ACCOUNTANTS ARE KEY TO IMPLEMENTING INTEGRATED REPORTING, SAYS NEW REPORT FROM ACCA AND IMA

As the call for Integrated Reporting (IR) in business grows, accountants will be instrumental in the development and implementation of the integrated reporting process, the latest joint report from ACCA (Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants) finds. The report, “From Share Value to Shared Value: Exploring the Role of Accountants in Developing Integrated Reporting in Practice,” can be viewed online: http://www.accaglobal.com/gb/en/technical-activities/technical-resources-search/2016/january/from-share-value-to-shared-value.html

The report examines the recent shift in focus from share value to the generation of “shared value,” as companies define success in terms of both internal financial returns and external social and economic results. Following this shift, there is a new trend of corporate reporting: the integration of financial and nonfinancial concerns into one accounting tool, IR. It is defined as a concise communication about how a company’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value over the short, medium and long term.

IR is essential in the modern business landscape as physical and financial assets no longer explain the full market value of a company—in 1975, they would explain 83 percent of a company’s value, but today they only explain 19 percent. Market valuations are now based on intangibles such as intellectual, social, and relationship and human capitals, and in this context, there is a crucial need for a broader information set.

As IR provides companies the opportunity to embrace long-term thinking, accountants are in a unique position to contribute to the identification of areas for improvement as well as the development of solutions. Implementing new accounting methodologies requires carefully designing guidelines and processes, and accountants can play a substantial role in the development of the integrated report.

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“I believe the adoption of IR will not reach its full potential, including in the U.S., unless we, as an accounting community, take several actions to lay the groundwork for a transformation in external corporate reporting,” said Raef Lawson, Ph.D., CMA, CPA, IMA Vice President of Research and Policy.

“The roles of accountants in implementing IR are of utmost importance. CFOs can be leaders of the IR projects within their companies. Accountants, management accountants, and auditors have important roles to play in devising the right accounting for capitals, the right information systems, and the right assurance for the reported information,” said Faye Chua, Head of Business Insights from ACCA.

To this end, Chief Financial Officers can be leaders of the IR projects within their companies, while accountants, management accountants, and auditors have important roles to play in devising the right accounting for capitals, the right information systems, and the right assurance for the reported information.

ACCA and IMA share a strategic partnership, focusing on research studying the future of the global accounting profession. For more research and insights, visit The Future Today website at www.futuretoday.com.

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