the need which are related to the information selected stakeholders for the integrated reporting approach. The main considerations of the present report have evaluated on exploring the claims of the stakeholders and what are their expectations on the IR. The second aspect of the report has evaluated the level of alignment of the stakeholder’s requirements and the expectations of the of the information. The third important consideration of the repot has been further been stated with the inclusion of the various types of the information are seen to be related to the usefulness of the IR in the decision making. Some of the various types of the other section of the report aims to address the various types of the consideration of the reporting which are related to the relevant literature review stating the role of the IIRC. The second part of the study has suggested on the exiting and the potential role of the IR in terms of the information provided to the stakeholders, stakeholder engagement, comparability of the report, quality of the reporting and usefulness to the users of the financial report. It has been further considered that the various types of the concerns in the financial report which is considered with the comparison of the guidelines and the principles which are suggested in the CPA report. These comparisons are seen to be considered with the various types of the information which are based on the materiality, stakeholders, conciseness, reliability and completeness. The latter sections of the report have stated about the objectives about the framework, definition and the objectives for the GPFR contained in the IASB conceptual framework (Eccles and Serafeim 2014).
Role of IIRC
The “International Integrated Reporting Council” IIRC was formed in August 2010 with the aim of creating globally accepted framework which processes the results in the communications by the organizations on the value created over time. The IIRC has also brought the cross section of the representatives of the different types of the corporate investment, securities, standard setting sectors and civil society. It has further consisted of the steering committee and working group with the three main task force related to the engagement, communications and governance. During the formation of the IIRC the main objective has been identified with the consideration and preparation of the report as per the IR framework of 2014. This concept has been further relevant with the necessary consideration of providing concise information about the creating value over time. Post consultation process, the IIRC are published with the version considered in the first version of the IR framework (Bertinetti and Gardenal 2016).
Integrated reporting role for providing the information relevant to the stakeholders
IR is seen to be prepared as per the response to the stakeholder’s groups for enhanced reporting which connects the strategy, risks and the “key performance indicators” along with the financial performance. The IR is also conducive in providing the relevant aspects of the information which are considered with the communicating to the company about considering a holistic view of the interests of the stakeholders. This is expressed by the IIRC with the use of the integrated reporting on the way organization uses the strategy and the governance performance and prospects as per the external environment. Secondly IR provides improved platform for reporting about the relevant areas of the information which are considered as per the improves engagement, relationship and dialogues of the stakeholders. For instance, the customers who care about the sustainability are more committed to the organization (Demartini and Trucco 2017).
Integrated reporting role for engagement of the stakeholders
The cost and benefits of the IR is responsible for deeper engagement and improved relationship with the shareholders and stakeholders. In needs to be further understood that IR is required for a strong commitment in terms of the CEO who is responsible for the appropriate decisions towards the stakeholders. In various cases the implementation of the relevant and important firm specific theories has been addressed with the relative weights assigned to the audience and members. It is further conducive in defining the materials which are discussed in terms of the audience members. The material issues raised by the various types of the stakeholders are also considered as per the indicators issued against the performance (Fried, Holtzman and Mest 2014).
Integrated reporting role for showing the comparability of the reporting
The implementation aspect of the IR ensures the comparability across the different reports. The complete value of the IR can be realized with the considerations of the various types of the situations which are seen to be associated to the consideration of the financial report as a result of the related audit. The reliability factor is considered with the objectivity brought by the third party and the same is reviewed as per the relevant accounting standard practiced as per IFRS or US GAAP. The comparability factor for the information is considered with the various aspects which are seen to be based on the consideration of the standardization of information as per standards and audit procedures which are implemented during preparation of the financial report (Giovannoni and Fabietti 2014).
Integrated reporting role for providing the information on the quality of reporting
The IR framework also works towards improvement of quality of the information which is available for the providers of financial capital and generating more efficient and productive allocation of capital for promoting a coercive and should approach to corporate reporting thereby enhancing accountability, stewardship and creation of value both in short-term and long-term. The model includes some of the qualitative aspects with identifying fundamental concepts, assigning weight to the fundamental concepts and identifying the keywords involved in financial accounting. The research has further considered the qualitative aspect based on IR published in 2013 which is based on evaluating the overall compliance of the content (Bhasin 2017).
Integrated reporting role for usefulness of the reporting
Some of the usefulness of IR has been depicted in terms of better understanding relationship of financial and non-financial performance. In addition to this, the reporting is beneficial in enhancing the internal measurement and control of the systems for generating reliable and timely non-financial performance reports. As the companies need to communicate the non-financial performance based on the strategy and creation of value, the managers are forced to think about the interdependencies and trade-offs between financial and non-financial circumstances. The use of IR is also reliable in increasing the quality of systems and internal controls and monitoring such as COSO (Stubbs and Higgins 2014).
Integrated reporting role for the users of the reporting
Despite of the significant benefit to international corporate and institutional support, IR is evidenced with benefits which are reaped by its users. The users of the IR are able to find a better quality of overall reporting aspects along with increased standardisation across all the relevant accounting standards. In several locations, the users are also benefited with the reducing conflict aspect and finding more familiarity in the accounting standards implemented (Dumay et al. 2016).
Comparing the integrated reporting in respect of the Stakeholder relationships
On comparing the CPA report of IR with stakeholder relationship, it can be seen that IR provides more insight into the organisation’s relationship with the significant stakeholders and takes into account their various types of needs. In addition to this, IR is also conducive in emphasising on the importance of stakeholders providing useful insights into the matter of identifying material issue, developing and evaluating strategies and managing activities which includes accountable responses to material issues and strategies initiatives. The responsiveness of stakeholder relationship is considered with strategy focus, connectivity of information, future orientation and responsiveness and stakeholder inclusiveness (Vaz, Fernandez-Feijoo and Ruiz 2016).
Comparing the integrated reporting in respect of the materiality
As per the CPA report, the material issues have been discussed with relevance to the value creation process among organisations. The disclosure on major matters are usually deliberated about the stakeholders and managerial body with particular relevance to the organisational activities. In several situations, the determination of material process is difficult in nature. However, the IIRC makes it easier for recognition of such issues with the implementation of GRI G4 initiative and CDP initiatives (Vaz, Fernandez-Feijoo and Ruiz 2016).
Comparing the integrated reporting in respect of the conciseness
Based on the disclosures of CPA policy that organisations need to take a balanced approach for IR since achieving the conciseness should not be an expense of other guiding principles of IR framework. Conciseness is one of the key guiding principles in the IR policy and this has been included with four important factors. These factors include, carefully presenting the procedure associated to determination of materiality, having a clear structure which does not interfere with the overall flow of the reporting and explaining the important concepts with clarity. The main importance in the conciseness is also interpreted by disclosing the information which are specific to any organisation thereby avoiding generic phrases (Reuter and Messner 2015).
Comparing the integrated reporting in respect of the completeness and reliability
the important consideration for the reliability guiding principle ensures that an information is free from any errors. There are several types of control mechanisms which are present in both internal inspections and external inspection along with the practices which guarantees reliability in the information. In addition to this, the government structure and organisation is accountable for overall process of producing the IR and functioning of various strategies. Organisation may also decide to include for the disclosure for reliability purposes which may be beyond the scope of functioning activities and strategies (Maroun and Lodhia 2017).
Comparing the integrated reporting in respect of comparability and consistency
For establishing the various factors associated to comparability and reliability of IR, the current assurance opinions are provided with there is nothing significantly wrong in the reporting. Moreover, the required assurance is considered as positive assurance with companies fairly presenting the necessary information on depicting a true and fair view. The data quality in the internal control is further included with the non-financial data which is also helpful in comparability and reliability of information (Oshika and Saka 2017).
Part 4a
Objective of IR with the definition and objective of GPFR as contained in the IASB
The main objectives of IR as stated in the IASB has been depicted with catalysing a more efficient and cohesive approach for reporting standard which strands to communicate full range of factors which are included in the materiality and affect in creating value over time. It has also stated that the objective is seen with promoting integrated thinking, integrated actions and decision-making which emphasises on long term and medium-term valuation. The objective of IR is further depicted with enhancing the overall accountability and stewardship by promoting the understanding of interdependencies between the firm (Izzo and Fiori 2016).
Part 4b
Identifying the users of the IR and GPFR
The scope of users for IR and GPFR can be depicted with both government and private sector entities. Additionally, the users of such a reporting are also inferred with various stakeholders of the companies will look for relevant information based on the standards followed under both IR and GPFR. The users of the GPFR are further depicted with different types of companies for incorporating them into their financial report at the end of each FY. In several aspects, the investors are also considered as outside users of IR and GPFR will look for potential clarity of the disclosures made in the financial statements (Giovannoni and Fabietti 2014).
Part 4c
Conceptualisation IR as per the materiality and IASB CF concept of materiality
The materiality aspect as per the IASB states that materiality depends on the nature and magnitude of any information. An entity is responsible for assessment whether information either in a combine way or individually needs to be included as a material perspective in the financial statements. The material information may be obscured if not clearly communicated.
The materiality in IR varies according to the difference in scope, purpose and audience of financial report. In IR, the various matters related to materiality is considered with important factors affecting the organisations ability in creating short-term, long-term and medium-term value (Giovannoni and Fabietti 2014).
Part 4d
Integrated reporting concepts and IASB as per reliability, consistency, completeness and comparability
The framework assisted by IASB is developed with advising the IFRS concepts which has shown consistent in the disclosed information. The GPFR in the financial report is responsible for identifying the faithful representation of information along with neutrality and freedom from any error. The reliability aspect is also based on the criteria of future economic benefits based on asset, liability, income and expenses.
The various types of concepts set by IR in the aforementioned aspects are ensured with including all the materiality matters with both negative and positive aspects which shows a balanced representation of reliability, consistency and completed in an information (Atkins and Maroun 2015).
Part 5
Comparing the IR with the four companies that appear in the example
The comparison of IR report of four different companies with aspects such as materiality, conciseness, stakeholder engagement reliability and completeness are shown below as follows
ABN AMRO
As per the information published in the integrated report in 2016, the stakeholder information is depicted with describing the stakeholders about the needs, strategies and purpose. Additionally, the stakeholders have decided to make a sustainable contribution to the society. Some of the important consideration of the stakeholder’s engagement is depicted with clients, employees, society at large and investors. The scope of that religion matrix has been compared with 2015 and it shows how in the latest report the company covers all the topics of materiality which matters most to the stakeholders rather than only in areas of sustainability topics. In addition to this, the proposed changes as per IRB has aimed to reduce the complexity of regulatory framework along with improving the comparability and addressing excessive variability of capital requirements for credit risk. The reliability aspect is maintained with reviewing the procedures before the final acceptance (Zhou, Simnett and Green 2017).
Hulamin Ltd.
The IR annual report of the company provides a concise review for sustainable values. The different assertions made as per the IR disclosures of Hulamin Ltd. is depicted with following a relevant stakeholder engagement policy. The social relationship and the intellectual capital is seen to encompass the relationship with communities and group of stakeholders and various networks of the company which promotes innovative thinking. The maturity and comparability concepts are applied with the qualitative and quantitative disclosures. The design of the reporting aspect has further ensured the reliability aspect which maintains the accountability of assets and prevents detection of material misstatements and loss (Mansor, Jamil and Bahari 2017).
AXA
The important observations of the Haryana report in AXA has shown compliance with the relevant principles of conciseness of information. In addition to this, the company has maintained greater predictability of reliability of the financial statements. Some of the other features of the report shows compliance with comparability of information with IFRS and GAAP frameworks. The report is also adhering with the stakeholder engagement with consideration of internal and external stakeholders thereby identifying their risk and opportunities.
Aegon
The reporting aspects as per this integrated reporting have shown several instances of stakeholder engagement with participating in materiality surveys based on geographical balance and the representation. In addition to this, the company is engaged in conciseness of the information with GRI reporting principles and accurate balance of accounts. In order to comply with the principle of comparability it as followed the sustainability reporting as per GRI guidelines. Moreover, the materiality assessment is considered with the components which have significant impact on the long-term profitability on the reputation and operations of the company.
Discussing the factors which may explain the similarities of the differences identified in part 5
The similarities in all the differences identified in the previous section is considered with differences in the principles followed by the respective companies to explain the principles that underpin integrated reporting. For instance, one company has used GRI reporting for comparability while the other company may use GPFR for the same purpose (De Villiers, Rinaldi and Unerman 2014).
Conclusion
The various discussions of the study on IR reporting as per stakeholder engagement is seen with reporting standards which is responsible for improved relationship with the shareholders and stakeholders. In needs to be further understood that IR is required for a strong commitment in terms of the CEO who is responsible for the appropriate decisions towards the stakeholders. The implementation aspect of the IR ensures the comparability across the different reports. The complete value of the IR can be realized with the considerations of the various types of the situations which are seen to be associated to the consideration of the financial report as a result of the related audit. The framework for IR also works towards improvement of quality of the information which is available for the providers of financial capital and generating more efficient and productive allocation of capital for promoting a coercive and should approach to corporate reporting thereby enhancing accountability, stewardship and creation of value both in short-term and long-term. On comparing the CPA report of IR with stakeholder relationship, IR provides more insight into the organisation’s relationship with the significant stakeholders and takes into account their various types of needs. In addition to this, IR is also conducive in emphasising on the importance of stakeholders providing useful insights into the matter of identifying material issue, developing and evaluating strategies and managing activities which includes accountable responses to material issues and strategies initiatives. Based on the disclosures of CPA policy that organisations need to take a balanced approach for IR since achieving the conciseness should not be an expense of other guiding principles of IR framework. Conciseness is one of the key guiding principles in the IR policy and this is included with various important factors.
References
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