• Register
Return to: Home > News > Comment: Integrating assurance is about both ‘who’ and ‘how’

Comment: Integrating assurance is about both ‘who’ and ‘how’

Malley: The IIRC has asserted it “does not aspire to become a standard setter in assurance”. The question of who would or should is less straight forward than it may seem.

In October, I wrote an opinion piece for a leading US blog which highlighted the crisis of relevance auditors are facing in 21st century capital markets and the need for auditing to embrace a compelling vision. The column focused on demand for a global shift in auditors' communications toward more incisive, expansive reports, and the International Auditing and Assurance Standards Board's (IAASB) efforts to achieve this.

A global consultation on integrated reporting <IR> assurance has ensued in the past few months and a set of aspirations arising from the same imperative - better, more understandable and meaningful communication for investors - has come into focus for the auditing profession.

Simplicity in assurance from the user perspective, recognising the <IR> ambition of "better reporting, not more reporting" is critical to driving uptake and establishing <IR> as "investment grade" information. Getting to the simplicity at the other side of a complex web of issues and actors in both financial and non-financial assurance could be as much about the 'who' as it is about the 'how' of <IR> assurance.

The International Integrated Reporting Council (IIRC), of which I am a member, has fostered debate on assurance spanning the globe, with roundtables held in almost every major capital market area, including a CPA Australia hosted event in Melbourne, Australia. The roundtables have spurred an enlivened, even passionate discourse about <IR> itself, the challenges and the assurance issue. The discussion has attracted key players from the auditing profession, company directors, CFOs and many from an emerging professional field stretched across sustainability reporting and corporate social responsibility, drawn mainly from the engineering and accounting fraternities.

Understandably, the IIRC has asserted it "does not aspire to become a standard setter in assurance". The question of who would or should is less straight forward than it may seem.

CPA Australia advocated strongly, early on in the IAASB's project toward enhanced auditor reporting, that "working closely with the architects behind <IR> in achieving a comprehensive solution" for <IR> assurance is a primary means of addressing the investor "information gap" raised in the IAASB's 2011 discussion paper, Enhancing The Value Of Auditor Reporting: Exploring Options For Change.

The IAASB and national auditing and assurance standard setters have played a critical role in the recent consultations. Key players have been active in raising the assurance profession's engagement in <IR> over the past few years.

However, it is important to recognise the diversity of other professional groups active in <IR> and the assurance debate. Sustainability reporting, including under the Global Reporting Initiative (GRI) guidelines, is a core component interacting with <IR>. As indicated by recent CPA Australia research, sustainability reporting assurance practices have diverged into a myriad of different standards and approaches - applied by different professions. While in many instances this may come as a positive, arising from custom fitting assurance practices and reporting to individual industries or even companies, it does also seriously impact on comparability from a user's perspective.

With a diversity of voices comes diversity in approaches being advocated. Proposals for <IR> assurance, or trust and credibility more generally, over the last few months have ranged from those focused on internally derived statements by internal auditors or company directors to new and expanded approaches including pictorial depictions of different levels of component assurance, and a true "integrated assurance" approach.

The open, blue sky thinking and dialogue engaged in this discourse is heartening and absolutely what is required to push reporting and assurance into the 21st century. To this end, CPA Australia initiated a major Australian Research Council linkage project with UNSW Australia and other industry bodies in 2012 to tackle <IR> assurance. Echoing <IR>'s philosophical roots however, there does come a point where these ideas must become integrated into a cohesive solution if the aims of <IR> are to be advanced.

To achieve the "conciseness" in reporting sought by the IIRC, assurance reports need to quickly and simply convey to what extent the user can rely on information in an integrated report - essentially, this means integrated assurance. Getting to this point requires building a bridge from considerable complexity in processes and underlying data to language that is easily understandable and is consistent between reports. Just as important as the subject matter, is that the players involved from the accounting, auditing and other professions come together on a collectively accepted integrated assurance solution.


Alex Malley's previous comment piece
Accounting ethics and professional judgement

Top Content

    Choosing the right location can have cast-iron benefits

    As Game of Thrones, one of the biggest television shows of all time, comes to an end, Joe Pickard looks at how tax incentives offered to television and film production companies help the wider economy.

    read more

    Primary financial statements: a game changer in reporting?

    International Accounting Standards Board chair Hans Hoogervorst delivered a speech at the Seminario International sobre NIIF y NIF, organised by the Consejo Mexicano de Normas de Información Financiera in Mexico. The Accountant presents the highlights.

    read more

    FASB readies standards for the netflix generation

    The US Financial Accounting Standards Board (FASB) has updated its accounting standard for entertainment, with a specific eye on keeping up to date with how episodic content, such as television programmes, is consumed in the modern world. Jonathan Minter reports.

    read more

    Brexit: why it takes two to tango

    Former TA editor Vincent Huck, now editor of Insurance Asset Risk, looks at why Brexit might unleash geopolitical intrigue in Europe’s accounting standard-setting scene – and why IFRS 17 will be an incredible source of opportunity for firms in the coming years.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.