Answer To: Page 1 XXXXXXXXXXKaplan Business School Assessment Outline Assessment 1 Information Subject Code:...
Preeta answered on Feb 02 2021
INTEGRATED REPORTING
INTEGRATED REPORTING
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EXECUTIVE SUMMARY:
This report is on integrated reporting. The main purpose of the report is to understand the whole process of integrated reporting and to make a recommendation if it can be implemented in business organization. This report has been done from the view point of an accounting firm which is considering implementing integrated reporting for the business of its clients.
At first the whole situation has been explained under introduction and the considerations which the accounting firm is making. Then a background has been provided on integrated accounting that is the meaning of it along with the factors which need to be considered for the implementation of the reporting system. Then the advantages of integrated accounting have been discussed followed by the disadvantages of the reporting system. After that the cost and benefit analysis is done for integrated reporting. Next, the discussions have been made on the changes which are to be brought in an organization in order to implement the system of integrated reporting.
Based on the above discussions, recommendations have been made if integrated reporting can be implemented or not. In the end, conclusions have been drawn based on the whole study made for the purpose of the report.
Table of Contents
EXECUTIVE SUMMARY: 1
INTRODUCTION: 3
INTEGRATED REPORTING: 4
ADVANTAGES OF INTEGRATED REPORTING: 5
DISADVANTAGES OF INTEGRATED REPORTING: 6
COSTS AND BENEFIT OF INTEGRATED REPORTING: 8
CHANGES TO BE MADE FOR IMPLEMENTATION OF INTEGRATED REPORTING: 9
RECOMMENDATION ON IMPLEMENTATION OF INTEGRATED REPORTING: 10
CONCLUSIONS: 11
REFERENCES: 12
INTRODUCTION:
This report has been written from the point of view of an accounting practitioner who is working with a medium sized accounting firm. That firm is considering the adoption of integrated reporting to give better services to the consumers. The clients know about the growing popularity of integrated reporting and how it is becoming an interesting factor for most of the business houses but they are completely unaware about what integrated reporting is actually and how they can use it.
One of the partners of the firm, Jimmy Chung is of the opinion that adoption of integrated reporting will help the firm to gain competitive advantages, provide better services to the clients by contributing in their business in a real and positive way. Moreover the value for all the business stakeholders will improve.
But another partner, Deepak Shami is of the opinion that the firm should concentrate on it core business areas which are audit, tax and other areas of financial advice. He feels that compared to the huge expense to be incurred for the implementation of integrated reporting, it will add little to the success to the business of the clients. He is of the opinion that integrated reporting is so popular due to its newness and is just for some temporary time and will eventually fade away from the practice.
So, this report has been prepared to discuss what integrated reporting actually is and it benefits and flaws so that a recommendation can be made regarding its implementation which can be discussed in the next meeting of the board. The board consists of the partners, lawyers as well as non accountant specialists. Even if the reporting method is implemented then the changes which are required to be brought in the organization has been discussed in this report.
INTEGRATED REPORTING:
International Integrated Reporting Council (IIRC) is primarily responsible for the development and the promotion of integrated reporting. The council is formed of investors, regulators, standard setters, the accounting professionals, companies and non-governmental organizations. Integrated reporting is a type of corporate communication which communicates the shareholders the value that is being created by an organization over a certain period of time through discharge of its operational activities (Eccles and Krzus, 2010). This kind of reporting connects strategic objectives and governance of the organization with the risk and performance of the organization to study the process of value creation. The main focus of this reporting is on the creation of value through all the performance areas of the company and not just focusing on the short term financial figures that is revenue and profit. The context of environmental, economic and social is included in the reporting. The value creation is checked for short term, medium term as well as long term.
Some factors are needed to be considered to implement integrated reporting for an organization, which are as follows (Eccles and Saltzman, 2011):
· An overview of the organization needs to be obtained so understand its location, way of formation, structure and operation. The external environment of the organization also needs to be analyzed. PESTEL analysis can be done for that purpose. The stakeholders of the company are also important.
· The opportunities and risks for the organization need to be analyzed from both internal as well as external factors. SWOT analysis can be done to understand the opportunities and threats. Bigger the brand name of the company bigger will be opportunity but the associated risks to that opportunity also need to be evaluated properly.
· The strategy of the company need to be evaluated that is if the company is planning for new expansion or new product launch or to set up a new factory. BCG matrix, Porter’s models and the value chain can be used for this purpose. It is also to be analyzed as to how the organization is allocating its resources.
· It is important to study the business model of the company that is the whole system of processing the inputs to bring the required output or outcome which is according to the strategy and purpose of the company to create value over short, medium as well as long term. Inputs are the human resources and the raw materials where outputs are the final products and services. Several performance management measurements can be used for this purpose.
· The past performance of the company also needs to be analyzed that is how the organization has performed so far and has produced the desired outcomes as per the strategy of the organization with its available resources. The outcomes can be...