scholarly journals THE CONTRIBUTION OF INTEGRATED REPORTING IN DETERMINING THE PERFORMANCE AND VALUE OF A SUSTAINABLE ORGANIZATION

2021 ◽  
Vol IV(1) ◽  
Author(s):  
Camelia Mihalciuc ◽  
Keyword(s):  
Business Model ◽  
Financial Reporting ◽  
Information Needs ◽  
Business Environment ◽  
Essential Elements ◽  
Integrated Reporting ◽  
Nonfinancial Information ◽  
Real Performance ◽  
International Integrated Reporting Council

In the current business environment, financial reporting has become insufficient in terms of information, which is caused by the increasing information needs of stakeholders. In this context, an integrated reporting modality has emerged thanks to the International Integrated Reporting Council (IIRC), where the information presented is both financial and nonfinancial information, such reporting being called “Integrated Reporting”. Thus, starting from this consideration, the main objective of the paper aims at the main aspects that lead to the presentation of the benefits of implementing integrated reporting in organizations, through the ability to understand, in a more complete way, the "real" performance of a sustainable organization. The essential elements contained in an integrated reporting concern the capital, the business model and the process of creating and maintaining value, this reporting must be integrated in the strategy and vision of the organization, allowing through the transparency of these integrated reports the observation of all aspects led to the results obtained by the organization, as well as providing information on the role of the organization in society and the context in which it operates, the image of the organization being complete. The purpose of this paper is to highlight the importance and role assigned to integrated reporting in measuring the performance of a sustainable organization, by making it easier to understand the cause and effect of the link between financial performance and sustainability by stakeholders.

Business Model Literature Overview

2014 ◽  
pp. 79-130 ◽  
Author(s):  
Ales Novak
Keyword(s):  
Business Model ◽  
Financial Reporting ◽  
Business Models ◽  
Potential Role ◽  
Financial Instruments ◽  
Business Logic ◽  
Literature Overview ◽  
Ifrs 9 ◽  
Definition Of

The term ?business model' has recently attracted increased attention in the context of financial reporting and was formally introduced into the IFRS literature when IFRS 9 Financial Instruments was published in November 2009. However, IFRS 9 did not fully define the term ‘business model'. Furthermore, the literature on business models is quite diverse. It has been conducted in largely isolated fashion; therefore, no generally accepted definition of ?business model' has emerged. Therefore, a better understanding of the notion itself should be developed before further investigating its potential role within financial reporting. The aim of this paper is to highlight some of the perceived key themes and to identify other bases for grouping/organizing the literature based on business models. The contributions this paper makes to the literature are twofold: first, it complements previous review papers on business models; second, it contains a clear position on the distinction between the notions of the business model and strategy, which many authors identify as a key element in better explaining and communicating the notion of the business model. In this author's opinion, the term ‘strategy' is a dynamic and forward-looking notion, a sort of directional roadmap for future courses of action, whereas, ‘business model' is a more static notion, reflecting the conceptualisation of the company's underlying core business logic. The conclusion contains the author's thoughts on the role of the business model in financial reporting.

scholarly journals The Common Good Balance Sheet, an Adequate Tool to Capture Non-Financials?

2019 ◽  
Author(s):  
Christian Felber ◽  
Vanessa Campos ◽  
Joan Ramon Sanchis
Keyword(s):  
Organizational Performance ◽  
Financial Reporting ◽  
Common Good ◽  
Information Needs ◽  
Balance Sheet ◽  
Validity And Reliability ◽  
Integrated Reporting ◽  
The Common Good ◽  
Corporate Reporting ◽  
The Common

In relation to organizational performance measurement, there is a growing concern about the creation of value for people, society and the environment. The traditional corporate reporting does not adequately satisfy the information needs of stakeholders for assessing an organization’s past and future potential performance. Practitioners and scholars have developed new non-financial reporting frameworks from a social and environmental perspective, giving birth to the field of Integrated Reporting (IR). The Economy for the Common Good (ECG) model and its tools to facilitate sustainability management and reporting can provide a framework to do it. The present study is the first one that empirically validates such metrics on a sample of 206 European firms. Consequently, it allows knowledge to advance as it checks their statistical validity and reliability.

scholarly journals Measuring the independence of audit oversight entities: a comparative empirical analysis

2017 ◽  
Vol 30 (2) ◽  
pp. 165-184 ◽  
Author(s):  
Lukas Loehlein
Keyword(s):  
Financial Reporting ◽  
Policy Research ◽  
Essential Elements ◽  
Future Research ◽  
Public Confidence ◽  
Content Type ◽  
Legal Provisions ◽  
Accounting Scandals ◽  
Independent Audit

Purpose Independent audit oversight is a prerequisite for restoring public confidence in financial reporting and auditing after the past accounting scandals and the financial crisis. By analysing and comparing the independence of the audit oversight boards of 27 European Member States and the USA, this study aims to provide insights into the question of how independent “independent” audit oversight boards are. Design/methodology/approach Independence is measured in terms of the organisational compositions and regulatory competences of the audit oversight authorities. The data were collected through an e-mail questionnaire that was sent to all European oversight authorities, and by analysing legal provisions of various regulators. The results are analysed and visualised by a Partial Order Scalogram Analysis with Coordinates, which allows conclusions about the similarities of various systems and their relative levels of independence. Both measurements are then equally combined into one value of material independence, which is used to rank the oversight authorities. Findings Although all countries encounter similar pressures to establish profession-independent oversight systems, this study identifies how differently “independence” has been translated in regulatory outcomes. While all countries claim to possess formal independent oversight bodies, there is a visible gap between countries with comparatively strong independent oversight authorities and systems in which accounting bodies still maintain far-reaching regulatory influence. At the same time, the results question the role of the Public Company Accounting Oversight Board (PCAOB) as the globally perceived benchmark of an entirely independent regulator. Research limitations/implications This study focuses on formal independence rather than de-facto independence. Future research has, therefore, to address how these formal arrangements have evolved in regulatory practice. Practical implications Policy makers around the world perceive independent oversight as one of the essential elements of regulatory reforms aiming at restoring public confidence in the aftermath of past accounting scandals. This study enables the comparison and benchmarking of national specific regulatory designs with other forms of independent oversight. Originality/value Although the role of independent regulation is a recurring theme in accounting research, a systematic and encompassing comparison of the intertwining of audit oversight authorities and the accounting profession has not yet been provided. This study takes a first step towards providing a quantifiable measure of the formal independence of audit oversight authorities by mobilizing concepts, methods and prior findings from the field of public policy research.

scholarly journals Investigating risk disclosures in Italian integrated reports

2020 ◽  
Vol 28 (6) ◽  
pp. 1149-1178 ◽  
Author(s):  
James Guthrie ◽  
Francesca Manes Rossi ◽  
Rebecca Levy Orelli ◽  
Giuseppe Nicolò
Keyword(s):  
Content Analysis ◽  
Financial Reporting ◽  
Design Methodology ◽  
Alternative Form ◽  
Risk Disclosure ◽  
Integrated Reporting ◽  
Content Type ◽  
Risk Disclosures ◽  
Do So

Purpose The paper identifies the types of risks disclosed by Italian organisations using integrated reporting (IR). This paper aims to understand the level and features of risk disclosure with the adoption of IR. Design/methodology/approach The authors use risk classifications already provided in the literature to develop a content analysis of Italian organisations’ integrated reports published. Findings The content analysis reveals that most of the Italian organisations incorporate many types of risk disclosure into their integrated reports. Organisations use this alternative form of reporting to communicate risk differently from how they disclose risks in traditional annual financial reporting. That is, the study finds that the organisations use their integrated reports to disclose a broader group of risks, related to the environment and society, and do so using narrative and visual representation. Originality/value The paper contributes to a narrow stream of research investigating risk disclosure provided through IR, contributing to the understanding of the role of IR in representing an organisational risk.

scholarly journals Learning from the Best: New Challenges and Trends in IR Reporters’ Disclosure and the Role of SDGs

2020 ◽  
Vol 12 (14) ◽  
pp. 5545
Author(s):  
Maria Federica Izzo ◽  
Alberto Dello Strologo ◽  
Fabrizio Granà
Keyword(s):  
Sustainable Development ◽  
Integrated Reporting ◽  
Policy Makers ◽  
Corporate Reporting ◽  
Development Agenda ◽  
Evaluation Scores ◽  
Development Goals ◽  
International Integrated Reporting Council ◽  
Stakeholder Needs

A worldwide debate on the effectiveness of business reporting information has engaged organizations, policy makers, regulators, and members of the capital market. The documents through which organizations disclose their annual performance are being questioned and criticized, as they appear inadequate for responding to stakeholder needs. In 2013, the International Integrated Reporting Council (IIRC) launched a project with the aim of redesigning corporate reporting processes and outputs, introducing integrated reporting (IR). At the center of IR are the six capitals defined by the IIRC representing the basis for an innovative form of evaluating and presenting performance. New topics on the global sustainable development agenda are growing in importance, requiring companies to enrich their disclosure and connect business to environment. In this study, we examined how a group of leaders in IR, 134 European companies from the IIRC IR reporters list, are currently disclosing IR capital and Sustainable Development Goals (SDGs), developing three evaluation scores: Capital Disclosure Index, SDG Disclosure Index, and SDG Compliance Index.

scholarly journals Reshaping Risk Disclosure through Integrated Reporting: Evidence from Italian Early Adopters

2017 ◽  
Vol 12 (10) ◽  
pp. 11 ◽  
Author(s):  
Francesca Manes-Rossi ◽  
Giuseppe Nicolo ◽  
Rebecca Levy Orelli
Keyword(s):  
Content Analysis ◽  
Financial Reporting ◽  
Information Needs ◽  
Bad News ◽  
Business Strategies ◽  
Risk Disclosure ◽  
Integrated Reporting ◽  
Early Adopters ◽  
Extensive Information ◽  
Different Dimensions

The purpose of this paper is to explore Integrated Reporting (IR) and risk disclosure (RD) and demonstrating the interconnection between business strategies and risk. Through a content analysis, the paper explores the management commentary and Integrated reporting of Italian companies at the end of 2015.The study reveals that many of the companies have embedded financial reporting into IR. We find extensive information about risks and opportunities, in relation to the management of the six capitals. The paper represents an investigation into risk disclosure in IR. It adds knowledge to the opportunity offered by IR in meeting stakeholder’s information needs, compared to traditional tools of corporate reporting.The results could be of interest both for legislator and standards setters, to bring them up to date with enhanced disclosure of risk and opportunities which IR offers with respect to the more traditional forms of disclosure.This is the first country-based study investigating risk disclosure provided through IR looking at three different dimensions: the metrics of RD (monetary or non-monetary); the outlook orientation (past, present or future) and the type of risk news (good or bad news). The results are relevant to detect how companies act and what can be done to improve risk disclosure.

scholarly journals IMPROVING THE EFFICIENCY OF BUSINESS MODEL OF AN ENTERPRISE THROUGH PREPARATION OF INTEGRATED REPORTING

2020 ◽  
pp. 169-177
Author(s):  
O. Pimenova O. ◽  
S. Pimenov
Keyword(s):  
Structural Analysis ◽  
Business Model ◽  
Financial Reporting ◽  
Value Creation ◽  
Synthesis Methods ◽  
Integrated Reporting ◽  
Management Indicators ◽  
Long Run ◽  
Strategic Assets ◽  
Analysis And Synthesis

The necessity of formation of integrated reporting by Ukrainian enterprises is investigated. The importance of business presentation of information on the company's value creation, its effectiveness, opportunities, risks it faces, and development prospects for investors and other stakeholders in the form of integrated reporting is determined. It is investigated that integrated reporting should provide stakeholders with information on the long-term development of the enterprise in contrast to financial reporting, which cannot provide such full information. That is the main purpose of integrated reporting is to explain to financial capital providers and other stakeholders how an enterprise creates and plans to create the value in the future over a long period of time. The purpose of the study is to substantiate the need of taking into account the needs of stakeholders in the work of enterprise and the disclosure of non-financial information in the form of integrated reporting, which will increase the efficiency of the business model. The methodological basis of the study is a set of general and special principles, provisions and methods of scientific research, the use of which is determined by the purpose and objectives, in particular, methods of generalization, comparison, analysis and synthesis, methods of system and structural analysis, diagnostic evaluation. In particular, in the process of research the methods of generalization, analysis and synthesis were used in defining the concept of integrated reporting and its individual elements; methods of system and structural analysis in the study of the basic principles of integrated reporting; method of comparison in the study of scientific approaches to the formation of integrated reporting. It is substantiated that by providing information on value creation, in particular on the company's competitive advantages, strategic assets, environmental, social and management indicators (ESG), the company will gain an advantage over competitors, effectively implementing its business model in the market and be able to achieve sustainable development in the long run.

Modifying assurance practices to meet the needs of integrated reporting

2018 ◽  
Vol 31 (2) ◽  
pp. 400-427 ◽  
Author(s):  
Warren Maroun
Keyword(s):  
Financial Reporting ◽  
Business Models ◽  
Analytical Techniques ◽  
Published Data ◽  
Integrated Reporting ◽  
Test Procedures ◽  
Content Type ◽  
International Integrated Reporting Council ◽  
Integrated Or ◽  
Forward Looking

Purpose Traditional methods of assurance outlined by current professional standards are risk-based models where the emphasis is on the veracity of published data rather than on the rigour of the interpretation or analysis of information provided to users. As such, they are not well suited for expressing an opinion on qualitative, subjective or forward-looking assessments typically included in integrated reports. In this context, the purpose of this paper is to describe an alternate approach to assurance and identifies the initial elements of an “interpretive assurance model”. Design/methodology/approach The research is exploratory/interpretive. It relies on detailed interviews with experienced auditors and preparers to develop an initial approach for providing some level of assurance over an integrated report. Findings The research identifies elements of an interpretive assurance model which focusses on providing assurance on the interpretation and analysis of information included in an integrated report rather than on underlying data. These include an examination of the completeness of the explanation of the value creation process provided in an integrated report; the methods used to support management discussion and analysis; and the reasonability of the review process used to ensure the reliability of qualitative, subjective and forward-looking representations contained in an integrated report. Research limitations/implications The study is conducted in a South African setting. While limiting the study to a single jurisdiction may be seen as a limitation, local preparers and auditors have had at least five years of experience with the application of an integrated reporting framework and are in a strong position to provide detailed insights. Practical implications An interpretive assurance model shifts the focus from objective verification of data using defined test procedures to evaluation of the interpretation and analysis process used to prepare an integrated report. Application of the proposed model will require practitioners and auditing students to be trained extensively in qualitative analytical techniques. The inherent complexity of contemporary business models and the multi-dimensional focus of integrated reports will also result in changes in the composition of audit teams which are currently dominated by experts in financial reporting rather than integrated or strategic business management. Originality/value The paper is the first to offer a practical approach for providing assurance over an integrated report. It responds to calls form the International Integrated Reporting Council and International Auditing and Assurance Standards Board for more innovative assurance models for addressing the reporting needs of contemporary organisations.

scholarly journals Disclosure Style and Its Determinants in Integrated Reports

2019 ◽  
Vol 11 (7) ◽  
pp. 1960 ◽  
Author(s):  
Aureliana-Geta Roman ◽  
Mihaela Mocanu ◽  
Răzvan Hoinaru
Keyword(s):  
Impression Management ◽  
Financial Reporting ◽  
Multivariate Regression Analysis ◽  
Annual Reports ◽  
Integrated Reporting ◽  
Financial Reporting Standards ◽  
Corporate Reporting ◽  
Environmentally Sensitive ◽  
Set Up ◽  
International Integrated Reporting Council

Integrated Reporting promotes a more cohesive and efficient approach to corporate reporting and aims to improve the quality of information available to providers of financial capital. The purpose of this paper was to investigate the determinants of readability and optimism which build the disclosure style of integrated reports. Our research draws on impression management theory and legitimacy theory, while also taking into consideration the cultural system of Hofstede with its further developments by Gray. Our sample consisted of 30 annual reports, extracted randomly from the Integrated Reporting examples database set up by the International Integrated Reporting Council. For the purposes of our investigation, we have carried out a multivariate regression analysis. Firstly, our results show that the higher the revenues of the reporting company, the more balanced their integrated reports, while younger companies use a more optimistic tone when reporting. Additionally, optimism seems to be inversely correlated with the length of the reports. Secondly, entities based in countries with a stronger tendency towards transparency surprisingly provide less readable integrated reports. It was also revealed that companies operating in non-environmentally sensitive industries, as well as International Financial Reporting Standards adopters deliver foggier and thus less readable integrated reports.

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