Integrated Reporting: Addressing the reporting gap

Matt Chapman, Chartered Accountants Ireland, October 31st 2012

There is a gap between current corporate reporting and investor needs.  Some companies are taking the initiative to fill this gap through their narrative reporting.  Integrated Reporting is one solution that could help you communicate your business story more effectively.

Investors and company boards have struggled for years to get a true picture of business value and how management is driving the business forward.  The trend towards Integrated Reporting (IR) is being hailed as one way to close the gap between current reporting and investor needs.

Historical financial information plays an essential role in corporate reporting, but on its own fails to provide a complete picture of business value.  More is needed to help readers understand how management is driving the business forward and how changes in the business environment might present new opportunities and challenges.  Readers need a more forward looking focus to help them form their own views on how such issues may affect the business in the future – without necessarily requiring companies to provide forecasts or projections themselves .

Businesses themselves have recognised the benefits of presenting a more complete picture of company value.  We have seen this with the growth of less formal reporting channels such as Investor and Strategy Presentations.  But this is not a complete solution in itself.  The relevance of these free-form presentations varies, and there are corporate governance questions over the desirability of releasing price sensitive information through less formal channels, particularly without the back stop of the Annual Report… Continue reading

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