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December 14, 2011

Gathering data an obstacle to integrated reporting: CIMA

A new approach to corporate reporting is required in a changing global landscape, according to the discussion paper Towards Integrated Reporting: Communicating Value in the 21st Century, released by the International Integrated Reporting Committee (IIRC). 

The paper presents proposals for the development of an International Integrated Reporting Framework, a globally accepted integrated reporting framework bringing together financial, environmental, social and governance information.

The Chartered Institute of Management Accountants (CIMA) head of corporate reporting Nick Topazio told The Accountant it is increasingly clear how the separation of financial and non-financial reporting is an issue that needs to be addressed as “the reports we have today are just becoming far too complex and clattered with all sorts of information and data”.

CIMA head of corporate reporting admitted that adding more information could “potentially worsen things”.

“A good integrated report will cut through all of the immaterial items and focus in a concise way on the more important and salient ones,” Topazio said.

Topazio stressed a major problem in achieving a good integrated report is getting hold of the right data. He said there is a lot of other information which needs to be gathered and when you’ve got multinationals and companies with many different divisions, the process can become complicated.

“Getting the systems right is something that needs to be thought through,” he added.

Topazio said integrated reporting should “not add a lot of costs to well-run businesses” though the issue of costs “is certainly a question mark”.

CIMA and 50 other organisations around the world have signed up to a two-year pilot programme that will explore the principles and practicalities of integrated reporting and features blue chip companies such as Microsoft, HSBC and Coca-Cola.

Topazio estimates it will take another three to four years before sustainability becomes standard practice.

 

 

 

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