The US Institute of Management Accountant (IMA) has expressed disagreement on certain aspects of the Integrated Reporting (IR) framework launched for consultation by the International Integrated Reporting Council (IIRC) earlier this year.
In its written response to the consultation process, while commending the IIRC for its efforts to transform corporate reporting, the IMA maintained there are "potential fatal flaws" in the consultation draft.
According to the IMA, the framework lacks a cost-benefit analysis of IR and also fails to better explain the "compelling market need" for an integrated report from investors and stakeholders.
The US management accounting body pointed out that the framework does not consider existing legal disclosure requirements and other specific conditions that would exist in various jurisdictions.
The IMA questioned whether investors would like to see companies’ management teams disclosing "competitively sensitive information about how they achieved profitable growth in a differentiated manner".
In addition, the IMA stated that in these early stages of IR it would be more in favour of developing the necessary learning process of IR rather than creating mandatory reporting standards.
The deadline to comment on IIRC’s framework consultation is 15 July.