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The framework also needs to contain more informed guidance and good examples to strike the right balance between transparency in reporting on the one hand and commercial sensitivity and exposure to risks in respect of forward-looking information on the other
—Richard Martin, head of corporate reporting, ACCA

IIRC framework is on the right path but some areas need to be fleshed out. Investors will benefit from move towards IR

Plans for an integrated reporting <IR> framework are a step in the right direction but need to be developed further, says ACCA (the Association of Chartered Certified Accountants) in its response to the IIRC’s consultation about the way ahead for <IR>. 

In its response to the International Integrated Reporting Council (IIRC) consultation on the <IR> framework, ACCA says its own research, Understanding Investors: directions for corporate reporting,  has shown that many stakeholders would welcome integrated reporting, seeing in it a number of benefits such as a focus on the long term, including a better understanding of  long-term risks to the business model  and wider insights into how corporate value is created, with the added benefit of influencing the way that companies approach their strategic planning and their operational management practices.

Richard Martin, ACCA head of corporate reporting, said: 'The plans for <IR> are right in principle and there is a significant opportunity for the quality of corporate reporting to be improved by giving to investors and others a more complete view of the entity and its prospects over a longer time-frame than is usually covered in traditional corporate reporting.

'However, there remain gaps in the framework that need to be fleshed out. The framework still needs to be fully field-tested, and it would help prospective preparers greatly if IIRC were able to provide case studies of best practice across a range of different organisations. These would also help promote adoption and aid compliance in an area where there is much enthusiasm but little awareness. 

'A grey area still exists with regard to the relationship between the integrated report and other forms of reporting, such as statutory narrative reports and sustainability reports. Duplication must be avoided and the <IR> needs to find a suitable accommodation with those other reporting requirements. IIRC should work with other regulators and standard setters to iron out any problems in this area that could emerge as barriers to adopting <IR>.'

ACCA said the IIRC framework has evolved quickly from the initial concept and has benefitted from contributions from many stakeholder groups. In its submission, ACCA welcomed the progress of the project and noted that there appears to be broad support in many countries for the concept of <IR>. However, ACCA said the outline framework needs to be padded out. The global accountancy body has set out in its submission a number of general and technical points that it says must be effectively addressed.

Balancing act

ACCA, which itself took part in the IIRC’s <IR> pilot programme and incorporated the concepts of integrated reporting in the production of its own integrated report for the first time last year, says that IIRC has to get the balance right within the <IR> framework for it to be effective.  

Richard Martin said: 'ACCA has had the benefit of first-hand experience of <IR> in practice, so we have a good view of the challenges that the IIRC and prospective preparers face. One specific element of the draft framework that needs to be addressed is the extent to which preparers should aim to keep their reports to a certain size.  While the focus on keeping reports concise is important, it shouldn’t override the need for the report to be sufficiently informative to reflect the complexity of the affairs of many reporting organisations and the range of information needs of stakeholders, including providers of financial capital.

'The framework also needs to contain more informed guidance and good examples to strike the right balance between transparency in reporting on the one hand and commercial sensitivity and exposure to risks in respect of forward-looking information on the other.'

ACCA responded to IIRC’s consultation on the <IR> framework, having sought views from ACCA’s Council, Global Forums for audit & assurance, business law, corporate reporting, governance, risk & performance and sustainability, as well as participation in roundtable discussions and events based on the consultation in several countries, including the UK, Singapore and China.

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For more information, please contact:

Steve Rudaini, ACCA Newsroom
+ 44 (0) 207 059 5622
+44 (0) 7801 133985
steve.rudaini@accaglobal.com  

Helen Thompson, ACCA Newsroom
+44 (0)20 7059 5759
+44 (0)7725 498654
helen.thompson@accaglobal.com 

Notes to Editors

  1. ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. 
  2. We support our 162,000 members and 426,000 students in 173 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of over 89 offices and centres and more than 8,500 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence. 
  3. Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. We believe that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. Our values are aligned to the needs of employers in all sectors and we ensure that through our qualifications, we prepare accountants for business. We seek to open up the profession to people of all backgrounds and remove artificial barriers, innovating our qualifications and delivery to meet the diverse needs of trainee professionals and their employers.