Implications of Integrated Reporting †Free Samples to Students

Question: Discuss about the Implications of Integrated Reporting. Answer: Introduction The integrated report of National Australia Bank for the year 2014 states the way in which NAB is working to generate value for their stakeholders through the business strategies, governance, operating environment, non-financial and financial activities. They continue to challenge themselves to look at the performance of the business as a whole through the framework as set by the International Integrated Reporting Council (IIRC) (Annual review 2014, 2017). NAB contributes to the economy through paying dividends to their shareholders, purchasing services and products, payment towards taxes and salaries and investment in the direct community. Their main objective is to improve the performance towards risk management with regard to protect the experience of the customers and assist in satisfactory, sustainable returns for the stakeholders (Adams et al., 2016). At NAB, their approach is to create social and shareholders value. They are aiming to generate more opportunities to create more successful communities, assist the people to experience a healthy relationship in terms of monetary factors and donate towards a future prospective society. In the last 5 years they made their target investment into the reputation, culture and people. Further, their objective is to provide value to the community, customers, people and shareholders of NAB. The governance framework of NAB strengthens the accountability and efficient decision making approach of the organization. It is the base for directing the operations, culture and business practices. It is essential to how they provide value to their business, customers and shareholders. The board of NAB is responsible for NAB groups governance as they represent the shareholders. The board also helps in performing the responsibilities that includes remuneration, nomination, and assessment of risk, information technology and audit. The remuneration policy of NAB is constructed to connect the rewards with the shareholders value, retain and attract the employees with high-performance and promotion of long-term growth. They offer suitable incentives through various elements of remuneration on the basis of organizational and individual performance (Healey, 2013). They are committed to uphold a disclosure level to provide all the shareholders with equal and timely access to the information. Further, the information is delivered regularly through various communication methods that include written communication and publication of all the relevant reports. NAB offers their shareholders with various options of dividends. Many shareholders are there who have selected to receive the electronic communication instead of the paper communication. Moreover, the shareholders are entitled to the financial report of 2014, annual review of 2014 and summary review of 2014, upon request (Potter, Singh York, 2013). However, NAB has failed to communicate the following important matters in their integrated report: Growth prospect in their integrated report the financial position of the company is mentioned for only two years. However, to assess the growth prospect of any company at least last five years financial information is required Dividend payment in their integrated report they only mentioned the date for interim and final dividend, however, they failed to mention the amount of dividend paid to the shareholders. Culture in the IR of 2014, they failed to outline the culture and value as the important part of implementing the strategies and developing the strong conduct of ethical issues. Disclosures and transparency they failed to mention the transparency level regarding the crucial decisions and th matters that have great impact on the shareholders, profitability and the sustainability (Feng, 2014). Arguments for integrated reporting against corporate social reporting The major arguments that the integrated report (IR) reveals the complete perspective from the materiality aspects is that it presents the spirit of integrating the financial information with non-financial information through the connectivity of the issues related to the material facts of the company. On the contrary, the corporate social responsibility (CSR) report accounts that the company is responsible for their activities. The transparency from the governance prospect and composition is crucial to assure the responsibility of the specific body. The IR increases the accountability and transparency of the reports. Accountability is associated with the stewardship concept and the duties of the organization (Watson, 2015). Moreover, the CSR approach discloses the ethical behaviour that refers to the integrity and ethics principles of the organization. On the contrary, the IR framework states the governance and materiality aspects of the report. The IR framework states the term of common behaviours and values and the shared norms as part of the relationship and social capital. Although, it is not defined clearly by any of the principles of CSR, it requires that the issued report shall disclose the overall picture of responsibility and performance of the organization. While, the IR framework concentrate on two approaches with regard to create new significance on their principle of completeness and relevance. Further, an integrated report must include all the matters related to material facts, both in a negative as well as positive, in a balanced manner and without any material error (Martnez del Bosque, 2013). CSR argues for the balanced, comparable, accessible, and understandable, timely, balanced and accurate information and the characteristics that are materialized for the principles of comparability, timeless, balance, accuracy and clarity. However, the IR has considered these facts and made the necessary improvements through expressing the requirement for concise and clear annual reports (Prez del Bosque, 2014). Conclusion From the above discussion, it is concluded that most of the definitions, terms, principles and elements from the CSR are found within the IR framework, moreover, it provide in much wider sense and deliver deeper understanding with regard to the way in which the organizations shall report and disclose the information in the financial report. The primary driver the trend of IR is to increase the awareness in the environment of business on the accountability aspects towards the profit, people and shareholders. This will lead to greater focus on the requirements and expectations of the users and shareholders for the reports as are issued by the organizations. Therefore, it is found that the IR that is emerging from the CSR and the sustainability report provides the guarantee that the preparer of the annual reports of the organization is aware about the requirements of the information, concerns of the shareholders and are fully aware about the information included in the annual reports an d are thereby can be widely accepted as the alternative for the corporate social reporting. Reference Adams, C. A., Potter, B., Singh, P. J., York, J. (2016). Exploring the implications of integrated reporting for social investment (disclosures).The British Accounting Review,48(3), 283-296. Annual review 2014. (2017). www.nab.com.au/. Retrieved 30 April 2017, from https://www.nab.com.au/content/dam/nabrwd/About-Us/2014-annual-review-2.pdf Feng, T. (2014).Revealing integrated thinking through Integrated Reporting-An exploratory study within an Australian context(Doctoral dissertation, Macquarie University). Healey, M. (2013). Integrated reporting-one company's experience.Keeping good companies,65(5), 262. Martnez, P., del Bosque, I. R. (2013). CSR and customer loyalty: The roles of trust, customer identification with the company and satisfaction.International Journal of Hospitality Management,35, 89-99. Potter, B., Singh, P. J., York, J. (2013, July). Corporate social investment through integrated reporting: Critical issues. InSeventh Asia Pacific Interdisciplinary Research in Accounting ConferenceAsia Pacific Interdisciplinary Research in Accounting Conference. Prez, A., del Bosque, I. R. (2014). An integrative framework to understand how csr affects customer loyalty through identification, emotions and satisfaction.Journal of Business Ethics, 1-14. Watson, L. (2015). Corporate social responsibility research in accounting.Journal of Accounting Literature,34, 1-16.