ACCA responds to IIRC discussion paper
The global body for professional accountants, ACCA (the Association of Chartered Certified Accountants) is supporting the project to develop a framework for Integrated Reporting (IR). ACCA’s position is explained in its official response to a discussion paper issued by the International Integrated Reporting Committee (IIRC).
The discussion paper presents a model for the future structure of IR and invites comment on a range of key issues including the core principles which should influence reporting practice and the scope of IR – whether IR should be developed as a reporting medium for publicly traded companies only or for a wider range of entities.
While ACCA welcomes the move to develop the concept of IR, its feedback to the IIRC calls for the project to engage more closely with the investor community, so that any future standards properly reflect the information needs of that group. It also calls for more clarity as to the intended status of IR and its relationship with the primary reporting statements, and more emphasis on the need for reporting entities to incorporate sustainability concerns into their planning and reporting models.
Richard Martin, head of financial reporting at ACCA says: “While we are calling for a greater focus on sustainability issues in the work on developing the IR framework, we recognise that improvements in reporting practice can only achieve so much in encouraging more responsible corporate behaviour. Action is needed on all levels, from carbon pricing to the internalisation of environmental costs, and the accountancy profession can make a significant contribution in all these respects. ACCA would also be keen to see the results of the IIRC’s pilot study before any further developments are pushed along – this is a key piece of work that needs to be considered.”
ACCA’s own research has shown that senior executives are generally positive about the development of IR. Earlier this year, 163 senior executives in the US, Europe, the Middle East and Asia were surveyed by ACCA about the issue of global standards, asking them if IR would benefit both investors and companies themselves. 45 per cent of the respondent investors thought IR would encourage better decision-making by companies and 37 per cent of CFOs thought IR would allow users to communicate a truer and clearer picture of the company’s overall performance and prospects. These findings prove that although there is a significant level of support for the concept of IR, much remains to be done.
Richard Martin concludes: “Many critics of the current reporting framework have called for change which encourages companies to give readers of their accounts ‘the bigger picture’ of how they are doing and better quality information about how they are achieving value and managing the challenges they face over the long term as well as the short term. We and many others in the profession and business community believe that the IR project can make a material contribution to the shaping of this wider conception of reporting. If it is to fulfil its potential, though, IIRC needs to undertake an active engagement with the investor community to ensure that integrated reports disclose the range and depth of information that will materially improve investors’ ability to make their decisions about individual companies.”
For further information, please contact:
Helen Thompson, ACCA Newsroom
+44 (0)20 7059 5759
+44 (0)7725 498654
Notes to Editors
1. ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
2. We support our 147,000 members and 424,000 students in 170 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of over 80 offices and centres and more than 8,500 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence.
3. Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. We believe that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. Our values are aligned to the needs of employers in all sectors and we ensure that through our qualifications, we prepare accountants for business. We seek to open up the profession to people of all backgrounds and remove artificial barriers, innovating our qualifications and delivery to meet the diverse needs of trainee professionals and their employers.