Integrated Reporting And Its Impact On International Recognition

Globalization has been changing the world. It has interconnected people, nations, and even businesses. Today´s business can share information to investors around the world thanks to the intelligent software of the actual society. Being more specific, the way in which investors and users evaluate businesses performance is through the information contemplated in their financial statements. These financial statements illustrate the current assets, liabilities, and stockholder equity a company has in order to help users take economic decisions. However, not all the companies are regulated to provide the same structuralized information around the world. Each country possesses its own accounting standard that regulates the preparation of financial statements of a company. In that way, companies’ information might differ between countries making the comparability between financial statements difficult to be implemented by users in order to assess the performance of foreign businesses. In view of the need of a globally accepted accounting standard that promotes uniform standards for worldwide financial reporting, the International Accounting Standards Committee (IASC), which then becomes replaced by the International Accounting Standard Board in 2001, was created (Cathey and Schroeder 130). The IASB issues International Financial Reporting Standards (IFRS) that stands as the set of accounting standards that prepare and present the financial

Despite those enormous advantages, it has been argued that IFRSS adoption lead to significant costs. The main argument is that IFRSs do not consider local needs and priorities as every country has their own ‘business environment, legal systems, cultures, language and political environment’ (Henderson and Peirson, 2000 cited from Malthus, S., 2004). However, to overcome this problem, IASB can accommodate flexible reporting standards that enable companies to choose alternatives that are more suitable for their external condition. It is opinion of some opponents of IFRS adoption that IAS is ‘insufficiently detailed’ (Uddin,M.S., 2005, p.4) that require accountants’ and auditor’ professional judgment. However, overly detail might be contra productive and not flexible in anticipating every changes and differences.

We now want to look into the International Accounting Standards Board and framework for the preparation and presentation of financial statements. The conceptual frameworks are split into five categories and are in the following order: the objective of financial statements; underlying assumptions; the qualitative characteristics that determine the usefulness of information in financial statements; the definition, recognition, and measurement of the elements from which financial statements are constructed; and the concepts of capital and capital maintenance (Ankarath 11). The standards under IFRS are beginning to become much more popular across the world for several different reasons. The International Financial Reporting Standards are currently being used by at the very least 100 countries and “[was] expected that by 2011, more than 150 countries [would] have adopted them” (Ankarath 1). We happen to find this important because it seems that a lot of countries are starting to adopt IFRS to report their financial statements. One of the reasons why many countries made the switch over to IFRS is because “the decision of the U.S. SEC to allow foreign private issuers to list their securities on U.S.

As the business environment grows and companies find new ways to expand into their respective - or even new – markets, it is important that reporting standards stay up to date with changes and continue to assist companies in providing their users with useful accounting information. Information is labelled as being useful when it meets the

States. Companies should report income, liability, equity, and assets. Many people (stockholders, investors, etc.) who have a stake in the company want to know this information before providing a service. In this paper, International Financial Reporting Standards (IFRS) and the Generally Accepted Accounting Principles (GAAP) will be compared for

IASB. 2010, "The Conceptual Framework for Financial Reporting" IFRS, pp. A21- A38, viewed 23 April 2014,

Reporting systems for monitoring systems should always have sophisticated information systems that will enable them to work properly. This is not only meant for competitive purposes but for performance evaluation. This means that the top management should be able to receive information that is accurate and on a timely manner for sales, production and the financial results. When it comes to international affiliates there is need for reporting systems with information feedback at various levels for personal, production, financial and marketing variables. The information systems should have an adequate MIS so that there can be the maintenance of an efficient coordination of activities as well s results coordination. The information system chosen should make it possible for the ease of comparing performance data across countries even if the variables make the information appear different (Deresky, 2011).

International Financial Reporting Standards (IFRS), represent the norms that were introduced by IASB. Being an independent organization that was not operational to earn profits, IASB, also known as, International Accounting Standards Board, incepted IFRS to facilitate public companies around the globe. IFRS presented a framework that served as a guide for these corporations directing them on preparation and disclosure of the financial statements. The International Financial Reporting Standards offered general guidance to the seekers concerning the financial statements. The standards never strived to set industry specific reporting principles or regulations.

Ankarath, N., Ghosh, T.P., Alkafaji, Y. A., & Mehta, K. J. (2010). Understanding IFRS Fundamentals: International Financial Reporting Standards.

Political and economic forces shape accounting. The increased worldwide integration of politics and markets raises the necessity for integration of financial reporting standards. The integration is driven by the reductions in the costs of information processing and communication. International Financial Reporting Standards are a common business affair language in the globe for easier comprehension and comparison of company accounts across international boundaries (AICPA). The standards are issued by the International Accounting Standards Board. The IASB is a United Kingdom body that was established in 2001 and is based in London. The historical cost paradigm authorizes the IFRS except IAS 29 and AFRIC 7, which

This report is based on Tweedie and Martinov- Bennie (2015), Integrated Reporting (IR), double-edged from a perspective of critical sustainability, and pointed out three key distinctive goals as well as strategies. The report seeks to have an insight into IR with an application of accounting theory, and discuss the performance of CPA Australia regarding IR. The report will be divided into four parts. Institutional Theory and Stakeholder Theory will be utilized to examine IR practices in the Part I and Part II. By reviewing 2014 IR of CPA Australia, their performance related to the three distinctive goals raised by Tweedie and Martinov-Bennie will be discussed in the Part III and IV.

The journal article named “The effect of IFRS Adoption on the financial reporting of local government entities” By Kamran Ahmed and Manzurul Alam aims at finding the changes of key accounting components surplus, equity and asset while changing accounting policy from Australian Accounting Standards (AAS) to International Financial Reporting System (IFRS).Introduction of International Financial Reporting System (IFRS) is thought to be a paradigm shifting event in financial reporting system. Australia is one of the first countries to adopt IFRS for the local government. It was a great challenge taken by Australia to adopt IFRS before USA and EU. In 2004 Australia adopted IFRS to their accounting policy. Afterwards, through the

The accounting world is shaped by stringent and clear rules, principles, standards and guidelines. These are all meant to define accounting operations and reporting discipline. With the emergence of International Accounting Standards (IAS), which was later replaced by International Financial Reporting Standards (IFRS), the accounting concepts, analysis, disclosures, reporting and presentation became easier and practical. Currently, accountants, managers and related parties find it concrete and consistent in protecting professional boundaries.

Integrated reporting enables organization to use new information to measure performance in all sectors and this enhances understanding on how value is created. Since communicating value creation is one of the key aspects of integrated reporting, organization can now understand how they create or destroy value. According to IIRC (2014), up to 92 per cent of businesses in the pilot project reported better understanding of value creation. Companies that use integrated reported can now understand how non-financial aspects affect financial performance and vice versa.

No doubt financial reporting is central to an organization strategic decision making process; it is practically impossible for organization to survive without reliable and relevant financial information for critical strategic planning and decision. In fact most organization failed because of their failure to be guarded by financial metrics which assist organization monitor and implement specific and measurable financial goals. For instance, Economic Value added analysis helps organization make effective and timely decision on the