Benefits of Integrated Reporting Free-Samples- Myassignmenthelp

Question: Discuss about the Integrated Reporting. Answer: Introduction In the present era, integrated reporting is enhancing the way of strategic thinking, planning and reporting in business entities for clear and concise corporate communication. With this approach, IR is assisting managerial authorities in thinking holistically about making strategic plans, informed decisions and improvement in future business performance (Serafeim, 2015). The present report is focused on the description of the main purpose and key benefits of integrated reporting. It will include evaluation of fact that whether principles and content element introduced by IIRC satisfies the purpose of integrated reporting or not. In the last part of the study, the annual report of Boral limited will be analysed that how effectively they had complied with the principles and a content element provided by IIRC. Main purpose and key benefits of making use of integrated reporting The purpose of integrated reporting: The primary purpose of integrating reporting is to provide qualitative as quantitative information to assist stakeholders those who are interested in the company for value creation. This report aims to provide a justified explanation of providers of financial capital regarding value created by business over time. In the corporate reporting, the historical financial statements are essential as these are for only compliance purpose. However, these reports will not provide meaningful qualitative information refers to the business values (de Villiers, Rinaldi Unerman, 2014). This approach is compensated by integrated reporting through which the users of the information can have to look forward to forecast and projection of the performance company. Integrating reporting will recognise the benefits of showing the value of holistic and fuller picture of the organisation. Benefits of integrated reporting Integrating reporting provides assurance that corporate entity briefly reports regarding the material information which clearly shows that how well company is performing in nonfinancial dimensions which affect the quality of the formulated strategy along with its implementation. It provides a better understanding of the connectivity among financial and nonfinancial performance. It is essential because business entities are required to communicate their nonfinancial performance in strategic context. It results in increasing transparency and greater access to an internal and external source of information to improve both short and long-term Further, it develops improved internal measurement and control systems for generation of reliable nonfinancial information in a timely manner. The information is more streamlined and automated towards the review process and inclusion of facts in the report (Frias?Aceituno, Rodriguez?Ariza Garcia?Sanchez, 2013). Integrating report assist in making a comparison of business performance for the purpose of standardised Stakeholders will have an understanding of business affairs through which they can develop a better relationship with the company. Role of guiding principles introduced by IIRC in accomplishing the main purpose of integrated reporting Long term vision of IIRC is to develop a corporate world in which integrated thinking is entrenched within the mainstream business practice in the public as well as private sectors. This vision is expedited by the approach of Integrated Reporting in the form of corporate reporting norm (Cheng et.al., 2014). Guiding principles and content element introduced by IIRC for integrating reporting are: Guiding principles Content element Strategic focus and future orientation Organisational overview and external environment Connectivity of information Governance Stakeholder relationships Business model Materiality Risks and opportunities Conciseness Strategy and resource allocation Reliability and completeness Performance Outlook Basis of preparation and presentation Guiding principle of reliability and completeness In accordance with the guiding principle of reliability and completeness an integrated report by a corporate entity must comprise all material matters, (positive as well as negative), in a balanced manner and there should be the absence of material misstatement. With this guidance principle, the sequence of integrated thinking and reporting will result in efficient and productive capital allocation, which will provide business financial sustainability and stability. In accordance with the IIRC, the reliability of provided information in the report is directly affected by the factors like balance and extenet of material error (Serafeim, 2015). This aspect ensures that provided information is viable for the use of stakeholders in the process of decision making. Reliability can be improved by usage of mechanisms like effective internal control and reporting systems, internal audit or similar functions, stakeholder engagement and external assurance attained from an independent expert. Re liability and completeness of information in integrating reporting is the obligation of individuals those charged with governance as they are responsible for determination of organisations strategy, performance, governance, and prospects that lead to value creation over time. They are also responsible for the preparation as well as the presentation of an integrated report, by identification and oversight of the workforces which are involved actively in the process (Adams, 2015). This principle states that maintaining an audit trail at the time of preparation an integrated report will help senior management and those charged with governance in review the report and exercise judgement in deciding whether the information is sufficiently reliable to be included. Completeness in integrating reporting comprises consideration of the extent of information revealed and its level of specification. It will involve aspects such as probable concerns relate to cost/benefit, competitive advantage and future-oriented information. Content element of performance In accordance with the content element, an integrated report must provide comprehension regarding connectivity of matters to its ability to create value. Further, the report must contain qualitative and quantitative information regarding the business performance that may include indicators with respect to corporate objectives, risks and opportunities by explaining their importance, implications, and the methods and assumptions used in accumulating them (The International IR Framework, 2013). The report must be inclusive of positive and negative on the capitals from organisational activities, inclusive of material effects on up and down in the value chain capitals. There must be associations amongst historical and present performance, and among current performance and the forecasted organisations position. This principle and content element effectively satisfy the purpose of integrated reporting as it ensures that report contain complete and accurate facts irrespective of aspect that is in favour or in against of business (Owen, 2013). It ensures that reports contain qualitative facts such as future-oriented information and related probable concerns to clarify operational aspects to stakeholders in an appropriate manner. Use of guiding principles introduced by IIRC by Boral Limited By considering the annual report of Boral Limited, it can be said that company had complied with guidance principles and content element introduced by IIRC in the preparation of their annual report. The company had incorporated positive as well as negative financial facts by providing its completed details. For example description of actual loss $12.0 million in significant items and probable losses in the section of the performance (Boral Annual report 2016, 2016). The company had provided equal importance to qualitative factors by adding a section like sustainability overview, corporate governance and shareholders information. Provided information on the company is consistent and comparable as they have complied with applicable accounting framework (The International IR Framework, 2013). Further, the auditor had provided a declaration of independence to ensure professional conduct and provide an opinion that financial report gives a true and fair view and has complied with provisio ns of Corporation regulations and Australian accounting standards. Conclusion Present study shows that integrated reporting is a key driver for global evolution in corporate reporting. The report shows that Boral Limited had appropriately incorporated guiding principles introduced by IIRC. By considering these principles introduced, Boral Limited is able to make effective strategic plans and informed decisions in order to make improvement in future business performance References Books and Journals de Villiers, C., Rinaldi, L., Unerman, J. (2014). Integrated Reporting: Insights, gaps and an agenda for future research. Accounting, Auditing Accountability Journal, 27(7), 1042-1067. Adams, C. A. (2015). The international integrated reporting council: a call to action. Critical Perspectives on Accounting, 27, 23-28. Frias?Aceituno, J. V., Rodriguez?Ariza, L., Garcia?Sanchez, I. M. (2013). The role of the board in the dissemination of integrated corporate social reporting. Corporate Social Responsibility and Environmental Management, 20(4), 219-233. Cheng, M., et.al. (2014). The international integrated reporting framework: key issues and future research opportunities. Journal of International Financial Management Accounting, 25(1), 90-119. Serafeim, G. (2015). Integrated reporting and investor clientele. Journal of Applied Corporate Finance, 27(2), 34-51. Owen, G. (2013). Integrated reporting: A review of developments and their implications for the accounting curriculum. Accounting Education, 22(4), 340-356. Online Boral Annual report 2016. (2016). [PDF]. Available through https://www.boral.com.au/Images/common/pdfs/annual-reports/Boral-Annual-Report-2016.pdf . [Accessed on 6th May 2016]. The International IR Framework. (2013). [PDF]. Available through https://integratedreporting.org/wp-content/uploads/2013/12/13-12-08-THE-INTERNATIONAL-IR-FRAMEWORK-2-1.pdf. [Accessed on 6th May 2016].