Integrative Accounting

The New Zealand Sustainable Future Institute has recently conducted research that indicated that Integrated Reporting (“IR”) is worthy of greater attention (McGuinness, 2011). My view is that IR is the way forward as it provides stakeholders with additional, relevant information required given the changing business environment our clients are faced with. This increased transparency will help build a greater trust between our clients and their stakeholders (KPMG, 2010). In researching IR, I note that transitioning from a traditional reporting model to an IR model is not without its challenges. I will identify pitfalls and challenges our clients may face when moving to an IR model. It is my expectation that this will provide a balanced overview of whether IR is worthy of the acclaim and attention it has recently received and whether this is something our firm might invest valuable resources to better serve our client’s potential needs.

As explained by the International Integrated Reporting Committee (2011) (“IIRC”), IR provides relevant material about the company’s performance, governance, and strategy while reflecting its social and environmental influences in one report. This is thought to provide a holistic view and create value by providing financial and sustainability information in one place, therefore increasing transparency and engagement with stakeholders (Eccles, Cheng, & Saltzman, 2010). We will examine why this is important from a number of perspectives in the body of this memo below

The organizational perspective and the investor perspectives are two of the perspectives I consider relevant when highlighting the challenges and benefits of IR as a way forward. A third perspective, the policy making perspective, is considered by the IIRC but deserves less of a focus in the context of this discussion paper. I will illustrate why IR is the way forward by applying many of the aspects of IR as outlined in the 2010