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Editor's letter: Back in full swing

Nicola Maher

Let me begin, since we are still in January, by wishing all of you a Happy New Year. I hope you are all now thoroughly rested and, like me, settled back into the rhythm of the working year.

It certainly hasn't been hard to hit the ground running - despite the holiday period, the news has been coming in thick and fast. Most strikingly, International Accounting Standards Board (IASB) chairman Hans Hoogervorst had to defend the role of IFRS in the banking crisis, as it received heavy criticism at the UK Parliamentary Commission on Banking Standards' panel session.

Hoogervorst argued it was "a uniformed accounting language" that made it easier to detect "inconsistencies on standards application" - nevertheless, a number of accounting experts called as witnesses in the Commission's investigation thought otherwise (See: Hoogervost counters criticism over IFRS).

In my opinion, while the international accounting standards set by the IASB may not be solely to blame, the fact that banks were reporting using IFRS, coupled with the fact there are variations in IFRS compliance across Europe, should raise enough of a possible link to make bypassing an investigation a mistake.

In hindsight, and at the very least, the IASB should work closer with banks and consider improvements. In the long term, it must push harder for consistent application of IFRS gloablly. In my mind, large inconsistencies in application of the standards mean the loss of the capacity to compare financial reports globally. This is the overarching goal of IFRS in the first place, after all.

This year starts the countdown towards the release of the world's first integrated reporting framework, with the International Integrated Reporting Council (IIRC) due to launch a formal consultation draft of the framework in April followed by the final version 1.0 in December.

While the IIRC is working on the inaugural framework, it's worth looking to South Africa, where companies listed on the Johannesburg Stock Exchange (JSE) have been mandatorily required to produce integrated reports since mid-2010. As a consequence, these companies are perfect case studies for organisations interested in doing the same to examine.

Still, these "guinea pig" companies are still on a steep learning curve when it comes to executing a more integrated management and reporting approach. In this issue, expert South African consultant Reana Rossouw explores some pockets of integrated reporting excellence, and the challenges still faced by South Africa's JSE companies (See: In focus: Integrated reporting in South Africa).

After interviewing Pearl Initiative executive director Imelda Dunlop this month, we learnt there is also a surprising appetite for integrated reporting across companies working in the Gulf Cooperation Council countries - even within those not required to report publically (See: In focus: The Pearl Initiative).

Given this international appetite for integration, I have no doubt that the momentum behind the move towards long-term-focused reporting will only continue to build as the year progresses - to ignore it would be foolish. We live in a time where to encourage greater financial stability, our capital markets, governance and reporting systems all need to evolve together.

Nicola Maher

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