A current issue in financial accounting and reporting is the issue of Integrated Reporting which can be defined as “a concise communication about how an organization’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” (Roberts, 2014, p.28). With more countries thinking of making Integrated Reporting mandatory, it is important to come up with effective ways of transitioning from traditional reporting to Integrated Reporting. The transition is needed as there have been major changes in the way business is conducted such as how business creates value and the context in which business operates since the current business reporting model was designed (Sharman, 2012). This literature review will, therefore, define and discuss the concept of Integrated Reporting, and examine the effect of these changes on stakeholders. The paper will answer the research question: Should all organisations make a transition from traditional reporting to Integrated Reporting? This paper answers this research question as well as investigates future research and possible suggestions as to how this research may be carried out.
The primary purpose of a financial report is to explain to users of financial information how an organisation creates value over time, therefore the information obtained must relevant and reliable. The aim of an Integrated Report is to allow a better communication of the organisations short, medium and long-term value creation propositions through providing a concise communication about how an organisation’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value...
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... South Africa and France have already made the transition to Integrated Reporting. Stock exchanges throughout the world such as Sao Paulo, Singapore, Kuala Lumpur and Copenhagen have also implemented a report to explain requirements relating to the reporting of environmental, social and governance issues (Cheng et al., 2014). These changes are due to increase in stakeholders demands on organisations and resources are becoming increasingly limited. Organisations are re-evaluating how they can communicate information as transparently as possible to all their stakeholders. Integrated Reports can be seen to meet the needs of the community as they show that the organisation is a good corporate citizen by meeting the needs of investors and other stakeholders. This approach to financial communication makes these reports inaccessible to the broader audience (Kiron, 2012).
The objective of financial reporting/statements is to provide information about the reporting entity’s financial performance and financial position that is useful to a wide range of users for assessing the stewardship of the entity’s management and for making economic decisions.
Mandated reports are a genre that is a part of numerous careers. Mandated reports are used by mandated reporters which are designate groups of professionals that are required to report cases of suspected child abuse and neglect. A mandated report has a specific way that it has to be field out because the severity of the information is a massive part in helping save an abused or neglected child from being endangered. This research analyzes the difference between the different documentations in mandating reporting and how one reports various from another. The next step is to investigate where and who the forms are turned into. I’ll be looking at the Social Worker perspective because it’s the field of study I’m going in and would potentially help me when I begin my career in children and family services. Giving the information about mandated reports would educate me on the all the factual information needed after receiving a mandate report and from the information gathered, how do they deiced whether or not it’s a serious case or not. This research would uncover every aspect from beginning to end of the entire process of when a report is submitted up until the discussion is made on what to do after reviewing the information. The report is used my any profession to report suspect child abuse or neglect at any time or place. There is a different between different careers on how the report is written depending on the person submitting it. The very last step is going in depth with analyzing the actual form and comparing and contrasting it to other forms from different states. I want to also look at, the different between the forms, depending on who is the attended audience.
The Securities and Exchange Commission requires that publicly owned businesses provide annual reports, which are available to the public. Many different people use annual reports, to make informed business decisions. Management from the company uses the information to determine a number of items. Some of these items are the profitability of the company, the inventory turnover rate, and the accounts receivables rate. Creditors use the annual report to determine how well a company can satisfy its current liabilities, as well as, how the company is doing in the aspect of long tem survival. Another group of people who use the annual reports furnished by companies are the investors, who can purchase shares of stock from the publicly company. Annual reports are very important to these people, because they are an over all picture to help them determine the over all stability and reliability of the company’s financial outlook. These annual reports are important because they do not only contain the financial statements of the company, but there is a management ‘s note to discuss reasons for any unexpected numbers, and an auditor’s report, from an independent accounting firm, who either agrees or disagrees with the financial numbers. Market reporter Matt Krant said, “Ignoring these reports is akin to driving down the freeway blindfolded.”
The annual report or 10-K of a company is a useful source of information for many agents outside of the corporation. Shareholder’s can view the contents of an annual report to get a more comprehensive idea of what the company is built upon. Additionally, annual reports show a company’s progress over the past financial periods and give a detailed breakdown of company investing and operations. The 10-K and all related documents are easily accessible on a company’s website for the public to view. i
Samuel Theising Cultural Project La Sociedad de la Nieve is a portrayal of the 1972 Uruguayan plane crash in the Andes that left over 20 people stranded and still alive. It follows a group of rugby players and their friends and family as they make their way to Chile for a sporting event, stopped short due to the place tragically being pulled down deep in the Andes mountains at the tail end of the winter. The crash killed 11 of the passengers or crew initially, though the following 72 days being trapped claimed all but 16 of the initial 45 human lives aboard the plane. Due to this prolonged survival effort with no food, the survivors were eventually forced to cannibalize the dead passengers, whose bodies were preserved by the blistering cold.
We would love for these impacts to always have a positive impact; however the impact can affect a company in a negative manner. “ Researchers Holger Daske, Leuz Hail, Christian Leuz and Rodrigo Verdi examined 3,100 firms in 26 countries mandated to adopt IFRS in “Mandatory IFRS Reporting around the World: Early Evidence on the Economic Consequences”. The study examines the economic effects of IFRS, both early and mandated adoption” (Bolt-Lee). They were able to conclude that a company’s adoption of IFRS creates strong economic benefits in countries with rigid regulation over financial reporting. The article also explains that these benefits include an increase in the stock’s market value, an increase in market liquidity, and a lower cost of capital. Companies with major differences between GAAP and IFRS standards show the greatest benefit when supported by a strong regulatory
As technology progresses it can truly change how a business operates in terms of accounting and financial reporting. Online software has become a widely used system by many businesses around the globe. Financial reporting is essential to any business especially when seeking for potential investors or stakeholders. The reason being is because a financial report contains all of the records of how a business is performing financial wise. Likewise there are purposes of securities regulations and the main one is to disclose any schemes.
According to the conceptual framework, the potential users of financial statements are investors, creditors, suppliers, employees, customers, governments and agencies, and the general public (Financial Accounting Standards Board, 2006). The primary users are investors, creditors, and those who advise them. It goes on to define the criteria that make up each potential user, as well as, the limitations of financial reporting. The FASB explicitly states that financial reporting is “but one source of information needed by those who make investment, credit, and similar resource allocation decisions. Users also need to consider pertinent information from other sources, and be aware of the characteristics and limitations of the information in them” (Financial Accounting Standards Board, 2006). With this in mind, it is still particularly difficult to determine whom the financials should be catered towards and what level of prudence is necessary for quality judgment.
El-Gazzar, S. M., Fornaro, J. M., & Jacob, R. A. (2008). An examination of the determinants and contents of corporate voluntary disclosure of management’s responsibility for financial reporting. A Journal of Accounting, Auditing & Finance, 23(1), 95-114. Retrieved from http://library.gcu.edu/
There are two types of transparencies: Regulatory transparency which incorporates controls on regulatory discretion, counsel with invested individuals and advance procedures that are clear, unsurprising and reliable. Information transparency is the giving of precise and “timely statistical data” as well as convenient warning of continuous policy discussions. ("Critical perspectives on international business: Vol 5, No 3", 2016) It needs to be transparent on how it spends the publics tax money and how they conduct their business. In 2012 South Africa was positioned second out of an aggregate of 94 countries for the transparency of its financial plan, however, in the 2015 review, South Africa was positioned third. ("South Africa Overview", 2016) The public and the business community need to have regulatory and information transparency so they can understand and make a precise evaluation of their rights and commitments. However, the final objective of the public sector transparency needs to make government policies reasonable and unsurprising to diminish the instability and expenses of “conducting public and private business.” ("Critical perspectives on international business: Vol 5, No 3", 2016) Transparency in the Private sector is the extent to which organizations customarily reveal substantial information about their financial condition and bookkeeping practices to “outsiders and the government in a reliable manner.” ("Critical perspectives on international business: Vol 5, No 3", 2016) Valuable numeric reporting supports the general productivity of the business sector and has the long‐term impact of lessening the expense of capital for companies. Incorrect or conflicting numeric reports brings down the plausibility of the private sector and discourage foreign contribution and cross‐border
“An integrated report is a concise communication about how an organization’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.” (International Integrated Reporting Framework p7)
"The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions."[Financial statements should be understandable, relevant, reliable and comparable. Reported assets, liabilities and equity are directly related to an organization's financial position. Reported income and expenses are directly related to an organization's financial performance.
The globalization of business has resulted in the need for compatible accounting standards that can be used internationally for financial reporting. As a result, the International Financial Reporting Standards (IFRS) were developed by the International Accounting Standards Board (IASB) to unify the various financial reporting methods and create a single accounting standard which can be applied to any financial statement worldwide (Byatt). The global standardization of financial reporting will increase the readability and enhance comparability of globally traded companies’ financial statements, without the need of conversion or translation. There are a few main differences between the International Financial Reporting Standards (IFRS) and the U.S. Generally Accepted Accounting Principles (U.S GAAP). The increasing recognition and acceptance of the International Financial Reporting Standards by accounting professionals in the United States, will affect the way in which the U.S will record financial statements in the future.
This introduction section presents background information on the emergence of sustainability reporting and sustainability issues. Research problem discussion is also included that leads to the research objectives and research questions around which this research is proposed to be built. Further on the significant of the research and the target group that the research is aimed at are presented.
Peasnell, KV 1982, ‘The function of a conceptual framework for corporate financial reporting’, Accounting & Business Research, vol. 12, issue. 48, pp. 243-256, viewed 05 May 2014