“Integrated reporting is the domain of the accountant more than other professions…The judgment and analytical skills inherent in the accountancy profession are the key.”—Paul Druckman, CEO of the IIRC (International Integrated Reporting Council)
What is Integrated Reporting?
In this article from Harvard Business School, Paul Druckman, when asked how he would describe integrated reporting, had this to say, "Integrated-reporting brings together financial and non-financial information in a clear, concise, consistent and relevant format. The goal of an integrated reporting framework is to improve the quality of corporate reporting so companies can provide a more strategic picture of the issues critical to long‑term sustainability and success. Integrated reporting includes information about natural and social capital as well as financial capital. This information provides important insights for those interested in the way a company thinks and acts. The framework should help to create a more cohesive reporting model by highlighting areas where convergence is needed in standards and national regulations."
Our world has become more global, more wide open, more transparent, with full-disclosure and honesty being valued highly from companies by clients, customers, and investors. So it stands to reason that businesses are moving to integrated reporting to show the whole picture of themselves.
The Critical Role of Accountants in Integrated Reporting
The Association of Accountants and Financial Professionals in Business, IMA, in their research study titled From Share Value to Shared Value: Exploring the Role of Accountants in Developing Integrated Reporting in Practice, make it very clear how important an accountants role is in integrated reporting in the following explanation:
"IR both refers to the necessity to be “accountable” and to provide stakeholders with reliable information. These two elements contribute to assimilate IR to accounting. This parallel, reinforced by the presence of many accountants in institutions like the IIRC, has encouraged the design of IR according to accounting pattern. IR implies placing social accounting at the forefront, with the measurement of the six capitals central to value creation. The companies we studied envisioned this opportunity as a way to use accounting to better tie the multiple facets of their activities to a single report. With this in mind, accountants have the opportunity to play a significant role in the development of an integrated report project. An accountant’s role is not confined to the production of the integrated report but rather starts at the outset of the IR project. Accountants can be the triggers of the IR journey, the “champions” of IR projects, and they can help structure integrated thinking in the strategy and value-creation process with their knowledge of multiple accounting tools. Accountants can act as the vector of IR into the organization, and the CFO is often the champion of the IR process within the company."
Read the full report here.
If you are a business accountant, are your clients using integrated reporting? We'd love to hear your answers, and feedback, so comment below and share this post on your social media.