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Businesses reap benefit from new integrated reporting

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26th Sep 2014
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A new type of integrated financial reporting benefits business and shareholders, according to research.

Backers of integrated financial reporting, which takes a broader view of company performance based on “profit, people and the planet”, said two studies have shown strong evidence of its benefits to business, shareholders and investors.

More than 80 global companies including Unilever, Coca Cola, Tata and HSBC, are testing a version of integrated reporting. The aim is to give investors and shareholders a broader picture of how companies make their money and their prospects in the short, medium and long term.

Supporters of the new approach argue that the way businesses present information in their reports has not kept pace with changes in business, politics and society.

Research by the International Integrated Reporting Council (IIRC) found that 91% of all respondents have seen a positive impact on external engagement with stakeholders, including investors.

Of those that have published at least one integrated report, 87% of businesses believe investors better understand their strategy, the research also found.

The IIRC said integrated reporting is now in the corporate “mainstream”

Separate research by accountant PwC, found that nearly two thirds of investment professionals who responded believe that the quality of a company’s reporting – including information about strategy, risks and other drivers of value – could have a direct impact on its cost of capital.

Replies (3)

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By jefflcbba
29th Sep 2014 09:40

About time!!!!!!!!!!!

The aim is to give investors and shareholders a broader picture of how companies make their money and their prospects in the short, medium and long term.

 

At last: this is precisely what Mad Lemming has been advocating: using all the information that is available about a company, when reporting about that company, rather than just debits and credits, which are so open to abuse, and therefore are abused.

This approach needs to also apply to the Insolvency section, as those accounts are particuarly abused: look at the House of Commons debate on 7th May 1999, Heritage plc or what Vincent Tchenguiz appears to be uncovering in relation to Grant Thornton and CBG!

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Teignmouth
By Paul Scholes
29th Sep 2014 11:16

About time & time & time....

80 companies globally trying the latest in a 25+ year history of discussions and standards upon standards, eg here.

Don't hold your breath jeff.

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By Moonbeam
29th Sep 2014 13:22

So will that change....

falsification of revenues/expenses, dodgy directors' valuations, hidden frauds by staff and directors, reclassification of directors' perks as kosher expenses? If not, what's the point of any of this reporting stuff?

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