Integrated reporting

Integrated reporting makes corporate reporting financial statements more relevant for today’s complex, changing business environment.

In Brief

  • Integrated reporting is a holistic approach that shows investors how an organisation creates value over time.
  • Chartered Accountants Australia and New Zealand has long advocated for integrated reporting.
  • Integrated reporting is voluntary in Australia and New Zealand.

A more holistic approach to corporate reporting

Major business and social shifts in recent decades present challenges for corporate reporting:

  • Reports have become more compliance-focused, longer and harder to use due to increasing business complexity and demands from regulators and investors for more information.
  • Thirty years ago, around 20 per cent of a company’s value was intangible, while now it’s around 80%. As financial statements are mainly based on tangible value, they are no longer able to give investors the full picture.
  • As companies increasingly consult with stakeholders and consider the social and environmental impacts of business, they are producing more reports. Yet there is often no connectivity between the reports, or between financial and non-financial information.

Bringing it all together

Integrated reporting is a more holistic approach to corporate reporting.

It gives report preparers a way to explain to investors how an organisation creates value over time. The goal is to provide investors with the information they need to make more effective capital allocation decisions that facilitate better long-term investment returns.

And an integrated report shows the links between an organisation’s strategy, governance and business model.

What is integrated reporting?

The International Integrated Reporting Council (IIRC) was established in 2010, and its members are regulators, investors, companies, financial standard setters, non-government organisations and accounting professionals, including our CEO.

The IIRC launched the International Integrated Reporting Framework in 2013. The framework outlines the fundamental concepts and principles that underpin an integrated report, and the elements that make up an integrated report. In 2017 a consultation conducted by the IIRC highlighted key questions being asked by integrated reporting practitioners around the world. As a direct result, the IIRC launched answers to the most frequently asked questions on integrated thinking and reporting in 2019 as a part of the IIRC’s two-year programme of technical guidance with more guides to be released shortly.

Integrated reporting is voluntary in Australia and New Zealand.

Episode 9: ESG: The New Space for Impact

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Host John Schol FCA, speaks to former CA ANZ president and Grant Thornton partner Darren Scammell FCA, along with Antz Rohan CA, director at Fairground Limited, about the very real bottom-line benefits that flow from ESG and integrated reporting. They also outline how to go about it, and where the best place is to start.

CREDITS

Guests Darren Scammell FCA, Partner at Grant Thornton Australia

Anthony Rohan CA, Director Fairground Limited

Host John Schol FCA, Chief Executive at Malloch McClean

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