FORMATION OF INTEGRATED REPORTING IN THE CONTEXT OF SUSTAINABLE DEVELOPMENT

##plugins.themes.bootstrap3.article.main##

##plugins.themes.bootstrap3.article.sidebar##

Published: Mar 26, 2021

  Olha Luhova

  Tetiana Pisochenko

Abstract

The purpose of the paper is to theoretically justify the preparation of integrated reporting, the influence of sustainable development ideas on the formation of the concept of integrated reporting, the problems of its creation and implementation in the practice of organizations. Methodology. The methodological and theoretical basis of the study was made up of the works of scientists and specialists in corporate reporting and sustainable development; frameworks, instructive and methodological materials for the formation of integrated reporting. We used general scientific methods of cognition such as comparison, analysis and synthesis, generalization, systematization, historical and logical methods. Results. Information deficiency arising from the formation of exclusively financial statements stimulates the emergence of integrated reporting. Non-financial reporting (social, environmental, etc.) provides useful information but does not reflect the relationship between different aspects of the company’s activities and its results, which does not contribute to understanding its ability to create value over time. The constant trend of companies to sustainable development involves the study of issues of formation of integrated reporting as a tool for building a sustainable business. The integrated report aims to provide an insight into the company’s resources and relationships that are known as the capitals and how the company interacts with the external environment and the capitals to create value. Key indicators of sustainability reporting, which should be reflected in integrated reporting, are grouped into three components: economic, environmental, and social. They are based on an assessment of the value of business and the value of capitals. Companies interested in implementing integrated reporting face a number of challenges, beginning with the fact that no globally accepted framework specifying what goes into an integrated report exists. But there are a growing number of examples of integrated reports from which companies can learn. Practical implications. This is an explanatory research to come with conceptual paper cited with recent literature for understanding the impact of sustainable development ideas on the emergence of integrated reporting. Despite the long list of internal and external challenges, the list of drivers contains a wide range of business advantages. Value / originality. Integrated reporting is a powerful tool for transparency and information openness of the company, which contributes to the sustainability of the business. Integrated reporting can become a tool for building a sustainable business for a company. In the process of its implementation and formation, the issues of the need to transform the company’s management system, strengthen control over the solution of environmental and social problems, study and improve the company’s business strategy should be resolved.

How to Cite

Luhova, O., & Pisochenko, T. (2021). FORMATION OF INTEGRATED REPORTING IN THE CONTEXT OF SUSTAINABLE DEVELOPMENT. Baltic Journal of Economic Studies, 7(2), 129-138. https://doi.org/10.30525/2256-0742/2021-7-2-129-138
Article views: 1630 | PDF Downloads: 411

##plugins.themes.bootstrap3.article.details##

Keywords

Integrated reporting, sustainable development, International Integrated Reporting Council, stakeholders, value creation, financial statements

References

Brown, J., Dillard, J. (2014) “Integrated reporting: on the need for broadening out and opening up”, Accounting, Auditing & Accountability Journal, vol. 27, no. 7, pp. 1120–1156. doi: https://doi.org/10.1108/AAAJ-04-2013-1313

Chartered Accountants Australia and New Zealand. (2019). How integrated reporting tells the value story. Retrieved March 19, 2021, from https://www.acuitymag.com/finance/how-integrated-reporting-tells-the-value-story

Deloitte. (2011). Integrated reporting: A better view? Retrieved March 19, 2021, from https://www.iasplus.com/en/binary/sustain/1109integratedreportingview.pdf

Deloitte. (2015). Integrated Reporting as a driver for Integrated Thinking? Retrieved March 22, 2021, from https://www2.deloitte.com/content/dam/Deloitte/nl/Documents/risk/deloitte-nl-risk-integrated-reporting-a-driver-for-integrated-thinking.pdf

Dragu Ioana, Tiron-Tudor Adriana. (2014). Research Agenda on Integrated Reporting: New Emergent Theory and Practice. Procedia Economics and Finance, vol. 15, pp. 221–227. doi: https://doi.org/10.1016/S2212-5671(14)00488-2.

Eccles, Robert G., and Michael Krzus. (2010). One Report: Integrated Reporting for a Sustainable Strategy. New York: John Wiley & Sons.

Flower, J. (2015) “The international integrated reporting council: A story of failure”. Critical Perspectives on Accounting, vol. 27, pp. 1–17, doi: https://doi.org/10.1016/j.cpa.2014.07.002

GRI. (2017). Forging a path to integrated reporting. Insights from the GRI corporate leadership group on integrated reporting. Retrieved March 19, 2021, from http://integratedreportingsa.org/ircsa/wp-content/uploads/2017/05/GRI-CLG_IntegratedReporting.pdf

IAS Plus. Sustainability reporting and integrated reporting. Retrieved March 23, 2021, from https://www.iasplus.com/en/resources/sustainability/sustainability

Institute of Management Accountants. (2016). From Share Value to Shared Value: Exploring the Role of Accountants in Developing Integrated Reporting in Practice. Retrieved March 19, 2021, from https://www.imanet.org/insights-and-trends/external-reporting-and-disclosure-management/share-value-to-shared-value?ssopc=1

Integrated reporting and change? : The impacts after a decade of integrated reporting. Journal of Accounting & Organizational Change, 2021. Retrieved March 19, 2021, from https://www.emeraldgrouppublishing.com/journal/jaoc/integrated-reporting-and-change-impacts-after-a-decade-integrated-reporting

International Federation of Accountants (2014). Opening Remarks to World Congress of Accountants 2014. Retrieved March 19, 2021, from https://www.ifac.org/news-events/2014-11/opening-remarks-world-congress-accountants-2014

International Federation of Accountants (2017) Enhancing Organizational Reporting: Integrated Reporting Key. Retrieved March 19, 2021, from https://www.ifac.org/knowledge-gateway/contributing-global-economy/publications/enhancing-organizational-reporting-integrated-reporting-key

International Integrated Reporting Council (IIRC) (2018). Building Momentum: IIRC Integrated Report 2018. Retrieved March 19, 2021, from https://integratedreporting.org/integratedreport2018/download/pdf/IIRC_INTEGRATED_REPORT_2018.pdf

Milne, M.J., Gray, R. (2013) “W(h)ither ecology? The triple bottom line, the global reporting initiative, and corporate sustainability reporting”, Journal of Business Ethics, Vol. 118, no. 1, pp. 13–29. doi: https://doi.org/10.1007/s10551-012-1543-8

Solomon, J., Maroun, W. (2012) “Integrated Reporting: The Influence of King III on Social, Ethical and Environmental Reporting”, The Association of Chartered Certified Accountants, London.

Tweedie D., Martinov-Bennie N. (2015). “Entitlements and Time: Integrated Reportingʼs Double-edged Agenda”. Social and Environmental Accountability Journal, Vol. 35, Iss. 1, pp. 49–61. doi: https://doi.org/10.1080/0969160X.2015.1007466