Question

Comment on what you believe an integrated [accounting] report should achieve and what types of issues should be embraced within an integrated report. How should these issues be measured? Is the historical cost model appropriate? How is an integrated report different from a sustainability report? Do you believe the accounting profession is equipped to deal with the issues that should be addressed in an integrated report? Discuss

Answer 1

Integrated Reporting is a concept that has been developed to provide long term value to the society. Integrated reporting requires thinking beyond financial aspect and working towards maximisation of stake holder value, creating a loyal customer base and taking progressive steps towards creating a sustainable enviornment.

Integrated reporting issues are measured not just by the company's financial performance but goes beyond that to measure the impact of a company's performance on the stake holder value, the value it creates for customers, development of intellectual capital and how a sustainable enviornment can be created.

The historical cost model is not that appropriate in this scenario.

Sustainability Report focuses on how the organisation formulates strategies to manage it's enviornmental and social goals. It deals with the company's priorities regarding managing it's social and enviornmental goals.

Integrated Reporting on the other hand deals with a broader concept of how the company creates long term value beyond it's financial goals by maximising stakeholder value, creating a loyal customer base, creating a sustainable enviornment ensuring effective corporate governance.

The Traditional Accounting dealt only with financial results. However, with the changing needs of the society, it has become important to create a system that not only concentrates on financial results but also works on creating a healthier planet and a healthier enviornment. Thus beyond making profit, it is important to create a world where the interest of the stakeholders are maximised. Thus, accounting profession is now becoming more equipped to deal with matters addressed in an integrated report.