The Explanation of the Integrated Reporting - Assignment Example

Name: Lecturer: Course name: Course code: Date Q1). Types of information that need to be captured from now in order to meet the requirement of integrated reporting. Integrated report is a clear statement that shows the way a firm is going to attain its tactical plan as well the corporate ascendancy, forecast and performance of the company within external situation perspectives. In recent years, many companies were seen to be performing well when it publishes its books of account as well as paying dividend. But this is not the case any longer. The companies are suppose to prepare the books of accounts as well as adopting the concern on environment and also observing ethical standard in ensuring that the community living around are as well are satisfied. (CIMA, 2011) Therefore for a company to attain its integrated reporting fully, some factors such as sustainability report need to be incorporated. This report was in isolation with the IFRS standard in that a practitioner was only mandated to prepare the books of accounts in conformity with IFRS while an independent consultant will draft a sustainability report. (IIRC, 2012).but with the integrated reporting framework this is not the case because this framework will have everything incoporated into one repoert meaning that there will be supplementary data such as the data of the sustanainbility report,quantyfying human capital and many more factors to be taken care off that practitioner will be mandated to keep in order to fully implement the integrated report. (CIMA, 2011) But form now on; an integrated report would command practitioners to also prepare the sustainability report also report on whether the social and intellectual capital as well as understanding potential securities exchanges commission safeguards. This are considered some of the extra information practitioners needs to keep up to date so that credible and reliable integrated report is generated that gives a true and fair view of the general position of the company either financial or non financial at the report date. Q2). Justify interaction of integrated reporting and other communications. Yes I do agree with the statement because In order to guarantee a comprehensive and reliable integrated report, it is deemed necessary to link the communication such of financial statement and the sustainability report to this process because some segment will appear in both the integrated report and the sustainability report and thus it is prudent to ensure that an exact figure is derived which will not mislead the readers of the company statement of performance. In the current era, many companies are supposed to adopt the international financial reporting framework (IFRS). And thus it will be unavoidable to ignore integrated reporting process because a focused companies will adopt this process immediately and it will be seen in the market as an advanced company because it adopt reporting standard that incorporate the full range of concern. (S, 2012) Linking the information to integrated report would facilitate creation of a good sustainability report because corporate social responsibility in business is not all about eradication of harmful effects or compliance with environmental safeguards but accepting sustainability concerns the way a company would create a value. The way a company will report its value is impacted by the manner in which an emergence of sustainable valuation creation is depicted. And therefore practitioner ought to pay attention on manner in which concerns of the social responsibility are well taken care off and accounted for as well. Q3). Six categories of capital used in integrated reporting and its justification A different form of capita that is used to finance the company to earn more income inform of profit exists for different companies. In integrated reporting, capitals are categorized into Financial, Manufactured, Relationship and Natural, Human, Social and Intellectual. But all this form of capital is not necessary considered of paramount importance in preparing the integrated reporting because they are not equivalent to the respected academic and skilled literature. There is no clear distinction for example between the intellectual capital and the social capital and thus it would lead to complexity and confusion in clearly defining the company main source of capital. Capitals are deemed as company’s inventory variables but flows capacity is considered necessary either in qualitative manner or in unfeasible to account. (CIMA, 2011) I don’t agree with the approach to use of capital in this context because they seems puzzling and a decision is based on this by the practitioner, then the company over permanence and image perceived by stakeholders would be misleading. Therefore my opinion is to focus much more on capital inflow variables which will be appraised and examined in a consistent manner and pay less attention to stock variables because they are subject to variation and it will be difficult to determine factors affecting it and the best method of stock valuation to be placed on. Q4). Initiatives current being taken on a global perspectives Integrated report is still at infancy stages and efforts are being made by International Integrated Reporting Council to ensure that the status quo of the It is recognized globally. Some of the initiatives currently being undertaken are, the IIRC is partnering with major corporate reporting field like financial market institution, key companies and auditing and accounting firms in order to have a pilot project. This will aim at ensuring that any weakness is eliminated and thus to guarantee quality integrated report framework. (S, 2012) Supplementary support has been backed up from signing a letter of considerate currently among principal global bodies such as Global Reporting Initiative (GRI), World Business Council for Sustainable Development and International Federation of Accountants. These bodies will aid in presenting corporations with necessary leadership on the way in which to recognize substance sustainability issues to be examined and administered as well to get companies well equipped for the integrated judgment process. In this case, element of resistance to change and viewing integrated reporting as a complex and confusing structure is eliminated and made easier and straight forward as far as international financial reporting framework is concerned. Some countries such as South Africa and Sweden have mandated those company listed in the securities market to assume the integration reporting framework. This will eventually boost the implementation of this framework because for any company with a forward thinking mind will be under obligation to adopt the integrated reporting process. Also any company that want to make it shares public, will be forced to abide by the rule of the securities market where any company which is listed in the stock make should appreciate the integrated reporting framework. This will lead to familiarity with the process by practitioners and hence making the process easy, adopted by companies as well as even expounding the same to other countries. Q5). Reasons why integrated reporting may not be achieved within a short time As much as integrated reporting looks helpful, some factors might trigger its adoption and it may take long for companies to appreciate this framework. Some of the major setback integrated report framework is facing are. A). critics Opponents would always mention limitation in the integrating report in order to benefit themselves rather portraying a factual depiction of the report to the company potential investors. remedies available is to seek external assurance of non financial presentation but this approach is not yet fully implemented because it might be difficult to appraise an onward looking statement since it is hard to predict future uncertainties. (Delloitte, 2013) Also it has been recently observed that a consultant of sustainability report argued against adoption of integrated reporting framework on the ground that sustainability report would be absorbed by the Integrated Report and thus they will not earn a living any longer from the same. This are the constraints that will inhibit adoption of integrated report within a short time because it will take a lot of time in responding to such issues and other questions raised by other international bodies. B).complexity, Though integrated report may be perceived as a simple and fantastic process in hypothesis, the reality is that many practitioners would end up having a hard time in implementing the process. Even a straightforward process such as establishing what area of performance to focus on ( features to quantify and report in the statement) , might demonstrate intricacy because it is complicated to gather information that is deemed pertinent to the company and considerable in convincing the company shareholder’s verdicts. This circumstance would pretense challenge to emergence of this framework and incoporation of the same by companies because accountant will find it confusing.(Delloitte, 2013) C.) consistency and entirety. The integrated reporting considers consistence and reliability as improved by mechanical such as strong internal reporting, correct investors commitment and sovereign external assertion. But this statement is deemed tricky because a suitable method to guarantee reliability is both a real and brief regulatory structure and set of safeguards in which the statement is based on or by external assessment practices. If the integrated report is going to be linked to current audited statements, then there should exist a clear and suitable approach to connect the statistics that is made available in the integrated report with the audited records.The framework defines that there will be a varying report from one entity to the other but again comparability is abridged to industry . This will hence pose difficulty in evaluating when and to which degree the report is in agreement to this framework or how the company potential investor would be able to rely on the verdict. (IIRC, 2011) Reference CIMA, P. &. (2011). In Tomorrow’s Corporate Reporting: A critical system at. Delloitte. (2013). In integrated reporting a better view? IIRC. (2011). In Towards Integrated Reporting: Communicating Value in the 21st Century. IIRC. (2012). In Integrated Reporting – The Pilot Programme 2012 Yearbook: Capturing the experiences. S, D. (2012). In long way to go to intergrated reporing . Read More