The ACCA has responded to plans for an <IR> Framework saying though it is in the correct direction, despite the fact that some additional development is needed.
ACCA says its own research, Understanding Investors: directions for corporate reporting, has shown that many stakeholders would welcome integrated reporting, highlighting 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 <IR> 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 when accompanied with current corporate reporting.
However, gaps remain in the framework and they do need to be resolved. The framework needs to be fully field-tested and provide case studies across different sectors to help preparers of <IR>. 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 between integrated reporting and the current reporting such as sustainability reports and statutory narrative reports. 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>
The ACCA has set out in its submission a number of general and technical points that it says must be effectively addressed.
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.
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.