Integrated Reporting for Auditing & Accountability- myassignmenthelp

Question: Discuss about theIntegrated Reporting for Auditing Accountability Journal. Answer: Introduction The main objective of this essay involves in the analysis and evaluation of all the related issue of integrated reporting so that its major benefits and limitations can be identified for the business entities. Integrated Reporting is regarded as a tool of concise communication showing how the business entities create value for long term, medium term and short term. Integration reporting provides great assistance to enhance the business entitys manner to plan, think and report the different aspects of their business (de Villiers, Rinaldi and Unerman 2014). Apart from this, the implementation of integrated reporting provides the organizations with a major tool that helps in establishing better communication with the stakeholders so that the needs of them can be identified and fulfilled in the most efficient manner. Business organizations irrespective the size and industry can adopt integrated reporting for the establishment of understating and trust within the organizations as one cann ot ignore the significance of trust among the company, stakeholder, suppliers, customers and others. The implementation of integrated reporting assists in bringing trust by focusing on the drivers of values within the organizations (Adams 2015). Benefits of Integrated Reporting The above discussion indicates towards the fact that integrated reporting play an important part in the business organizations for the creation of value. For the creation of value, it is required for the integrated reporting to be concise so that it becomes possible for the highlighting the adopted process by the companies to create value (de Villiers, Rinaldi and Unerman 2014). Thus, it needs to be mentioned that the implementation of integrated reporting provides some major benefits to the business entities and they are discussed below: The effective implementation of integrated reporting in the organizations makes the management of the companies in the development of a better and solid understanding about different elements of the organizations that helps in determining the companies ability for value creation (Flower 2015). Thus, the adoption of integrated reporting leads to the better planning mechanism of the companies and also contributes towards the development of a holistic view on the capital and other resources of the business entities. With the implementation of effective integrated reporting, the management of the business entities become able in gaining effective understanding about the financial capital of the businesses along with other non-financial capital of the companies. As per the framework of integrated reporting, there is the existence of six types of capital in the companies; they are financial capital, manufactured capital, intellectual capital, human capital, natural capital and social and r elationship capital (Abeysekera 2013). The presence of integrated reporting can be regarded as the considerations among various aspects of the above-mentioned capitals, internal factors and external environments. The importance of the presence of integrated reporting cannot be ignored for the implementation of an effective communication tool in order to adders the demands and issues of the stakeholders. It largely helps in the process of the optimization of organizational reporting. For example, integrated reporting can be used for the collaboration among more than one departments in order to share information and to create synergies (Cheng et al. 2014). It helps in the broadening of understanding and knowledge of organization people about different aspects of the companies. For this reason, to strengthen the internal dialogue among different departments can be considered as a major aim of integrated reporting that leads to bring efficiency in resources. For example, it can be seen that the integration between annual report and sustainability report saves both money and time of the entities and provides greater understanding on both the financial and non-financial issues (Cheng et al. 2014). Integrated reports helps in bringing greater efficiency in the value chain of the companies; that leads to faster and effective decision-making process. Bringing simplicity in the assumptions of risk and opportunity management is another positive contribution of integrated reporting. The implementation of integrated reporting contributes towards the correct disclosure of financial information and it operates as an external communication tool for enhancing the image of the entities to the external stakeholders (Stubbs and Higgins 2014). For this reason, the investors can obtain all the required financial information for judging the current financial standing and financial performance of the organizations. It implies that the investors can obtain a holistic picture of the financial conduction of the entities. Financial performance can be a major limiting factor in the way to create value as most of the stakeholders judge the companies based on their financial performance. For this reason, companies are required to provide access to the stakeholders to their audited financial reports for effective investment decision-making (Fras-Aceituno, Rodrguez-Ariza and Garca-Snchez 2013). Apart from financial performance, the stakeholders show their interest in other areas like adopted business model by the entities and overall strategies that help the companies in achieving their desired goals. All these factors are the main aspects of integrated reporting as this report includes information about all these aspects for providing the overall outlook of the organizations. It implies that integrated reporting puts additional focus in the non-financial aspects of the businesses. Major external stakeholders of the companies like creditors, investors, suppliers, lenders and others can understand value cre ation process of the companies by gaining all the required financial as well as non-financial information (Frias?Aceituno, Rodrguez?Ariza and Garcia?Snchez 2014). Integrated reporting should not be burdened with unnecessary details as it is not to report for endless details. It only includes the necessary information so that the erasers become able to get specific results. The implementation of integrated reporting makes the management of the companies largely beneficial as it ensures better access to the required data and information that leads to easier and faster decision-making process. In addition, it also increases the overall efficiency of the whole workforce (Garca-Snchez, Rodrguez-Ariza and Fras-Aceituno 2013). The transparent process to create value with the assistance of integrated reporting helps in bringing improvement in the risk management mechanism of the companies. In the presence of transparent organizations operations, the management becomes able to assess the risk and opportunities from the businesses for the development of effective risk mitigation strategies. The implementation of integrated reporting helps the management of the business entities in the identification of the most efficient employees within the organizations that leads to better value creation process. Value drivers are another major aspect of integrated reporting as it assists the management of the companies in the identification of the factors that work as drivers for creating value (Brown and Dillard 2014). Thus, based on the above discussion, it can be said that the implementation of integrated reporting helps the businesses from both the financial and non-financial perspectives. Limitations of Integrated Reporting The above discussion involves in the identification of the major benefits of the implementation of integrated reporting as the reporting tool. How, it needs t be mentioned that the business entities have to face certain limitation while dealing with the aspects of integrated reporting. All the major limitations related to integrated reporting is shown below: Value creation is the major objective of integrated reporting. However, business entities face some major challenges while creating value through integrated reporting due to the fact that sometimes companies fail in the underatsding and identification of the aspect that is considered as value to the stakeholders (Crowther 2016). After that, another major limitation of integrated reporting is connectivity in the presence of the fact to break down the silos in the business organization in order to bring change in the procedure for collecting data. There are many instances for the implementation of integrated reporting that shows the failure of the business entities to identify the scopes for changing positive improvement with the help of the connectivity of financial as well as non-financial information (Churet and Eccles 2014). By bringing improvement in the process of integrated reporting, management of the companies become able in establishing interrelatedness, combination and depen dencies in order to create value in a better possible manner. Reconciliation of the needs of the major stakeholders of the companies is considered as another major limitation in the way of the implementation of integrated reporting. It can be observed that almost 45% of the integrated reports become successful in providing the explanation about materiality determination process and the overall efficiency of integrated reporting become largely affected by this (Eccles and Krzus 2014). For this reason, maintaining the required consistency in the whole process of integrated reporting is regarded as another major limitation of it. It can be observed that most of the integrated reports have length over 150 pages and it creates difficulties for the management of the companies in the reconciliation of conciseness and efficient communication with the major stakeholders. The absence of balance between the good news and bad news in the integrated reports can be regarded as another major limitation of it as lack of reliability and completeness can be obse rved in most of the integrated reports (Higgins, Stubbs and Love 2014). In order to overcome this limitation, the management are required to understand what is a good news and a bad news that should be included in the integrated reports. Another major limitation of integrated reporting is the presence of resistance to change. At the time of the introducing integrated reporting process in the companies, the management faces major resistance from individual departments as well as specific employees due to the change in the procedures of financial reporting (Busco 2016). At the time of the implementation of integrated reporting, the business entities have to incur large amount of costs. At the same time, large degree of work involved in the process to implement integrated reporting. It implies that both the increased amount of work and higher cost are two of the major limitations of the implementation of integrated reporting (Bartocci and Picciaia 2013). As the overall transparency in reporting process increases due to integrated reporting, it exposes the business entities to some potential risks due to the fact that the companies are required to disclose positive as well as negative performance of them in both financia l as well as non-financial areas. The adoption of integrated reporting brings some drastic changes within the operations of the companies and whole integrated reporting implementation process takes huge time. It takes several years from the initial decision to the full implementation process of integrated reporting and thus, there is a need for great coordination (de Villiers, Rinaldi and Unerman 2014). Apart from this, it also demands experience as lack of experience can lead to the failure in the whole integrated reporting implementation process that can lead to waste of money and time for the companies. Most impotently, there is a need for correct and sufficient data and information for the implementation of integrated reporting as lack of correct and required information can make the whole implementation process ineffective that can lead in the failure of integrated reporting implementation. Moreover, some other limitations of integrated reporting are lack of time, limited number of employees, lack of financial r esources, lack of work alignment related to the clear role of employees in the whole implementation process and others (Cheng et al. 2014). Conclusion The above discussion indicates towards the fact that the implementation of integrated reporting ensures the increased efficiency in the reporting as well as effective value creation. The implementation of integrated reporting ensures that there is an effective tool of combination between the major stakeholders and the company to addressing their needs. Moreover, by accessing the integrated reports, the stakeholders can obtain a holistic picture about the whole financial as well as non-financial performance of the organizations. These benefits of integrated reporting come with some of the major limitations of it. The involvement of large amount of work and higher cost for the companies is considered as major limitations of integrated reporting. At the same time, absence of coordination and inexperienced workforce are major constraints in the effective implementation of integrated reporting. Another limitation of integrated reporting is the absence of conciseness in the reporting proce ss. 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