Integrating Financial Information - Essay Example

Consequently, the monetary value of the firm, as expressed through the financial statement, incorporates these factors to ensure that the company is responsible and maintains a healthy relationship with the environment for future success. When a firm fails to provide better services or pollutes the environment, the resulting outcome will affect its reputation and operations, thus threatening its existence.

1. What is the purpose of the integrated reporting council?

The purpose of the International Integrated Reporting Council (IIRC) is to provide a holistic model that gives a comprehensive view of the firm's operations and business strategies. Specifically, the program uses both financial and non-financial information to establish the effectiveness of the business in maintaining a viable and sustainable business environment (IIRC n.p.). As expressed in its vision, the IIRC intends to embed integrated thinking in the business practices to make it a corporate reporting norm that leads to efficient and productive capital allocation. Consequently, this will lead the company to financial stability and sustainability in its operations. Therefore, the purpose of the IIRC is to improve business reporting to restore public trust in businesses, enhance investors’ confidence, and ensure efficient capital allocation in the economy for a sustainable and stable business environment (IIRC n.p.).

1. Why do you think NASDAQ is beginning to require more information on a firm’s corporate governance and environmental activities?

The stock exchange market is a dynamic industry that changes drastically due to various factors such as public perception of the company or a negative assessment of the firm by an external entity. Therefore, for the NASDAQ exchange market to value a business, it must have holistic and comprehensive information about the company. Specifically, that does not only mean its financial performance but also its nonfinancial activities that are crucial in determining its future performance in the stock exchange. The profitability of a business depends on strategic management and social relationship with the local community and the environment. Therefore, a breach of this relationship threatens the reputation of the firm and might affect its productivity and profit-making. When the future of the business is at risk, investors are less likely to buy the shares. In such an event, the NASDAQ Company might face serious financial or reputational challenges for conspiracy and lack of transparency in informing its clients about the prospect of the firm in question. For this reason, the NASDAQ Company sees it fit to have both the financial and nonfinancial information about a business to ensure proper information delivery to its clients before deciding to purchase the shares in the stock market.