Businesses are hesitant about adopting integrated reporting <IR> with the majority taking a ‘wait and see’ approach, according to new research from ACCA (the Association of Chartered Certified Accountants), the global accountancy body.
Chief financial officers and other senior finance professionals told ACCA that while they had yet to adopt <IR> many of them planned to do so in the near future. Just 10 per cent said they had no intention of adopting the reporting model, which includes non-financial information.
The ACCA report, Understanding Investors: the Changing Corporate Perspective, which is the fourth and final part of a research series looking at the future of financial reporting, gauged the views of finance chiefs in UK and Ireland’s businesses. It revealed that some 40 per cent were actively taking steps to introduce <IR> in the next few years.
However, findings from a previous report in the series, which captured the views of the investor community, found that 93 per cent of investors expressed support for the concept of integrated reporting.
Ewan Willars, director of policy at ACCA, said: 'On the face of it, what our research has shown is that when it comes to <IR> the finance profession is less enthusiastic about it than investors.
'However, CFOs are telling us that they do see the benefits of integrated reporting, not just presenting the company as an advocate of sustainability, but helping to align the company’s risks with its opportunities, adopt a more holistic view of the true drivers of corporate performance, and build better relationships with external stakeholders. Companies with an emphasis on longer-term investors are especially likely to see implementing integrated reporting as a priority.
'There is an element of seeing who pulls the <IR> trigger first amongst the finance professional community.'
Audit – room for improvement
ACCA also delved into the relationships between company and auditor as part of the research. Finance chiefs highlighted a good relationship with their auditors, but indicated there was room for improvement around high costs and a lack of competition in the audit market. Sixty per cent said they wanted to see lower fees, while 47 per cent favoured greater competition in the audit market.
Ewan Willars explained: 'Lower fees and greater competition were identified as areas where the audit market could improve, but that doesn’t give the full picture. Interviews with CFOs revealed that while they were keen to cut costs around audit, they made a link between price and quality. They absolutely do not want the quality of an audit to suffer if fees fall – and many fear that more frequent rotation of auditors may actually cause fees to increase.'
Other findings in the report
- Almost two-thirds of CFOs said that external stakeholders see the quick release of the annual accounts as a sign of good management, and over 80% have taken active steps to speed up the reporting process.
- Two-thirds of finance chiefs would welcome a move towards greater adoption of real-time reporting, but concerns remain over competition-sensitive information
- Thirty-eight per cent favoured faster audits, while almost half favoured more frequent communication between auditors and their clients.
Read the full report via the 'Related links' section, left of this article.
For more information, please contact
Steve Rudaini, ACCA Newsroom
+ 44 (0) 207 059 5622
+44 (0) 7801 133985
Notes to Editors
- 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.
- We support our 162,000 members and 428,000 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.
- 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.