The potential effects of the International Integrated Reporting Council's initiative on the adoption of Integrated Reporting in the UK

Posted: October 10, 2016

The potential effects of the International Integrated Reporting Council's initiative on the adoption of Integrated Reporting in the UK

The International Integrated Reporting Council has merged the global leaders form the corporate, securities, civil society, accounting, academic, investment, and all sectors that set standards to initiate new approaches in reporting (Abela 2015, p.14). The International Integrated Reporting Council is a body which has been formed to enhance and engage the consolidation of prevailing reporting practices in a move to create reporting standards required for the assessment of organizational value. Recently the council adopted the international reporting standards. These have elicited some effects.

Firstly, the International Integrated Reporting Council will shift from its traditional isolated reporting system to one that is more cohesive (Eccles and Krzus 2014, p.21). This will enhance its value creation process and enhance its success in the end.

Secondly, integrated reporting will result in a comprehensive reaction strategy for addressing the dynamic and unstable trend in the political, social and commercial areas.

Thirdly, as integrated reports become longer and excessively detailed, they obscure critical information and understanding (Eccles and Krzus 2014, p.22). Adoption of the new strategy will reduce the complexity of its information. It will help to avoid the obscuring of vital information to the level that extraction of important information becomes hard and technical.

Fourthly, the adoption will serve to eliminate complex and overlapping sets of disconnected disclosures that have resulted to critical interdependence whose existence may not be clear (Abela 2015). Some of these gaps are existent between financial and non-financial performance, governance and performance, strategy and risk and organizations own performance in comparison to that of others value chain. These will be made non-existent.

Moreover, integrated reporting will provide a scope to step back and rethink information requirement for the provision of clear, concise performance pictures, impacts, and interdependences (Eccles and Krzus 2014). These will consequently drive innovation, support resource allocation decisions, as well as focus on communication and not just compliance.

What is more, following separate and different evolutions in various jurisdictions of reporting requirements has since time immemorial increased the administrative burden. The adoption of integrated reporting will mitigate earlier, while hindering any activities that may result to divergent disclosure practices which potentially inhibit investors and other bodies from understanding and comparing information requirements for decision-making.

Finally, integrated reporting will create a more in-depth description of material issues (Abela 2015, p.27). This will aid in the detection of the issues at early stage and facilitate the incorporation of corrective mechanisms. Integrated Reporting will also affect how organization risks and opportunities are handled. This will relate the relationship and the impacts to progressed accessibility, standard affordability of relevant resources.

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